Title
Public Hearing for a Grant Application to the U.S. Department of Housing and Urban Development to Pursue Funding for Affordable Homeownership
Recommended Action
Committee Recommendation:
Not referred to a committee
City Manager Recommendation:
Hold a public hearing for a grant application to the U.S. Department of Housing and Urban Development to pursue funding for affordable homeownership for low-income households.
Report
Issue:
Whether to hold a public hearing for a grant application to the U.S. Department of Housing and Urban Development to pursue funding for affordable homeownership for low-income households.
Staff Contact:
Jacinda Steltjes, Affordable Housing Program Manager, Community Vitality/Housing and Homeless Response, 360.753.8482
Presenter(s):
Jacinda Steltjes, Affordable Housing Program Manager, 360.753.8482
Darian Lightfoot, Director of Housing and Homeless Response, 360.753.8033
Background and Analysis:
Need for Affordable Housing
City of Olympia is a strong believer that housing is a basic human right. Olympians are struggling and now is the time to act. The Housing and Homeless Response team has extensively gathered and analyzed data and engaged our residents to assess the community’s housing needs. A Housing Needs Assessment identified, among other things, the need for more housing production and preservation and a need for a range of housing types to meet current and anticipated demand.
The 2023-2027 Consolidated Plan deepened our knowledge about housing need and instability in Olympia. It provided data on the cost to produce and preserve housing as well as data on housing cost burden. The Assessment of Fair Housing highlighted populations of our community who experience barriers to accessing housing, housing insecurity, housing cost burden and ongoing disparities in homeownership. An Affordable Homeownership Study identified strategies for increasing affordable homeownership for low-income households and recent work to update the Comprehensive Plan has further identified a need to produce a range of housing types to meet projected population growth through 2045.
Efforts to Reduce Barriers to Affordable Housing
Through this work the City has remained resolute in the commitment to reducing barriers to affordable housing. We’ve adopted a Housing Action Plan identifying 71 actions intended to meet the community’s affordable housing needs. Within three years we’ve completed 19 of these actions and we are actively making progress on another 20. We’ve adopted development incentives to encourage production of housing. We’ve established a dedicated funding source to assist in the costs to develop housing. We’ve provided funding to ensure residents’ homes are safe and healthy for them to live in. We’ve launched new programs and expanded existing ones, built relationships with housing developers, and implemented tenant protections. We’ve expanded the number of staff doing housing related work and have made conscious and purposeful efforts to collaborate across City departments with planning, climate, and economic development staff as well as our regional partners to increase and preserve a range of housing so that all Olympians have access to safe, affordable housing. These efforts have largely focused on rental housing and while the City has made significant strides in this sector, there is still much work to be done around homeownership.
PRO Housing Proposal
The City of Olympia and Thurston County have partnered to draft a proposal for PRO Housing grant funding. The proposal is focused on homeownership. Homeownership is the primary means for wealth building in the United States. The average homeowner’s net worth is 40 times that of a typical renter. It’s a way to increase housing security and deter upstream housing instability that can lead to homelessness. Homeownership provides financial stability and a sense of community belonging. Homeownership creates opportunities. It builds intergenerational wealth that can be leveraged to improve health, education, and employment.
To meet the demand for affordable homeownership housing there is a need for increased organizational capacity among housing developers, capital funding to build and preserve new units, more robust sources of funding subsidies, and access to resources necessary to make homeownership a reality for low-income households.
