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SKHHP Executive Meeting
February 21, 2025
MINUTES
I. CALL TO ORDER
Dana Ralph called the meeting to order at 1:03 PM.
ROLL CALL/ESTABLISHMENT OF QUORUM
Executive Board members present: Dana Ralph, City of Kent; Liz Stead, City of Burien;
Kristina Soltys, City of Covington; Gene Achziger, City of Des Moines; Brian Davis, City of
Federal Way; Victoria Schroff, City of Maple Valley; Eric Zimmerman, City of Normandy Park;
Carmen Rivera, City of Renton; James Lovell, City of SeaTac; Thomas McLeod, City of Tukwila.
Others present: Claire Goodwin, SKHHP Executive Manager; Dorsol Plants, SKHHP Program
Coordinator; James Alberson, City of Renton Alternate; McCaela Daffern, King County; Dafne
Hernandez, City of Covington; Laurel Humphrey, City of Tukwila; Angie Mathias, City of Renton;
Lisa Vatske, WA State Housing Finance Commission.
II. PUBLIC COMMENT
No public comment was provided.
III. APPROVAL OF JANUARY 17, 2025 MINUTES
Eric Zimmerman moved to approve the February 17, 2025 minutes as presented, seconded by
Kristina Soltys. Motion passed (9-0)
IV. AGENDA MODIFICATIONS
No modifications to the agenda were made.
V. BOARD BUSINESS
a. ELECTION OF CHAIR AND VICE-CHAIR
Dana Ralph informed the Board that a call for nominations for the position of Chair and Vice-
Chair of the Executive Board was made at the December 2024 and January 2025 meetings.
Nancy Backus was nominated for Chair, and Dana Ralph was nominated for Vice-Chair. No
other nominations were received.
Dana Ralph made a final call for nominations for the Chair and Vice-Chair positions.
Dana Ralph turned over the facilitation of the meeting to Claire Goodwin to conduct the election
of the Chair and Vice-Chair.
Victoria Schroff moved to approve the nomination of Nancy Backus for Chair, seconded by
Thomas McLeod (9-0)
Eric Zimmerman moved to approve the nomination of Dana Ralph for Vice-Chair, seconded by
Kristina Soltys (9-0)
Claire Goodwin returned facilitation of the meeting to Dana Ralph after completing the election
process.
Dana Ralph expressed gratitude for the Board's support of her and Nancy Backus as Chair and
Vice-Chair.
VI. BOARD BRIEFING
a. WASHINGTON STATE HOUSING FINANCE COMMISSION (WSHFC) OVERVIEW
Lisa Vatske, the Director of Multifamily Housing and Community Facilities at WSHFC, provided
an overview of the Low-Income Housing Tax Credit (LIHTC) Program facilitated by WSHFC.
WSHFC was created by state law and is a self-sustaining state agency that receives its
resources from the financial tools it administers. These tools include developer or bank fees,
which use WSHFC's programs and make them nimble and responsive to the market. Most of
the tools WSHFC uses are market driven.
WSHFC recently updated its mission: "We work to provide equitable access to capital through
strong partnerships and innovative financing to create and sustain affordable rental housing,
homeownership, and community spaces across Washington State."
WSHFC has financed over 100,000 affordable apartments using federal tax credits and bonds
and partnered with state and local funds. It is usually a mix of financing required to put together
for a project to be successful. WSHFC partners with for-profit and nonprofit developers, housing
authorities, tribes, and community-based organizations. Funding for homeless housing projects
is often through the 9% program. There is also funding available for retirement communities.
WSHFC supports the whole continuum of housing. All WSHFC projects are income and rental-
restricted and are monitored for 30-40 years for health, safety, and income-restriction
compliance.
LIHTC is a federal program administered by the IRS, and the program is governed by the tax
code, which makes it different from most other housing programs. The pricing for the tax credit
is dependent on the private equity market. The investors purchase the tax credit, which is how
money is moved into projects. Leveraging other funds is often required, and LIHTC tends to
make up 50-80% of the financing, depending on the dollar value of the tax credit. Tax credits
and bonds fund most projects, and the tools have become highly competitive. A coordinated
group of public funders meets every two weeks to ensure that state, WSHFC, and local funders
are aligned on projects.
