On Tuesday, Dec. 10, the Olympia City Council approved an emergency ordinance that aims to reduce barriers and increase the supply of affordable housing in the community.
The city recognized that an insufficient supply of affordable housing and living in an unaffordable unit is associated with mental health challenges, including chronic stress, anxiety and depression.
Jacinda Steltjes, Olympia's Affordable Housing Program Manager, said that the need for affordable housing far outpaces the supply.
The city heard from developers, including Puget Sound Habitat for Humanity and Homes First, that some of Olympia's policies, procedures and municipal codes are acting as barriers to creating new affordable units.
Steltjes added over 7,600 households in the city are considered housing cost-burdened, spending more than 30% of their income on housing.
To address these issues, Steltjes recommended adopting an emergency ordinance that includes strategies to reduce barriers and increase affordable housing supply by:
Steltjes also laid out the proposed strategies to reduce the cost to the developer, help overcome barriers, understand the process and move projects forward:
Prioritize projects in the permitting process. Affordable housing and middle housing projects meeting the eligibility criteria are moved to the front of the permitting queue. This strategy would help move affordable housing projects quicker through the permitting process, which in turn decreases soft costs associated with developing property. It also reduces the amount of time developers have to hold the property before they can start construction and get the housing units occupied. This allows the affordable housing units to come online more quickly.
Dedicate a specialized Community Planning and Development staff person to affordable housing and middle housing projects. This strategy involves dedicating a staff to support developers and help them navigate the permitting processes. The staff would proactively follow up with developers to keep projects on track and work to find solutions to moving stalled projects forward.
Give the city manager or city manager's designee authority to waive, postpone or exempt city processes for affordable housing. This would give the city manager the authority to waive, postpone, or exempt some city policies, procedures, or regulations on a case-by-case basis for affordable housing projects that are stalled or experiencing barriers. This strategy is intended to provide a path forward for these projects and encourage the development of affordable housing on properties that may have been historically too costly or time-consuming to develop.
Establish a grant program to provide financial assistance to housing developers for needed off-site infrastructure improvements. This would provide financial assistance for off-site infrastructure improvements. This strategy is the city's response to developers' feedback about the high costs of extending water and sewer utilities. This grant program would be first-come, first-served, as the city acknowledged that it would not have enough funding to fully support every project's infrastructure needs. The program would be funded by a 1% increase in wastewater utility rates and a 0.5% increase in drinking water rates, which has been previously approved by the council.
Participate in 1033 Tax Exchange transactions with willing property owners. It involves participating in 1033 tax exchange transactions to preserve existing affordable housing that is at risk of becoming market-rate. This would allow the city to intervene when a property owner is looking to sell, in order to maintain the affordability before the property hits the open market. The city would only pursue these transactions with willing property owners, and the process involves the city issuing a threat of eminent domain.
Establish a grant program to provide financial assistance to housing developers for permitting and other fees. This would reduce the soft development costs associated with these fees. However, staff noted that rather than simply waiving all fees, which could have a significant impact on the city's general fund, they are proposing a grant program approach. This would require identifying a funding source, which staff indicated they will return to the council with a recommendation on in the first quarter. The goal of this grant program is to further reduce the financial barriers developers face when building affordable housing units.
Steltjes mentioned that any project that benefits from strategies in the ordinance must serve low-income households at or below 80% area median income, and would require the property to remain affordable for at least 25 years, and it would carry with land, even if the ownership changes.
For the affordable housing emergency ordinance, the initial review was set for June 2026, 18 months after the ordinance's sunset date. This differs from the usual 12-month review period of emergency ordinance for homelessness.
City Attorney Mark Barber explained that the 18-month timeline for the affordable housing ordinance review was chosen to avoid the challenges of conducting the review at the end of the year, and offers additional flexibility for the council and staff.
The plan is for the council to review the ordinance annually after that initial 18-month, check-in date.
"It is wise to bring the ordinance back to council on an annual basis if there needs to be any tweaks made. It establishes that council has had an opportunity to take a look at all the facts and determine whether or not there is still a public health emergency related to affordable housing," Barber said.
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Honestyandrealityguy
Costs are going sky high. Minimum wage is increasing causing restaurants and businesses to close. What is the solution to the problem? Continuing to raise prices only hurts the price of housing. Concentrate on the solution, not the easy thing.
Saturday, December 14, 2024 Report this
ddttwo2
Instead of always trying to build affordable housing, how about looking at manufactured housing as an option through your local retailers to keep business locally... It would cost at least 1/3 less if not more.
Saturday, December 14, 2024 Report this
S2345S23456
Will it really be affordable for those who need it most? Much affordable housing requires applicants to prove their source of income, and make at least 3 times the rent. Many people don't make that much, but really need housing, and can still pay for it. Some people have a hard time showing income due to complicated self employment with multiple gigs and/or paid under the table.
