The Thurston Regional Housing Council (RHC) discussed possible actions to resolve the $1.7 million funding gap needed to complete 2828 Martin Way Phase 2, a project which is set to provide 64 new affordable housing units in Olympia.
During the council’s regular meeting on Mon., Aug. 30, the project developer Low Income Housing Institute (LIHI) shared that the supportive housing project is $1.7 million short to complete its $23 million budget.
In the discussion, LIHI staff Steven Strickland noted that once completed, the project will provide a total of 64 new affordable housing units, with 40 studio units, and 24 one-bedroom units. In addition, the project will also contain several service spaces such as a case management office, a medical office, and a lounge area. For its residents, the project will cater to single adults and couples, with 39 units dedicated to housing homeless individuals.
Martin Way Phase 2 is a part of the county’s larger goal to build 129 units of permanent supportive housing and a 60-bed shelter facility. Currently, the $20 million Martin Way Phase 1, which will provide 65 new housing units, is already under construction and is scheduled to open by winter.
Strickland explained that there have been several factors that have contributed to the gap including changes in the energy code, inflation, and availability of materials as a result of the COVID-19 pandemic. The LIHI staff noted that while the new energy code is expected to provide long-term environmental benefits, these changes also added a $6,000 increase to the total cost per unit.
The lack of supplies also drives up the cost. For example, the steep increase in lumber also added an additional $750,000 to the budget. The council’s chair, Jim Cooper also added that the contractors are asking for higher contingency funds in preparation for the possible changes in the price of the construction materials. Overall, the developers believe that the construction cost for Phase 2 is estimated to be $53 per SF higher than for Phase 1.
As an update, Olympia Home Fund Manager Cary Retlin noted that the council is in the process of submitting a project application for the state housing trust fund dollars and federal tax credits. In addition, Retlin noted that other jurisdictions such as the city of Olympia, Lacey, and Tumwater have pledged to contribute a part of their home fund to close the gap.
County Manager Ramiro Chavez remains confident that the project is close to becoming fully funded. “To me, the gap is the last mile,” he said. Once completed, the LIHI plans to open Phase 2 by December of 2023.
Olympia Assistant City Manager Keith Stahley also agreed, “This project represents the shortest distance between here and being under construction for new supportive housing units in our county.” Stahley shared that a lot of the elements of the project have been put together, “we own the property, we have a developer, they’re prepared to move forward with an application...there’s no other entity in the county that’s prepared to do that.”
Members of the council also expressed their desire to see the project’s completion. Lacey Councilmember Carolyn Cox said, “we have set this goal of standing up a hundred [twenty nine] units of supportive housing. This is the bright star, this is the one thing we can be sure it’s going to happen.”
In the meeting, the RHC voted in favor of a motion to draft a conditional letter addressing the $1.7 million funding gap. Cooper shared that the project is a part of the county’s goal towards resolving the three-year housing crisis, “All of our communities have told us that housing should be our highest priority.”
CORRECTION: 9/1/21 - Corrected title for Cary Retlin.