Tax-exempt bond financing is another tool available to WSHFC, but it is a form of debt, not a
subsidy. Rate differentials make it slightly cheaper than commercial interest rates for similar
financial tools. A lower subsidy tax credit is brought to the table when a tax-exempt debt is
issued. There are two forms of tax credits: one is a state allocation, and the other comes from
issuing tax-exempt debt. WSHFC has also been able to recycle bonds to reissue when
construction lending converts to permanent financing, but it does not come with the tax credit
equity. While not as substantial, it has been a way for WSHFC to extend its resources under the
private bond cap each state receives.
The process begins when WSHFC allocates tax credits to a developer. The developer then will
sell those tax credits to an investor; the tax credit lasts for ten years, and the investor stays in a
relationship with the project during that time. After fifteen years, the equity investor steps out,
and the sponsoring developer takes the project on for the next fifteen years. This is how
WSHFC can ensure affordability over thirty years. Any compliance issues are reported to the
IRS. This is a unique but effective tool since it was put into place by the Reagan Administration.
Claire Goodwin asked for clarification on the fifteen-year extension for the sponsoring
developer. Lisa Vatske responded that the sponsor and investor enter an initial partnership for
fifteen years, during which the investor can take advantage of the tax credits for ten years. The
IRS is primarily focused on the first fifteen years of this partnership. From a state policy
perspective, a point system incentivizes long-term affordability for thirty years when a project
applies for credit. When stacking other public funds, other funders tend to have longer terms of
affordability than the initial fifteen years.
Thomas McLeod asked for an illustration based on an SKHHP-awarded project. Lisa Vatske
used Mercy Housing NW Burien Family Housing, which is a 4%/9% project. Mercy Housing NW
went to WSHFC and received tax credits, which Mercy Housing NW sold to an investor who
became an investing partner of Burien Family Housing for the next fifteen years. WSHFC will
monitor the project for compliance during the next fifteen years.
Victoria Schroff asked for confirmation that the investor was purchasing a tax exemption. Lisa
Vatske confirmed that the credits would serve as an exemption from Federal Income Taxes and
are filed annually by the investor. Often, this will be banks, insurance companies, and some
larger private entities seeking the benefit of tax exemptions. Sometimes, this will be an
individual organization or a syndicate of several organizations seeking tax credits.
James Lovell added some context as an interim CEO of the Chief Seattle Club, which has
around $40 million in tax credits. Chief Seattle Club doesn't have the capital to open a new
building, and even combining federal, state, and local funds would not have been sufficient to
fund the project. Working with an aggregator, the Chief Seattle Club collected enough tax
credits to fund the project. When using tax credits, the building has a timeline for full lease-up,
and any delays in the project could cause significant issues for the project to meet deadlines
associated with their investor. At year fifteen, the investor exits, and things can pivot, which will
look very different for nonprofit and for-profit developers.
The price per credit will determine how much will be invested in the housing. The Seattle/King
County market was at one point receiving over $1/tax credit but is currently around $0.85/tax
credit. For an allocation of $900,000, credits at $0.97/tax credit would be $8.73 million in equity,
and at $0.85/tax credit, it would be $7.65 million. The amount of funding available will depend
on the market and the investors' appetite. Pricing is complicated and has and will continue to
evolve over time.
The State Housing Trust Fund is another major funder in Washington State, with whom WSHFC
will regularly coordinate and collaborate. Roughly every dollar from the state Housing Trust
Fund leverages $5.35 of tax-exempt bonds and federal tax credits. About 40% of properties in
the state are jointly financed by WSHFC and Commerce, but Commerce only partners with
nonprofits, whereas WSHFC will partner with both for-profit and nonprofits. A typical funding
stack will have about 3% of local funds like the SKHHP Housing Capital Fund, and 36% will be
LIHTC Private Equity. There is an option with LIHTC for developers to defer their developer fee
and contribute it back into the stack. The developer receives equity when using this program.
Most of the costs for development will be material and labor, but when using tax credits,
financing fees and expenses must be added to the project. A lot goes into building affordable
housing, and there is no simple solution to increase housing production.
Each state receives an allocation based on a per capita formula for private activity bonds.
