State Legislature passes measure to allow King County to issue up to $45 million in workforce-housing bonds backed by the local hotel tax.
King County will be able to issue bonds for affordable housing near transit stations this fall, six years ahead of schedule, under state legislation passed earlier this week.
Officials say the county can issue up to $45 million in workforce-housing bonds backed by the local hotel tax. That ultimately will lead over the next five years to about 900 new units for households making between $18,000 and $60,000 a year, expanding the county’s affordable housing inventory by 9 percent, advocates said.
The number of units “is still a relatively small number,” said Keri Williams, program director in the Pacific Northwest for Enterprise Community Partners, a national affordable-housing nonprofit. But, “When you’re trying to make a dent in the problem, every bit helps.”
Four years ago, the state allowed King County to use 37.5 percent of the county’s hotel-motel tax for affordable workforce housing and services for homeless youth starting in 2021. The housing must be located within a half-mile of a transit station.
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Affordable-housing advocates have lobbied for years to move up the timetable because skyrocketing land prices, rising construction costs and commercial development around Seattle-area light-rail stations and major bus stations could put buildable sites out of their reach.
The bonding authority could mesh well with a new local revolving loan fund for development near transit stations that’s expected to launch next year.
Affordable-housing developers would be able to borrow money from the fund for up to five years to tie up property in King County while seeking construction financing. The money also could be used to preserve existing affordable housing.
Enterprise Community is raising capital now from foundations and banks, said Devin Culbertson, program director for transit-oriented development at Enterprise.
King County, Seattle and a coalition of Eastside cities have committed a total of $2.5 million to seed the $13 million fund, which is modeled after ones in Denver and San Francisco. The maximum loan would be about $3 million.
Culbertson said the state legislature is also considering a $2.5 million investment in the regional loan fund, which would attract more private capital and boost the fund’s total size to $25 million.
The state’s investment is key to being able to fund larger deals and projects beyond King County, Culbertson said.
Big and small investors poured more money into apartment properties in the Seattle area last year than any other type of commercial real estate. Affordable units in older properties are disappearing as longtime owners sell to investors who plan to tear them down for new construction or simply hike the rents to current market rates.
The average one-bedroom rent in King County is $1,266, up 8 percent over the past 12 months. Rapidly rising rents have priced out a growing number of working-poor households, forcing longer and longer commutes.
Recently, 19,000 people registered for the Seattle Housing Authority’s lottery for 2,500 housing vouchers, which enable low-income people to rent units in privately owned housing in Seattle.
A full-time worker needs to make $21.60 an hour to afford a typical two-bedroom apartment in King County, said Kelly Rider, policy director for the Housing Development Consortium in Seattle. The nonprofit, along with King County and Enterprise, led the push for the legislation.
Last month, Seattle Mayor Ed Murray called for the creation of 20,000 subsidized-housing units over the next decade affordable to those making up to 80 percent of area median income. Around 700 such units are being built annually in Seattle now, too little to meet demand.
This past week’s state legislation, led by Rep. Larry Springer, D-Kirkland, and Sen. Mark Miloscia, R-Federal Way, essentially helps fund housing units to serve people in that income bracket and doubles King County’s level of investment in affordable housing.
The legislation now heads to Gov. Jay Inslee’s desk.
“It’s a huge win for low-income households across the county,” said Rider.
In terms of funding to address the crisis, she said, “this is the biggest thing that we’ve been able to accomplish.”