Saturday, December 14, 2024 Report this
DHanig
". . . allow the city to intervene when a property owner is looking to sell, in order to maintain the affordability before the property hits the open market. The city would only pursue these transactions with willing property owners, and the process involves the city issuing a threat of eminent domain." What does this mean? Exercising eminent domain allows the city to condemn properties at will.
Saturday, December 14, 2024 Report this
WA_Mojo
Everything is an emergency for the halfwits on the city council.
Saturday, December 14, 2024 Report this
peterpumpkinhead
The problem may be bigger than any one city can solve. It seems to me that a big causative factor is that real estate is now looked at as an investment tool. House flippers and private equity squeeze every available dollar out of their “investment”, and there is always a buyer who can afford the inflated price, and the average price within a given market rises in a never ending cycle.
Maybe a start would be to get private equity out of the housing market (and other areas of life), and for realtors to tamp down seller’s expectations and their own quest for high commissions while still working to get sellers and buyers a fair deal.
Saturday, December 14, 2024 Report this
Callie
Please, Olympia, use existing laws to remove the signs that offer to buy your house for cash - these are worded sort of folksy "Ted will buy your house, any condition" My teenager was told by police that he can't advertise his band on a telephone pole. He didn't believe it was against the law. We looked up city code together - yup, can't go around posting - so STOP these people who are deep pocket national firms pretending to be "just folks" and scooping up houses, putting pressure on the market.
Sunday, December 15, 2024 Report this
Yeti1981
Unfortunately, this wasn't supposed to have the below 80% AMI qualifier. We need housing at every economic level, and this does nothing to free up the pipeline. It only creates more poverty stricken and exclusionary housing projects. Sticking low income folks all together in one housing project does not help. We did this already down South. We figured out it doesn't work. Now to see this place making the same mistakes is quite frustrating.
Monday, December 16, 2024 Report this
KatiTh
So here are a couple more thoughts:
1. I think there's less of a lack of housing than we think. Wealthy, opportunistic corporations buy up a log of "affordable" housing to flip. I believe a bunch of it goes vacant. I get a call at LEAST once a week (sometimes 2 or 3) asking if I want to sell my property to them. How 'bout we look into making THAT a problem for them so it's less of a profit maker?
2. How about we reduce taxes for folks who agree to keep their housing/units affordable? Lower property taxes and maybe fewer barriers--like the really overblown new city "rental registration" system? That entire thing is a solution looking for a problem. There were already laws/rules in place for folks who let their property fall into ruin.
Monday, December 16, 2024 Report this
HappyOlympian
"crisis" = false flag = govt intervention to benefit select group. Rent everywhere in Puget Sound area very expensive, but as soon as a new apartment building permitted in Thurston it is filled. Let the market decide and quit justifying tax cuts to developers
Monday, December 16, 2024 Report this
Skywarrior-Pilot
@peterpumkinhead (Below) gets very close to the nub of the problem, Main Street, moving to Wall Street!
Private equity has rapidly invaded growing coastal communities, buying up real estate and “investing” in the demand professions; medicine, dentistry, veterinary services, thereby driving up prices.
This is a cancer in our community that began with leveraged buy-outs in the 70's. Investor's produce nothing, but costs and inflationary pressure, and it all occurs in an invisible process. Even the local "Junk Yard's" are corporate droids.
Housing is so messy, it takes a Ph.D. economist to separate out the costs. Know anyone who ever recovered on a Title Insurance claim?
Who do you send your mortgage payment to, and who owns it?
Monday, December 16, 2024 Report this
Yeti1981
The private equity argument isn't really applicable to Thurston. There aren't as many private equity firms buying up housing in Thurston as people are saying. The reason homes are expensive is the artificial limitations on buildable land, government regulatory inefficiencies and redundancy, and an overly hyper focused approach to only one end of the housing pipeline. Department of Commerce provides that housing is needed at equal levels both above and below 80% of Area Median Income. If housing isn't available for those above 80% median income, they will buy up all of the available housing for those below 80% AMI. The pipeline is broken. Many jurisdictions have a punitive attitude when it comes to enforcing rules on development and they lack a culture of how to get to yes. Permit timelines are far too long in many areas. I've seen as high as 17 months. Time is money in the homebuilding industry, and all of the costs that are incurred by builders are passed on to the consumer.
Tuesday, December 17, 2024 Report this
DanielFarber
I appreciate that the council has recognized that the city permitting/approval system can indeed drive up development costs, It is positve that the council is trying to provide a set of incentives for developers to meet the needs of lower income residents. Market forces alone aren't enough to do that. But with those incentives, I hope that the city is assuring that lowered development costs are directly tied into lower rental costs.
We also must recognize that the city can't do this all on its own. State and national policies need to be part of an overall solution to housing affordability. But aggressively trying to provide affordable housing at our city level is our moral responsibility and I'm supportive of the council's effort to meet that obligation.
Tuesday, December 17, 2024 Report this