WSHFC also receives a 9% allocation based on a separate per capita formula. The 9%
allocation used to be the most competitive source of funds, but both sources have become
highly competitive. The Bond Cap was "first come, first serve" because the debt had to be
issued under the Private Activity Bond Cap provisions. To access the credit, you must issue
50% of your total project cost in debt to receive the 4% credit. This meant most developers
opted to use the 9%, but as 9% became more competitive, developers began learning to utilize
the 4%. A new framework for bond cap allocation was set in 2021 to transition from "first come,
first serve," which favored Snohomish and King County, to more of a geographic distribution.
Because these funding sources require you to pay debt, they do not work in many parts of the
state. This led WSHFC to a 40% balance of state to encourage more projects from across the
state. A definition was also set for "By and For Community" to bring more focus on who the
funding is being provided to, and encourage more community-based organizations. WSHFC has
also looked at how to better leverage public funds. Initially, many projects were able to be fully
funded by WSHFC programs, but as housing became more expensive, it became essential to
coordinate with other public funders to support gap funding for projects. As more nonprofits
began to access WSHFC funding with the new "By and For Community" definition, the
program's competitive nature increased, and WSFHC was required to align more with other
public funders.
The 9% program is split into three geographic buckets: Seattle/King County, Metro, and a
balance of state. For many years, the King County bucket was pipelining projects because
WSHFC could target how much credit was going into each area. The public funders would then
attempt to align their projects based on the amount of tax credits. WSHFC targets the lowest
income/highest needs and Permanent Supportive Housing with the 9% program. Because the
Bond Cap program requires debt, projects financed with Bond Cap tend to serve the 50-60%
AMI range. Each program has slightly different targets.
In 2024, King County went through a tiered process due to the oversubscription of the bond cap.
If a project is fully funded with local funds and permit-ready, it will go on the tiered list so when
it's ready to close, it can close. Coming out of COVID, projects are taking longer in the pipeline,
and more significant challenges are being placed in service and achieving full lease-up,
especially in the Seattle/King County market. Being unable to lease up fully can make it
challenging to meet some requirements to transition from construction lending to permanent
financing. The hope is that the tiered process reduces some confusion in applying for funds,
with the intent for developers to get in line instead of continually re-applying for funds. The
whole process starts with the local investment, and WSHFC wants to take cues at the local level
and build on that.
Claire Goodwin asked what “balance of state” means. Lisa Vatske responded that it can mean
two different things in two different places. For the Bond Cap program, 50% of the total bond
cap is set aside for King County, 10% for Snohomish County, and 40% for the rest of
Washington State. In the 9% program, the split has 30% set aside for King County, 30% for
Metro Counties (Clark, Pierce, Snohomish, Whatcom, and Spokane), and the remaining amount
is set aside for the rest of Washington State.
Victoria Schroff noted that on a previous slide, only 3% of the funding for a project is from local
sources and asked how impactful local funding would be. Lisa Vatske said having a local
commitment is an important puzzle piece. The more funding a local jurisdiction can provide, the
better the project will be. The bottom line is that funding requires these many different layers
because it's rare for a single public funder to be able to fund a project entirely. The funding of a
project starts with SKHHP and other local funders.
WSFHC has worked hard to coordinate and stretch resources. Microsoft has provided a $250
million no-cost line of credit, which enables the recycling and reissuing of bonds. Microsoft has
also been supportive of land acquisition in East King County. The Evergreen Impact Housing
Fund, in partnership with the Seattle Foundation, Microsoft, and local credit unions, offers gap
financing for affordable housing, leveraging tax bonds and credits as additional funding.
Amazon Housing Equity Fund has also been a big funder in King County and provides low-
interest loans to supplement recycled bonds. Some of the fantastic work done with Microsoft in
our region has been replicated in California and other parts of the country to great success.
The Affordable Housing Credit Improvement Act is federal legislation championed by Senator
Maria Cantwell and Representative Susan DelBene, which has several provisions, including an
increase to the 9% program, lowering the 50% test to 25%, and other policy improvements.
