Puget Sound cities and counties must work together to tackle the region’s lack of affordable housing. One way is to establish a loan program to build new homes for low-income residents.
TOO many people have to move farther from their jobs in Puget Sound’s urban core to find housing they can afford.
A partnership of cities and counties are launching a low-interest loan program, known as the Regional Equitable Development Initiative (REDI) that could help encourage more affordable housing. The program would lend developers money to buy land or existing apartments near transit stops throughout the region. The homes would be reserved and priced for people earning less than 80 percent of the area median income.
The Puget Sound Regional Council kicked off planning for the program a few years ago and modeled it in part on similar programs in Denver and the Bay Area.
Building homes for low-income residents may require developers to line up numerous funding sources: government grants, tax-credit financing, donations and private loans or grants.
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But often the first hurdle is buying land or property in a competitive real-estate market. Private developers typically have more access to financing, allowing them to close deals faster than nonprofit developers can. A low-interest loan from the REDI fund could help address that problem.
The fund will start with $21 million to make loans over a 10-year term. The effort brings together King, Snohomish and Pierce counties, the King County Housing Authority and the cities of Seattle, Bellevue, Issaquah, Kenmore, Kirkland, Mercer Island, Redmond and Woodinville. Also putting money in are Enterprise Community Partners, a nonprofit lender that will administer the loans, and Living Cities, an investor organization.
The Seattle City Council is the first local government to invest city funds, totaling $1 million. The other city and county councils should not delay so that the fund can begin operating in the first half of 2016.
Local officials and developers must now work together to find well-located development sites.
The REDI fund could be an effective tool for this region to build affordable housing and also demonstrates the importance of regional collaboration to tackle widespread challenges.
The region’s lack of affordable housing isn’t confined to any one city — neither should the solutions.