This grant application outlines the partner’s strategy to reduce these barriers. With PRO Housing funds the City and County will undertake the following activities:
1. Provide capacity building support to Thurston Housing Land Trust
2. Provide capital funding to create and preserve affordable homeownership units
3. Provide resources to help low-income households become homeowners
This proposal aligns with all four of the Department of Housing and Urban Development’s (HUD) 2022- 2026 Strategic Plan goals:
• Support Underserved Communities
• Ensure Access to and Increase the Production of Affordable Housing
• Promote Homeownership
• Advance Sustainable Communities
Climate Analysis:
It’s anticipated that all new construction of affordable homeownership units supported by PRO Housing funding will also receive funding from state or federal sources, such as the Housing Trust Fund or Low-Income Housing Tax Credits program. As such, this housing will be subject to both the City’s energy code as well as Washington State’s Evergreen Sustainable Development Standards (ESDS). ESDS contain criteria that safeguard health and safety, increase durability, promote sustainable living, preserve the environment, and increase energy and water efficiency. Existing housing that is purchased and preserved will include efforts to maximize energy efficiency as a way to both decrease impacts to the environment and achieve a higher level of affordability for the homebuyer.
Equity Analysis:
In partnership with Thurston County and the Housing Authority of Thurston County, the City of Olympia completed a countywide Assessment of Fair Housing (AFH) in early 2023. The AFH found that people of color, people with disabilities, people who are transgender, and single mothers are more likely to face housing insecurity through risk of displacement, housing cost burden, and gaps in homeownership. These groups are more likely to experience homelessness, eviction, and are more likely to be renters than homeowners. In fact, these populations are overrepresented in Thurston County’s homeless response system.
In Thurston County, the homeownership rate for white, non-Hispanic households is 69 percent, while the homeownership rate for people of color is 58 percent. The homeownership rate is lowest for Black or African American households (45 percent). Only 38 percent of single female-headed households in Thurston County own their homes. Disability advocates provided feedback that family members who care for a household member with disabilities often are forced to leave the workforce to provide support and are at risk of losing housing. Affordable homeownership helps stabilize households and can prevent upstream homelessness. It builds equity and, in turn, generational wealth that can be leveraged to improve health, education and employment.
Neighborhood/Community Interests (if known):
Affordable housing, particularly homeownership, is a community interest. In a survey of 600-plus community members conducted in association with the Assessment of Fair Housing, increasing access to affordable homeownership was second among the top five strategies that were suggested to increase equity and reduce disparities among protected classes in Thurston County
Financial Impact:
The max grant request for PRO Housing funding is $7 million. The City’s grant proposal requests $5,450,000. The funding will be spent over the period of February 2025 through September 2030 and will be applied as follows:
Capacity Building Support to Thurston Housing Land Trust (THLT)
The City has requested $360,000 for this activity. The funding will be distributed over a three-year time period. It will partially support a full-time Project Manager position with THLT. THLT is providing matching funds.
Capital Funding
The budget associated with this activity is $3,000,000 to be distributed over the period of performance. The City of Olympia and Thurston County intend to use these funds in two ways. The first is to acquire property for the creation or preservation of affordable homeownership units in Olympia and unincorporated Thurston County with a focus on Grand Mound and Rochester. The second is to provide funding to be applied by developers of affordable homeownership housing to infrastructure improvements in Olympia.
Resources to help low-income households become homeowners
The budget associated with this activity is $1,782,000 to be distributed over the period of performance. Funds will be used in two ways. Funds will be made available to low-income homebuyers as homebuyer assistance grants, which will be applied toward the purchase of a home and will reduce the household’s monthly mortgage amount. Funds will also be used to partially support a Homeownership Center operated by South Puget Sound Habitat for Humanity. The Center will offer homebuyer education and counseling courses to prepare low-income households to become homebuyers. Both Washington State Housing Finance Commission and South Puget Sound Habitat for Humanity will provide matching funds.
Administration
The City and Thurston County are requesting 308,000 (just under 6% of the grant request) over a five-year period to administer the activities outlined in this proposal.
Options:
1. Hold a public hearing to review the Grant Application to the Department of Housing and Urban Development to Pursue Funding for Affordable Homeownership as proposed.
2. Hold a public hearing to review the Grant Application to the Department of Housing and Urban Development to Pursue Funding for Affordable Homeownership with amendments.
3. Don’t hold the public hearing.
Attachments:
Grant Application