There is also a lot of focus on the federal budget and the March 14 deadline. WSFHC is
proactive in supporting the bill and anticipating market uncertainty. Natural disasters like the LA
wildfires will impact construction materials, increase prices, and add to the uncertainty that may
affect closing projects as investors wait to see how the landscape will be shaped. The Inflation
Reduction Act, which included funding, tax credits, and rebates for energy efficiency and
greenhouse gas reduction, is on hold.
The Land Acquisition Program has been successful since 2008. It started with $1 million from
the state and $1 million from WSFHC and is around $80 million now. Sound Transit has recently
added $20 million in funding to support transit sites. The program buys and holds land using a
deferred-interest loan.
Thomas McLeod asked if there was a deadline for land purchased to begin development. Lisa
Vatske said the deadline is eight years, but WSFHC wants a plan in five years. Typically, they
have seen repayment in four and had a requirement that land be held for two years, but they
have backed away from that requirement. At one point, the program had roughly $120 million to
invest and had a revolving loan. In 2022, the state added $40 million to replenish the fund when
it went low, and Microsoft added another $50 million for “By and For Community” programs. The
program still has funds available for land acquisition in King County.
WSHFC has a robust homeownership program that provides down payment assistance and first
mortgages. The focus is less on development and more on purchasing homes, and WSHFC
offers home buyer classes. WSHFC issues bonds and buys bank loans to help people with their
first mortgages. The Covenant Homeownership Program provides a set amount of down
payment assistance to help offset racial discrimination and is administered by WSHFC. Since its
launch in 2024, the program has helped over 200 households. WSHFC offers a confidential
hotline to provide foreclosure assistance. While there was funding, most sources will sunset by
the end of June. There is a bill in the state legislature to fund foreclosure counseling.
WSHFC does a significant amount of work in other areas of affordable housing, including
manufactured housing support, by helping tenants purchase the land underneath them. A
partnership with Habitat for Humanity helps purchase and provide liquidity for Habitat for
Humanity projects. WSHFC provides energy financing for all projects and has worked to align it
with housing. WSHFC has a beginner farmer-rancher program and can issue activity bonds to
finance new farms and additional farmland supports. WSHFC also supports WCRA, a
consortium of banks that help provide smaller loans.
Victoria Schroff asked for the legislative bill number for the foreclosure counseling bill. Dorsol
Plants responded that it was SB 5686.
James Alberson asked where he could find more information on WSHFC manufactured housing
support. Lisa Vatske responded that it was listed under ‘other’ on the WSHFC website and that
she would send the direct link.
VII.BOARD BUSINESS CONTINUED
a. 2024 ANNUAL AND QUARTER 4 REPORT
Claire Goodwin provided an overview of the 2024 annual report and noted that its format had
changed. She thanked the City of Auburn's design team for its assistance in updating the report.
Claire Goodwin informed the Board that 2024 was an excellent year for SKHHP. For Goal 1,
which is to fund the expansion and preservation of affordable housing. SKHHP welcomed the
City of SeaTac to the consortium, and with that came our first general fund contribution to the
Housing Capital Fund. A key player and essential partner in addressing the regional housing
shortage, SeaTac's participation has strengthened our group and shown the region and state
that South King County cities are a unified coalition committed to supporting the construction
and preservation of homes affordable to our low-income neighbors.
Along with SeaTac's contribution, SKHHP welcomed another new source of revenue to the
Housing Capital Fund from Maple Valley, which pooled its HB 1590 funds. 2024 marked the first
year all SKHHP member cities contributed to the Housing Capital Fund. In 2024, $4.1 million
was made available for the 2024 Housing Capital Fund funding round, bringing the total amount
pooled to over $11.2 million over the last three years. A total of $11.2 million has been
committed to South King County projects, except for about $10,000.
Other achievements from 2024 include collaborating with the South King County long-range
planners (SoKiHo) to develop the subregional affordable housing preservation strategies.
SKHHP staff and SoKiHo are currently evaluating where alignment is across the jurisdictions to
inform SKHHP’s work plan for 2026 and the five-year plan.
Staff represented SKHHP in various regional meetings and forums and attended 163 regional
meetings in 2024, representing 43 unique groups. Additionally, six new members were
appointed to the Advisory Board through a new process involving Executive Board participation
on the interview panel. During the Executive Manager's parental leave, Dorsol Plants and Jeff
Tate took over the reins and implemented the coverage plan, doing a fantastic job.
