Standing between two Seattle affordable housing buildings on a gravel lot, Gov. Jay Inslee proposed Wednesday spending $815 million in 2022 to create more permanent and transitional housing throughout the state, offer financial support to keep more people in their homes and expand supportive services for behavioral health needs, in what he called “the biggest and boldest” effort to reduce Washington’s homelessness crisis.

He also promoted a bill to increase housing density in large and small cities across the state.

The new supplemental budget proposal to the Legislature comes after the state passed in April about $2 billion for housing and homelessness programs out of its $59 billion two-year state operating budget.

Out of the $815 million proposal, $320 million would come from the state’s operating budget and $495 million would come from Washington’s capital budget, which would make it the largest capital budget investment from the state for addressing homelessness, according to Jim Baumgart, senior policy adviser to Inslee. 

The Seattle Times’ Project Homeless is funded by BECU, Campion Foundation, the Paul G. Allen Family Foundation, Raikes Foundation, Seattle Foundation and the University of Washington. The Seattle Times maintains editorial control over Project Homeless content.

Inslee’s supplemental budget would spend more than $334 million to acquire existing buildings and property throughout the state that could be turned into permanent housing and homeless shelters. Inslee estimates this could add about 2,460 new housing units and would include permanent supportive housing, shelter and tiny house villages. 

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“We need rapid housing to get people into tiny homes as fast as we can. We need rapid housing to get into converted motels,” Inslee said. But we also need long-term solutions for people.”

Washington has the fifth largest homeless population in the U.S. with more than 22,000 people living outside, in shelters, in vehicles and more, according to January 2020 data from the U.S. Department of Housing and Urban Development.

In addition to creating new housing, Inslee said he wants to keep people in their existing homes. He proposed $100 million to help people cover utility bills they are behind on.

The plan would also invest $60 million in building crisis stabilization facilities, which would offer short-term housing options to provide primarily homeless people who are experiencing a mental health crisis with a safe place to go while they are connected to social services.

The proposal also dedicates more than $51 million to help cities and municipalities develop “alternative response outreach teams” to connect with people living unsheltered and help them into some of the new housing options that would come online under this budget plan.  

More than two-thirds of the budget proposal, over $540 million, would be paid for from federal relief funding Washington received in the American Rescue Plan Act, according to a policy brief on the plan. 

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This large federal investment, according to senior policy adviser John Flanagan, has allowed the state to respond to Washington’s homelessness crisis in new ways.

“Crisis is an opportunity,” he said. “It’s fair to say that we are making some new investments and some different investments and even some different policy changes.” 

In terms of new policy changes, Inslee said he wants the state Legislature to pass a bill allowing structures known as “middle-income housing” or “middle housing” on all residential lots located within a half mile of a major transit stop in cities with populations above 25,000 people. Middle housing includes housing models that help to increase population density such as duplexes, triplexes, stacked flats, town houses and more. 

Currently, cities have the power to regulate this form of middle housing however they choose, creating an uneven approach to how cities regulate and create housing density across Washington, said Flanagan. 

“We’ve seen in the past, some local governments have straight up outlawed what you would call ‘middle housing’ in their downtown corridors,” Flanagan said. “Those are the exact places you want to see greater density.” 

The bill is being sponsored by Rep. Jessica Bateman, D-Olympia, and Sen. Mona Das, D-Kent.

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“I think that, within the Legislature, this is considered bold,” Bateman said of the proposed policy Wednesday. “This is going up against the status quo, which is not working for working families or low-income people or people with disabilities or elderly folks.” 

Focusing on Washington’s overall housing stock, Inslee said, will help the state to better address one of its root causes of homelessness — rising rents with shrinking affordable options for low- to middle-income people.

“We need more housing in the state if we’re going to solve this problem,” Inslee said. “Because if we don’t, people just crowd out people at the bottom and rents go up if we don’t build more middle houses.”  

Washington is at least 225,000 homes behind its population, according to Flanagan, citing a report that looked at housing figures from 2000 to 2015.

Inslee’s budget will be considered during the Legislature’s 2022 session, convening in January.