Title
Approval of a Resolution Authorizing Submission of a 2026 Connecting Housing to Infrastructure Program Grant Application for Harbor Pines Manager, LLC’s Harbor Pines Project
Recommended Action
Committee Recommendation:
Not referred to a committee.
City Manager Recommendation:
Move to approve a Resolution authorizing submission of a 2026 Connecting Housing to Infrastructure Program (CHIP) grant application for Harbor Pines Manager, LLC’s Harbor Pines project.
Report
Issue:
Whether to approve a Resolution authorizing submission of a 2026 Connecting Housing to Infrastructure Program (CHIP) grant application for Harbor Pines Manager, LLC’s Harbor Pines project.
Staff Contact:
Jacinda Steltjes, Housing Manager, Community Development Department, 360.753.8482
Presenter(s):
None - Consent Calendar Item
Background and Analysis:
Connecting Housing to Infrastructure Program (CHIP)
CHIP is a competitive grant funded through Washington State’s 2025-2027 capital budget and managed by the State’s Department of Commerce. A CHIP applicant must be a city, county or public utility district in partnership with an affordable housing developer. An applicant must identify a specific housing project which the funds will benefit. The goal of the program is to help local governments encourage the creation of affordable housing by reducing or covering the cost of water, sewer and stormwater utility improvements and/or waived system development fees charged by the permitting jurisdiction and associated with the applicant project.
Funding Availability
This is the fifth consecutive year CHIP grant funding has been made available. Olympia was successful in attracting CHIP awards in 2022 and 2023. In the 2026 funding cycle, a total of roughly $31 million is available. Of this amount, approximately $25.8 million is available for eligible jurisdictions statewide and $5.2 million is set aside for projects in eligible jurisdictions with a population less than 150,000. Applicants may request up to $2 million per project.
Applicant Project Details
Harbor Pines Manager, LLC has requested city staff submit a 2026 CHIP grant application in the amount of $685,035 for the Harbor Pines project occurring at 4101 9th Ave. SW. The project consists of 272 family-size units ranging from one to five bedrooms for households with annual incomes up to 60% of Area Median Income. The project will offer a variety of on-site amenities such as community space, a kids play area, and a fitness center. The project is partially funded by 4% Low Income Housing Tax Credit program financing and, as such, will remain affordable for a minimum of 30 years. The project broke ground in July 2026 and is anticipated to be complete by November 2028.
Eligible Uses
Funding can be utilized for the following eligible activities specific to the affordable housing project identified in an application:
§ Water and sewer line upsizing to serve increased density;
§ Water and sewer line extensions to serve new infill development;
§ Water, sewer and stormwater connections;
§ Regional stormwater systems or upgrades necessary to support housing development; and
§ System development charges waived for affordable housing.
Eligible Projects
To be eligible for the funding, projects must meet the following criteria:
• Be located in a jurisdiction that imposes an affordable housing sales and use tax under RCW 82.14.530(1)(a)(ii) and (1)(b)(i)(B), RCW 82.14.540, or RCW 84.52.105. This includes all counties and the cities within them except Stevens and Ferry counties;
• Be located in the urban growth area (UGA) boundary;
• Set-aside a minimum of 25% of the units as affordable to low- or moderate-income households (<80% AMI);
• Demonstrate construction on the project will begin within 24 months of the CHIP award;
• Illustrate a strong probability of housing units remaining affordable for at least 25 years;
• Demonstrate that the project will break ground no later than January 2029; and
• Demonstrate a strong likelihood that funds can be spent by June 30, 2027.
Scoring Criteria
Applications are scored based on criteria such as readiness to proceed, access to public transit, need for the type of project in the community, budget, leveraging of private funding, and CHIP cost per unit (CHIP defines this as total funding request/ # of affordable units). Staff feel the project will score well based on the fact that it has broken ground, is within two-tenths of a mile of Intercity Transit routes 45 and 47 serving West Olympia and downtown, leverages private funding, and the CHIP cost per unit is $2,519.
Climate Analysis:
Approval of a resolution authorizing submission of a CHIP application for the Project will have no direct climate impact. However, the project itself will be located within two-tenths of a mile of Intercity Transit routes 45 and 47. The project will also comply with the Evergreen Sustainable Development Standards, which safeguard health and safety, increase durability, promote sustainable living, preserve the environment, and increase energy and water efficiency.
Equity Analysis:
The project will serve marginalized low-income residents whose incomes do not exceed 60% of area median income by household size. According to Olympia 2045: Comprehensive Plan, Olympia and its urban growth area will need nearly 590 units of housing affordable to households with incomes between 50% and 80% of Area Median Income by year 2045 to accommodate the anticipated population growth. Roughly 162 of such units were completed earlier this year when Lansdale Pointe was placed in service.
Neighborhood/Community Interests (if known):
Three consecutive Community Engagement and Public Opinion surveys have identified housing and homeless services as the community’s number one priority. Affordable housing projects and funding to support them are of high interest to the community.
Options:
1. Move to approve a Resolution authorizing submission of a 2026 Connecting Housing to Infrastructure Program (CHIP) grant application for Harbor Pines Manager, LLC’s Harbor Pines project.
2. Move to approve, with amendments, a Resolution authorizing submission of a 2026 Connecting Housing to Infrastructure Program (CHIP) grant application for Harbor Pines Manager, LLC’s Harbor Pines project.
3. Do not approve the resolution
Financial Impact:
The grant does not require a local match and will have no direct financial impact on the City of Olympia.
Attachments:
Resolution
CHIP Scoring Criteria
CHIP Application Questions
Olympia Housing Needs by 2045 Table