Title
Approval of an Ordinance Extending a Declaration of Public Health Emergency Related to Insufficient Supply of Affordable Housing
Recommended Action
Committee Recommendation:
Not referred to a committee.
City Manager Recommendation:
Move to approve on first reading, and forward to second reading, an ordinance extending a declaration of public health emergency related to insufficient supply of affordable housing.
Report Issue:
Whether to approve on first reading, and forward to second reading, an ordinance extending a declaration of public health emergency related to insufficient supply of affordable housing.
Staff Contact:
Jacinda Steltjes, Housing Manager, Community Planning & Economic Development, 360.753.8482
Presenter(s):
Jacinda Steltjes, Housing Manager
Background and Analysis:
In December 2024, Olympia City Council adopted ordinance 7414 declaring the insufficient supply of affordable housing a public health emergency. The ordinance includes a sunset date of June 30, 2026. The conditions leading to the ordinance continue today. LUEC considered the extension of the declaration of public health emergency on April 23, 2026, and recommended the declaration be extended for a two-year period with a new sunset date of June 30, 2028.
The ordinance extending the declaration will continue to make available six strategies. All strategies are intended to increase the supply of affordable housing, which is defined as housing which costs a household no more than 30% of its gross annual income, for low-income households, which is defined as households whose annual gross income is at or below 80% of the Area Median Income, in Olympia. The ordinance is fashioned after similar emergency ordinances adopted in locations such as San Diego, California; Los Angeles, California; Portland, Oregon; and the state of Hawaii.
The ordinance extends the following six strategies:
1. Prioritize affordable housing projects in the permit queue;
2. Provide developers of affordable housing projects with access to specialized assistance from planning staff to help projects move swiftly through the permitting process;
3. Authorize the city manager, or designee, to defer or waive city requirements on a case-by-case basis for affordable housing development projects;
4. Operate a grant program to exempt up to 100% of permit fees associated with affordable housing development projects;
5. Operate a grant program to reduce infrastructure costs associated with affordable housing development projects;
6. Participate in 1033 Tax Exchange transactions with willing property owners of affordable housing projects at risk of losing their affordability status.
Developers benefitting from the emergency declaration must offer all units of their project as affordable for a minimum of 25 years. A restrictive covenant which runs with the land guarantees this affordability period.
The ordinance works toward achieving goals outlined in the City’s Housing Action Plan, One Community Plan, Fair Housing Assessment, and Olympia: 2045 Comprehensive Plan. The Comprehensive Plan calls for the city to take actions to facilitate the development of 14,295 new housing units within Olympia and its urban growth area by 2045 to accommodate projected population growth. Of these new units, it’s anticipated 7,616 will be needed for low-income households. Accomplishments achieved under the emergency declaration can be found in the attached Accomplishments & Next Steps document.
Climate Analysis:
Affordable housing and middle housing create density and better utilize the limited availability of land. Affordable housing projects are often funded by and rely upon state and federal resources. These resources require projects to comply with development standards that safeguard health and safety, increase durability, promote sustainable living, preserve the environment, and increase energy and water efficiency. Additionally, affordable housing projects are commonly located along frequent transportation routes and thereby help to decrease greenhouse gas emissions.
Equity Analysis:
The emergency declaration increases affordable housing supply and therefore most prominently impacts Olympians who are low-income. Low-income households and Black, Indigenous, People of Color (BIPOC) are disproportionately impacted by insufficient supply of affordable housing. Approximately 7,300 Olympia households are currently housing cost burdened- meaning they spend more than 30 percent of their income on housing expenses, according to the 2024 American Community Survey. In general, the lower a household’s annual income, the more likely they are to be housing cost burdened and experience housing instability.
According to a Housing Needs Assessment produced by Thurston Regional Planning Council in 2021, about one in four Thurston County residents is a person of color. Hispanic or Latino, Asian, Black, and multiracial populations are the largest minority populations in Thurston County. According to the Needs Assessment, people of color, due to systemic racism and other discriminatory practices, are less likely to own their own home, have a smaller household income, and are more likely to experience housing instability and homelessness than their white, non-Hispanic counterparts.
Households who experience housing instability have a higher risk of chronic health conditions such as elevated levels of cholesterol, respiratory infections, coronary heart disease, cardiovascular disease, arthritis, stroke, and cancer. Housing instability is frequently associated with mental health challenges, including chronic stress, anxiety, and depression.
Neighborhood/Community Interests (if known):
Affordable housing has consistently ranked as a top priority and concern among Olympia residents in recent years. In May 2023, the City of Olympia conducted a community engagement and public opinion survey. Respondents overwhelmingly (74%) indicated housing and homelessness was a concern. Only 11% of the 531 respondents felt residents could access affordable and stable housing in Olympia. A theme identified in comments concerning the Land Use & Urban Design chapter of the Olympia: 2045 Comprehensive Plan was that community members want housing options for all income levels across the city. They also feel more should be done to help people find housing solutions. A theme in the Public Services chapter comments was that the availability of affordable housing is a primary issue for our community and there should be housing opportunities for everyone across the entire income spectrum.
The Fair Housing Assessment (produced in 2022) evaluates housing discrimination and fair housing planning efforts as well as identifies outstanding fair housing needs in Thurston County. The assessment is used to inform spending of federal funds, create goals and strategies to advance fair housing in Thurston County, and inform program areas and policies that involve housing efforts. More than 600 Thurston County community members who participated in a survey to assess fair housing barriers and priorities ranked access to affordable housing among the highest priority needed to address housing disparities in Thurston County. Respondents also ranked the availability of housing that is safe, accessible, and affordable to households experiencing a disability as severely lacking in Thurston County.
Financial Impact:
Two of the strategies outlined in the ordinance have financial impacts.
Permit fee grant program
In spring 2025, Council approved funding the permit fee grant program with $500,000 in seed money from the Economic Development Fund. The grant program will maintain a minimum balance of $500,000. Each time a city-owned property is sold, up to 10% of the sale proceeds not otherwise identified for city priorities will be directed to this grant program. At no time will funds exceed $750,000.
Eligible applicants to this grant fund benefit from up to 100% exemption of permit fees, though not review fees. The percentage of permit fee exemption is dependent upon the degree of the project’s affordability and whether the project meets Comprehensive Plan goals in addition to providing affordable housing for low-income households. The permit fee grant program exempts the applicant from paying permit fees, which are directed into Fund 006. Fund 006 is heavily relied upon to pay personnel costs associated with several Community Planning & Economic Development staff.
Infrastructure Assistance Grant
The infrastructure assistance grant provides funds to offset the cost of wastewater and drinking water infrastructure. The fund was seeded with a 0.5% increase to drinking water utility and a 1% increase to wastewater utility. This provided roughly $55,000 for drinking water infrastructure and $85,000 for wastewater infrastructure in 2025. Revenue from the drinking water utility are collected in Fund 145 and must be used toward drinking water infrastructure. Revenue from the wastewater utility are collected in Fund 146 and must be applied toward wastewater infrastructure.
Options:
1. Move to approve on first reading, and forward to second reading, an ordinance extending a declaration of public health emergency related to insufficient supply of affordable housing.
2. Do not Move to approve an ordinance extending a declaration of public health emergency related to insufficient supply of affordable housing.
3. Direct staff to take other action
Attachments:
Ordinance
Ordinance #7414
Accomplishments & Next Steps
Presentation