SKHHP's budget position is strong. Revenue from member contributions totaled around
$354,000. Interest is accrued on our fund balance in the operating and capital accounts, and
interest earnings in 2024 totaled $493,000. This high yield is due to the $11.2 million pooled for
the housing capital projects awaiting distribution.
SKHHP operating expenditures totaled $302,000 in 2024, with savings in the wages category
due to the SKHHP Executive Manager's parental leave. SKHHP's revenue from member
contributions is comparable to our annual expenses.
SKHHP's beginning fund balance in 2024 was $377,000, which included $153,000 in accrued
interest from previous years and the carryover fund balance of earlier years. SKHHP's ending
fund balance in the operating account, excluding interest earnings, totals $430,000. Adding the
interest accrued in 2024 brings the total to $923,000, but the final interest earnings for 2024
may be about $45,000 higher than currently shown. SKHHP staff will update the report and
send it to our Staff Work Group members to distribute to the member City Council as required
by SKHHP's interlocal agreement.
Indicators to measure progress on our established goals were included in the SKHHP work plan
for the first time in 2024. Claire Goodwin intends to report on the indicators during the annual
report rather than each quarterly report since many of the items require an entire year's worth of
data. The indicators were included in the 2024 work plan and adopted by the SKHHP member
City Councils. The numbers are cumulative to show SKHHP's progress over the years.
Indicators for Goal 1:
• Number of housing units or number of projects funded with financial support from
SKHHP: 4 projects, 406 units (2024); 7 projects, 679 units (2022-24)
• Number of housing units preserved with financial support from SKHHP: 24 (2024); 44
(2022-24)
• Total dollar amount pooled by member jurisdictions for Housing Capital Fund:
$3,959,020 (2024); $11,251,725 (2022-24)
• Total dollar amount from new sources of revenue added to the Housing Capital Fund:
$800,000 (2024)
• Geographic diversity of applications received for annual Housing Capital Fund funding
round: Auburn, Burien, Kent, Renton (2024)
Indicators for Goal 2:
• Number of preservation policies explored with members of the Executive Board: 16
• Successful update of data and deployment of the Affordable Housing Inventory
Dashboard: Yes
• Number of relationships built with developers: 14 (2024); 34 (2022-24)
• Number of Executive Board briefings on key housing and homelessness topics: 6 (2024)
Indicators for Goal 3:
• Number of events or engagement opportunities Advisory Board members organized or
supported: 2 (2024)
• Number of communications published: 4 (2024)
• Number of meetings, forums, or events attended that advance SKHHP’s mission: 160+
(2024)
Indicators for Goal 4:
• Work plan and budget adopted: Yes
• Quarterly progress reports prepared and presented to the Executive Board: Yes
• Financial reports and public records maintained: Yes
• Commitments of the Affordable Housing Inventory Dashboard contract fulfilled: Yes
• Website maintained: Yes
• Application submitted for SKHHP Foundation 501c3 status: No
b. 2025 STATE LEGISLATIVE UPDATE
Dorsol Plants provided a brief update on the 2025 State Legislative Session, which has been
intense. The budget deficit has weighed heavily on many discussions. Even with new revenue
sources, departments will likely have to make cuts this session. SKHHP staff has reviewed over
140 bills related to housing or homelessness this year.
Dorsol Plants briefly touched on the SKHHP 2025 adopted legislative priority of funding all
aspects of affordable housing and noted that SKHHP does not take positions on legislative bills.
February 21, 2025, is the Policy Committee Cutoff, and it will be the last day to read committee
reports in the House of Origin, except for House fiscal committees and Senate Ways & Means
and Transportation committees. This is the first cutoff for the 2025 session, and bills that have
not had an executive session or hearing by today will likely not move forward.
Dorsol Plants provided brief information about a few bills SKHHP monitors this session.
HB 1694, which concerns revenues from the excise tax, would expand Real Estate Excise Tax
(REET) funds to cover a wider range of projects related to homelessness. The SKHHP
Executive Manager included more detailed information on HB 1694 in the agenda packet sent
on February 10.
HB 1717/SB 5591 would create a sale and-use tax remittance program for affordable housing.
