Title
Consideration of Request for Temporary Voucher Reserve for 2828 Martin Way
Recommended Action
Deny the request for a Temporary Voucher Reserve. Do not forward to General Government Committee for consideration.
Report
Issue:
Whether to authorize staff to proceed with development of a voucher reserve and draft an award letter for the Low Income Housing Institute's request.
Staff Contact:
Cary Retlin, Home Fund Manager, Community Planning & Development, 360.570.3956.
Presenter(s):
Cary Retlin, City of Olympia
Background and Analysis:
The Low Income Housing Institute (LIHI) has requested that the City of Olympia provide a voucher reserve of $366,792 in the event that 2828 Martin Way is not awarded Project Based Vouchers through the Housing Authority of Thurston County. The Housing Authority will not issue an award of Project Based Vouchers until after LIHI hopes to secure their tax credit investor and begin construction.
On its face, this is a reasonable request because staff and LIHI have high confidence that Project Based Vouchers will be awarded. This proposal would also help LIHI secure tax credit investors. Since it's a reserve commitment when the vouchers are awarded the city would be released of our obligation and the funds could support other affordable or supportive housing efforts.
However, in the very unlikely event that some or all of the vouchers are not awarded, Olympia would be obligated to cover the first year of the project's operating costs. That could over obligate all of Olympia's 1406 funds for that year - and potentially create pressure that the city solely support the operations in future years.
Olympia is very committed to support the 2828 Martin Way project - but if this reserve were needed for more than a year it could over obligate Olympia's 1406 revenue. At your August 2019 you approved a motion to create an operating reserve fund - but requested that staff provide smaller supportive housing operating subsidies to multi...
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