This morning, Mayor Durkan held a press conference to announce two measures to help address the ongoing housing crisis in the city.
The first is to move forward on “local option financing” of affordable housing, using the recently-passed state law that allows the city to retain a portion of the state sales tax to be spent on acquiring, rehabilitating, or constructing affordable housing, or the operations and maintenance costs of new affordable or supportive housing. The Mayor’s office expects this will make an additional $50 million available to the city, which it intents to devote in its entirety to permanent supportive housing (PSH) — a critical need in Seattle.
The details are still being worked out as to how much will go toward capital investments in building new PSH units, versus the substantial ongoing operations and maintenance costs for those units. Robin Koskey of the Office of Housing said that the city would look to leverage its bonding capacity immediately, using the sales tax revenues to cover the debt service, so as to get started as soon as possible on building new housing units. The new state law expires in twenty years, which matches well with the typical bond repayment schedule — if the bonds are issued soon. A spokesperson for the Mayor said that the specific details would be included in the Mayor’s proposed 2020 budget, to be unveiled at the end of September.
On a related note, the proposed regional governance structure for the homeless response would retain capital funding and operations and maintenance for PSH units in the city government, but move the services offered (case management, mental health services, etc.) to the new regional organization. While the details of that proposal are still being worked out (and will likely firm up before the Mayor releases her budget proposal), it will likely affect the decision on how much to devote to capital investments, operations and maintenance, and services.
The second measure that the Mayor announced today was a proposed renewal of the Multi-Family Tax Exemption program, which expires at the end of the year. The program gives owners of multi-family housing properties in certain areas of the city an exemption from local property taxes if they meet certain criteria for renting out units at affordable rates.
The Mayor’s proposed renewal will be under the same terms as the existing program, with one exception. The current program bases the “affordable” rental rates on the U.S. Department of Housing and Urban Development’s local determinations of Area Median Income (AMI). But with incomes in King County rising rapidly in recent years, some MFTE properties have seen large increases in the allowable rent. The Mayor’s proposal would add a “rent moderator” to the rent calculation, slowing down increases.
Mark Prentice, spokesperson for the Mayor, said that together the two efforts announced today represent an attempt to broadly address affordable housing needs. While Permanent Supportive Housing is primarily directed toward the chronically homeless and others in the community with physical or health limitations that both severely limit their ability to draw income and require supportive services to be provided, the MFTE program attempts to make housing units available across a wider range of incomes — up to 90% of AMI.