City: Affordable housing challenges are ‘staggering’

Chris Tucker ctucker@ptleader.com
Posted 7/18/17

The challenges of boosting the supply of affordable housing are “staggering,” Port Townsend City Manager David Timmons told City Council members at a July 10 meeting.

Timmons gave an update on …

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City: Affordable housing challenges are ‘staggering’

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The challenges of boosting the supply of affordable housing are “staggering,” Port Townsend City Manager David Timmons told City Council members at a July 10 meeting.

Timmons gave an update on the progress of the housing trust Homeward Bound, which has the task of making housing more accessible to people with lower incomes.

Until recently, Homeward Bound had been inactive, but is now getting back to work. The group currently has a minimal “skeleton” board until a regular board can be elected during an annual meeting.

The board is working in two groups: one focusing on getting an eight-unit Cherry Street project up and running; and the second working on Homeward Bound’s long-term vision.

Timmons said the Cherry Street project – which has involved the purchase and barging of a fourplex from Victoria, British Columbia, to Port Townsend this May for eventual conversion into eight units of affordable housing – is a good demonstration project.

MORE THAN REGULATIONS

“It’s going to make people aware of what it’s going to take to achieve a level of affordability in a particular property. Because it is challenging when you actually see the pro forma on this particular project – what it’s going to take and what it could potentially fund when you apply those affordability criteria.”

Timmons said that he would later show the council a chart illustrating project details, including the land subsidy, utility subsidy and other subsidies, the rents that can be generated, and the debt service.

The council took no action as part of the informational update.

“It’s frightening … it is something where the amount of subsidy that’s going to need to go into these projects to make them affordable is staggering,” Timmons said.

“It explains why you’re not going to see people just suddenly pick up and build affordable housing. It’s going to take more than just lightening [city] regulations or modifying [city code]. It’s going to take more than that; it’s going to take a lot of capital subsidy to do it.”

Timmons said an accountant and a financial planning consultant have been hired for Homeward Bound, but that it is still looking for a project manager. The group is to submit final plans for permit review of the Cherry Street project soon.

“It’s going to be an eye-opener, that’s the best I can say, in terms of the amount of subsidy that will have to be found to make these projects work.”

Timmons said that he learned from a state housing commission that some affordable housing projects needed a 90 percent subsidy.

Timmons said that it would be helpful if affordable housing projects were eligible for Section 8 of the Housing Act of 1937.

“Section 8 basically comes in and pays market rate, but the person holding the voucher pays based on what they can afford. That really helps the project pencil out,” Timmons said.

He noted that other projects would only “pencil out” if they had a sufficient number of units to make use of economies of scale.

One additional stumbling block is that the city zoning for the Cherry Street project allowed eight units per acre, but only a maximum of four per building.

The building has four two-bedroom apartments now, but the plan is to add four studio apartments in an open basement at some point.

Timmons thought that the city might be able to find a workaround for that issue.

EMERGENCY LEVY?

Timmons said the county was moving forward to declare a housing emergency, including possibly putting a measure on the November ballot for a housing levy. Other steps that could bring more affordable housing to the market are code adjustments and departures from standards, but he included a qualifier: “But what we want to do is try to tie those departures [from standards] to a guaranteed affordability outcome, instead of a promise [of affordability.]”

Timmons added that the increased statewide school levy would “run straight head on into the housing levy request.”

That school levy is expected to increase property taxes on a typical Jefferson County home by $252 in 2018.

Any changes to the local school levy that might reduce the tax burden would not take place until 2019, and it is not known what the school districts would do in regard to any future levy requests.

“We won’t know until we see what the school district does whether there will be any economic relief on the tax levy until 2019. It’s going to be a tough sell to try and explain all that out,” Timmons said.

PORT ANGELES HOMES

Timmons said efforts are still underway to try to relocate several Port Angeles homes to Port Townsend. The homes are scheduled to be demolished as part of a new housing project in Port Angeles, but some of them could be moved to Port Townsend.

Timmons said three of the homes have been acquired by private parties for relocation to the Port Townsend area.

The city also has looked into acquiring some of those homes, but because of several hurdles involving the moving of the homes as well as a short deadline for relocating them, Timmons was not sure if the remaining homes could be moved in time.

Council member Michelle Sandoval noted that it is cheaper to move the buildings from Port Angeles to Port Townsend than to build new homes. She said the city should prepare now so that it’s ready to make use of “the next 40 [homes from Port Angeles] that will be available in a year.”

That would give the city time to make all the arrangements, including finding locations for homes.

“Given that we know that there’s going to be more houses available to move, can we work towards that goal so that we can get some of those houses next time around?” Sandoval asked.

“If we start now, perhaps in a year we’ll be ready,” she said.

Timmons agreed.

“Now we know how to do it,” Timmons said.

The problem with this current batch of Port Angeles housing, he said, was that the city only became aware of the Port Angeles opportunity at the “last minute.”

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