HB 1717 is a priority for Governor Ferguson, and Rep Leavitt circulated a flyer containing more
information that the SKHHP Executive Manager shared with the Board. The bill would create a
sustainable source of funding for affordable housing. Developers could use the remittance for
materials, labor, and other costs. Local jurisdictions could also recompensate general funds to
support affordable housing development and incentivize local support. Cities and counties
would be able to pool rebated funds together.
HB 1907/SB 5711 would define the rental or lease of individual storage space at self-service
storage facilities as a retail transaction for the imposition of business and occupation and sales
and use taxes. The new funds would be directed toward establishing and preserving
cooperatively owned manufactured home communities and programs to support and maintain
affordable housing. One source estimates that this change could generate about $40 million
annually starting in 2027.
HB 1299/SB 5184 would prohibit cities and counties from imposing minimum parking
requirements for affordable housing and other housing types, such as senior housing.
Additionally, minimum parking requirements for cities and counties planning under the Growth
Management Act would be repealed, and new requirements would be put in place for housing
types not exempt from minimum parking requirements. Dorsol Plants noted that SB 5184 is
active and moving forward.
SB 5725 would expand affordable housing opportunities on community and technical college
lands by authorizing the state board for community and technical colleges to enter 99-year lease
agreements to develop affordable housing on underutilized community and technical college
land.
SKHHP staff can provide more information during the legislative session or follow up on
additional questions.
Thomas McLeod asked if it appeared like HB 1491 would be moving forward. Dorsol Plants
responded that HB 1491 was referred to the capital budget on February 19, which meant it
would move past today's cutoff. Dorsol Plants had heard mixed things about whether the bill
would pass this year and acknowledged that certain elements made supporting the bill a non-
starter for a few of the SKHHP cities. Claire Goodwin added that during a King County briefing,
legislators had mentioned that they had not heard much feedback from cities on the bill and that
interested cities should reach out through their lobbyists.
Brian Davis commented that there should be a future discussion on the SKHHP legislative
priority. The current statement is very broad and states a need to fund all aspects of affordable
housing. After the legislative update, it's clear that SKHHP isn't supportive of every method to
fund affordable housing, and it would be worthwhile to have a more refined discussion on
SKHHP's position to fund all aspects of affordable housing. Claire Goodwin confirmed that a
discussion of the legislative priority would occur in preparation for the 2027 session and that
SKHHP does not take any positions on specific legislation. Brian Davis acknowledged that but
noted a concern that handing the flyer stating "all aspects" could suggest a different position
than one the jurisdictions hold.
c. GENERAL UPDATES
Claire Goodwin informed the Board that the next Executive Board meeting is the first in-person
meeting of 2025 and will be held on March 21 at 1:00 PM in the Auburn Council Chambers. The
Executive Board will begin developing the 2026 work plan and SKHHP five-year plan. Executive
Board members who can only attend virtually or won't be able to make it were asked to let
SKHHP staff know so they can find ways to incorporate their input.
Claire Goodwin provided a link for a scheduling survey for the June meeting. Based on the
responses, the June 20 in-person meeting will likely be moved up by one week to June 13.
Claire Goodwin was re-appointed to the Puget Sound Regional Council's Regional Transit
Oriented Development Committee, which advises the Growth Management Policy Board on
equitable TOD development, to serve as a representative for SKHHP.
Claire Goodwin shared a one-pager from Rep. Leavitt explaining HB 1717, which would
authorize cities and counties to establish a sales and use tax remittance program for affordable
housing, to bring it to the Executive Board's attention. The intention is to be informational only;
anyone interested in supporting the bill is encouraged to work with their lobbyists.
By the March Executive Board meeting, SKHHP staff will be on track to close on two of the
awarded Housing Capital Fund projects, including the Victorian Place II from the 2023 funding
round and Burien Miller Creek from the 2022 funding round.
SKHHP staff are visiting the member City Councils and have presented in Burien, Covington,
and SeaTac. Next week, SKHHP staff will be in Auburn and Maple Valley and will visit the rest
of the member Councils through April.
VIII. UPDATES/ANNOUNCEMENTS
No updates or announcements were made.
IX. ADJOURN
Claire Goodwin adjourned the meeting at 2:44 PM.
Program Coordinator - SKHHP