The city council voted this afternoon 7-2 to allow residential buildings up to 85 feet in Interbay, the valley between Queen Anne and Magnolia. Previous regulations allowed only commercial buildings up to 40 feet. In effect, that limited development to big-box, auto-oriented retail. The new rules could allow Interbay to blossom into a small neighborhood.

Even though the area is prime for more residential density—as per the city’s plan for tighter, concentrated development—the decision was controversial. Under the rules approved today, developers must include 17.5 percent of the added floor area, above the previous 40-foot limit, as “workforce housing” (units affordable to people making 80 percent of the county’s median income, or about $1,150 a month for a one-bedroom apartment). Affordable-housing advocates said developers should include over 20 percent, and the leading developer in the neighborhood, the Freehold Group, said that any requirement for affordable housing would render their building plans financially unfeasible. At a hearing last month, developers and activists formed an unlikely alliance to ask the council to delay the entire process.

Undaunted, Council Member Sally Clark, chair of the planning and land use committee, struck a compromise to create the workforce housing requirement above and appease the Freehold Group. With the help of Council Member Richard Conlin, she included a provision that exempts the developer from paying city property taxes for the first 12 years.