In 1986 the Office for Long-Range Planning (OLP) was formed, incorporating the predecessor Land Use and Transportation Project (LUTP). This new entity would be part of a general Planning Program within the Executive Department, along with the newly-formed Office of Strategic Human Services Planning (OSHSP), which would be responsible for human services needs assessment and related policy planning. In addition to LUTP's existing functions relating to planning and policy development for land use, transit and transportation, housing, and related economic development, the OLP was tasked with coordinating City policy for physical development and the environment; establishing a centralized planning database, and conducting long-range planning on issues deemed high-priority by the Mayor and the City Council. By 1989, the OLP was also assigned the job of administering effective City participation in regional planning initiatives, on topics like hazardous waste disposal and public transit.

In 1992 the Office of Long-Range Planning and Office of Strategic Human Services Planning were combined to create the new Planning Department, marking the first point since 1969 that planning and policy development for the City fell outside the direct control of the Executive Department. In addition to cultivating policy on land use, transportation, housing, the environment, human services, and urban design, the Planning Department's stated mission included the pursuit of local/regional planning collaboration as well as the evaluation of city policies for compliance with Washington's Growth Management Act and Seattle's Comprehensive Plan Framework Policies. The department was segmented into four divisions: Comprehensive Planning, Urban Research, Strategic and Special Projects, and Administrative. In 1995 the Planning Department and Office of Management and Budget were brought together to create the Office of Management and Planning.