Victoria fourplex PT bound: City Council approves $250,000 loan for affordable housing

Chris Tucker ctucker@ptleader.com
Posted 4/25/17

A four-unit, two-story apartment building in Victoria, British Columbia, is to be shipped in May to a lot owned by the City of Port Townsend for use as affordable housing.

On Monday, the Port …

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Victoria fourplex PT bound: City Council approves $250,000 loan for affordable housing

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A four-unit, two-story apartment building in Victoria, British Columbia, is to be shipped in May to a lot owned by the City of Port Townsend for use as affordable housing.

On Monday, the Port Townsend City Council voted unanimously to loan as much as $250,000 to the Olympic Housing Trust (also known as Homeward Bound) in order to make the project possible. The council had only a small window of time in which to make a decision, as the Victoria lot is being developed and the apartment building would otherwise be demolished this week.

The building is currently located at 1041 Oliphant Ave. in Victoria. It has four two-bedroom, one-bath units, each about 900 square feet in size. The building could arrive in Port Townsend in mid-May.

EXCELLENT SHAPE

City Manager David Timmons said the building has been inspected and is in “excellent shape.”

“It is actually, on the inside, quite nice,” Timmons said, with hardwood floors and hydronic heating.

The units are to be held by the trust in perpetuity as affordable housing.

City officials hope to add four studio apartments in a daylight basement that it plans to build underneath the apartment building, making it an eight-unit apartment building, the maximum allowed by zoning.

The plan is to purchase the building, have Nickel Bros. house-moving company barge it to Decatur Street, then move it up Kearney Street to a wooded lot north of Grace Lutheran Church. The church is located at 1120 Walker St.

The city plans to grade the lot and move the house into position atop cribbing. The city then plans to build a foundation underneath the building.

COST OF PROJECT

Volunteer Mark Blatter said it cost $205,000 to purchase and move the building. He estimated that it would cost an additional $150,000-$175,000 to do excavation work, build a new foundation, rehab the building, hook up utilities, and do landscaping, parking and stormwater work.

Then, in a second phase, another $100,000 or so would be needed to convert the unfinished basement into four studio apartments. The total cost is estimated to be $475,000.

Blatter said that might seem like a lot of money, but added, “The final cost will be under $100,000 per unit … you can’t build new construction of this quality for that.”

Blatter said the two-bedroom units might rent for $900-$1,100 a month as “affordable” units for people making 80 percent of the median income ($36,000-$52,000 per year) or less. Blatter said there were several levels of affordable housing, including “very low income” housing, priced for those making 50 percent of the median income.

COUNCIL REACTION

Council member David Faber said the rents should be even less than the proposed $900-$1,100.

“Most people in the community I know who are facing housing insecurity fall in this – as you call it – ‘very low income’ level. People making $15 an hour working full-time. They’re still making less than $30,000 a year.

“That’s most of the people working service here in town, most of the people I know who are constantly on the verge of being under-housed or homeless. Is there a reason why we aren’t targeting those people with this project?” Faber asked.

“The people I know who need to be targeted are not the target group that is laid out here by the program description,” Faber continued. “Is there a reason why we aren’t trying to target those people making roughly 50 percent of median income?” he asked.

Blatter said his 80 percent figure was in part due to the urgent timing and also to financing requirements.

“I’m challenging myself to develop a financial model that fully supports the acquisition and development costs here, because I don’t have a source of public financing at this time,” Blatter said.

“It is the mission of the housing trust and Homeward Bound [Olympic Housing Trust] to serve as low an income level population as we can. And I think we can look in the future for sources of rental assistance or subsidy to lower the effective rent of these units,” Blatter said.

He said that if the city wanted to grant funds rather than loan them, then it wouldn’t have to have the income to support what is now a mostly debt-financed project proposal.

“There are a lot of things we could do,” Blatter said. “At this point, to demonstrate financial feasibility, we need rents to generate income to borrow what we need to buy … and that’s why the rents are initially proposed at the higher level. It’s higher than we want, too,” Blatter said.

Blatter estimated rent for the four studio units might be in the range of $600 per month.

$1 FOR THE LOT

Timmons said the city was putting its land up for $1. The city may either surplus its lot or arrange a long-term lease with the trust. City attorney Steve Gross said the city-owned land was currently not taxed, so the city wouldn’t lose tax revenue by transferring it to the trust, with which it would continue to be non-taxed land.

“I think it’ll send a signal that we are doing something about [affordable housing] and that we are willing to take the risks that are necessary to make some of these things happen,” Timmons said.

The city also is to work with the church to deal with minor encroachment issues regarding a parking lot and lawn between church-owned and city-owned property.

Timmons said the two parties may make a property exchange to resolve the issue.

SUPPORT FOR PROJECT

The Rev. Coe Hutchison, minister of Grace Lutheran Church, supported the project.

“Like all of you, we are very aware of the needs in the community for affordable housing and certainly support that,” Hutchison said.

“If you’re looking at a public hearing on [May 8], the sooner we can get plans and people to be able to talk to our congregation, that would be great, because it sounds like they’re going to come out of church one morning and there’s going to be a building there,” he said with a laugh.

Council member Michelle Sandoval was enthusiastic about the plan.

“This property and this goal actually has been a long time coming,” Sandoval said. “This came about when we started the affordable housing task force so many years ago.”

“Bully for us that how many years later we’re finally looking at this … it’s a great start. I’m really excited about it,” Sandoval said.

Council member Robert Gray, who is also on the board of the Olympic Community Action Programs (OlyCAP), said he was “very excited about this.”

Mayor Deborah Stinson said the speed of the project was “fast and furious.”

“It feels like after for or five years … all of the sudden the stars have aligned,” Stinson said.

“I appreciate the church, also, being willing to work with us at this point because I know it will be disruptive to what’s going on up there. But I think you will find good neighbors.”

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