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HomeMy WebLinkAboutPacketCorrected_SKHHP_ExecutiveBoard_2024_10_18SKHHP Executive Board October 18, 2024, 1:00 – 3:00 PM Virtual Meeting Video conference: https://us06web.zoom.us/j/99857398028?pwd=eXFiMmJpQm1abDZmMmRQbHNOYS8 ydz09 OR by phone: 253-205-0468 Meeting ID: 998 5739 8028 Password: 085570 I. CALL TO ORDER a. b. AND ADVISORY BOARD REPRESENTATIVE II. PUBLIC COMMENT III. APPROVAL OF AUGUST 16, 2024 MINUTES Motion is to approve the August 16, 2024 SKHHP Executive Board meeting minutes. 1:11 1:12 REVIEW Presenter: Claire Goodwin, SKHHP Executive Manager Purpose: Review a summary of project applications received and previewed by the SKHHP Advisory Board on October 3, 2024. Background: Applications for the 2024 SKHHP Housing Capital Fund opened in July and closed September 13, 2024. The SKHHP Advisory Board will make a funding recommendation for use of pooled funds for consideration by the Executive Board on November 15, 2024. For review, discussion, and Board feedback only, no action is proposed Presenter: Dorsol Plants, SKHHP Program Coordinator Purpose: Review and discuss a draft of the 2025 SKHHP Legislative priority flyer. Background: At the August 2024 Executive Board meeting, the Board indicated a desire to continue to prioritize increased funding for affordable housing in South King County. SKHHP staff updated a one-page flyer that Board members and Administrators could use in their meetings with state and federal delegates. For review and discussion, no action is proposed Presenter: Claire Goodwin, SKHHP Executive Manager Purpose: General updates. Background: An opportunity to receive any updates since the last Executive Board meeting. For review and discussion, no action is proposed. 2:52 2:58 3:00 SKHHP Executive Meeting August 16, 2024 MINUTES I. CALL TO ORDER Nancy Backus called the meeting to order at 1:04 PM. ROLL CALL/ESTABLISHMENT OF QUORUM Executive Board members present: Nancy Backus, City of Auburn; Dana Ralph, City of Kent; Colleen Brandt-Schluter, City of Burien; Kim Bachrach, City of Federal Way; Sean Kelly, City of Maple Valley; Carmen Rivera, City of Renton; James Lovell, City of SeaTac; Kristina Soltys, City of Covington; Thomas McLeod, City of Tukwila; Eric Zimmerman, City of Normandy Park. Others present: Dorsol Plants, SKHHP Program Coordinator; Maria Arns, SKHHP Advisory Board; Carl Schroeder, Association of Washington Cities; Angie Mathias, City of Renton; Nicholas Matz, City of Normandy Park; McCaela Daffern, King County; Laural Humphrey, City of Tukwila; Evan Maxim, City of SeaTac; Liz Stead, City of Burien; Matt Torpey, City of Maple Valley; James Alberson, City of Renton Alternate; Dafne Hernandez, City of Covington. II. PUBLIC COMMENT No public comment was provided. III. APPROVAL OF JULY 19, 2024 MINUTES Sean Kelly moved to approve the July 19, 2024 minutes as presented, seconded by Carmen Rivera. Motion passed (9-0) IV. AGENDA MODIFICATIONS No modifications to the agenda were made. V.BOARD BRIEFING a. 2025 LEGISLATIVE SESSION UPDATE AND HOW TO ENGAGE THE LEGISLATURE Carl Schroeder, the Government Relations Deputy Director for the Association of Washington Cities (AWC), provided a brief overview of the housing and homelessness issues being considered for the upcoming 2025 state legislative session. The biggest issue dominating thoughts in the interim between legislative sessions is rent control or stabilization. In the last session, the House passed a bill that would have capped the annual rental increase at 7% in most private market rental buildings over ten years old or mobile home parks. The bill failed to advance out of the Policy Committee in the Senate, was passed again in the House, and was referred to the Senate Ways and Means Committee. There was not enough support at the Ways and Means Committee to pass, but the makeup of that committee will be significantly different in the 2025 session. There will also be a new Senate Majority leader, who will change the dynamics of the upcoming sessions. Allies of the rental industry are developing alternate proposals focused more on the standardization of a rental registry and inspections, which would use the registration fee to raise funds for rental assistance. Eric Zimmerman joined at 1:21 PM AWC has worked for many years to find a dedicated revenue source for subsidized housing. Statewide, we know that we need over 1 million new homes, with over half needing to be affordable to 50% AMI or less, which the market is not set up to serve. AWC has supported enhancements to the Real Estate Excise Tax (REET) at the state and local levels. The proposal seems to be losing steam partly because the economy around the commercial real estate market continues to be depressed. A lot of high-value properties that would have been subject to the new REET increment, properties valued over $3 million, would be commercial and multi- family rentals, which have successfully made the argument that now is a bad time to be impacting the market with new taxation with such a demand for their product. The contrast is that the contemplated percentage increase is significantly lower than the commission the folks buying and selling the buildings are receiving, and AWC believes it's still a viable policy. A bill with better chances this year would be the short-term rental tax, which could allow cities to levy at one point up to a 10% tax based on the daily rental rate of a short-term rental like an Airbnb. The tax rate was reduced to 4%, passed the Senate, and got far in the House before dying in the House Finance Committee. The industry has expressed some interest in discussing the possibility of this tax, which could be a good tool. It's important for SKHHP to be aware that Washington has some significant budget challenges this year. Challenges include the underwater transportation budget due to a recently passed transportation package. The legislature must raise funds to meet the obligations already passed in the package. The general fund is also challenged in a few areas, and a couple of initiatives on the ballots could impact the budget. The legislature will not be able to raise funds for every critical issue that needs to be addressed, and housing advocates will need to be vocal about the need to fund housing issues. There has been a trend in the legislature in the last few years to take decisions historically left at the local level and move them to the state level. AWC has been reasonably successful in blunting the worst of those efforts at the city level and worked toward an agreement with the legislature on the Middle Housing Bill, which provides a significant state-level upzoning of single-family neighborhoods with flexibility for local governments. An unfortunate side effect is that the legislature has become more receptive to preemption proposals than they had been previously. The most prominent example is the Transit Oriented Development (TOD) bill, which would significantly increase development capacity near light rail and bus rapid transit stops. This bill didn't pass, likely due to a disagreement between the development and the low-income housing community. The low-income housing community wanted to ensure some degree of affordability included in the bill if the state is going to mandate upzones because it's challenging to put an inclusionary zoning or another requirement in place if the developer has already been provided capacity. The developer community was against any affordability requirement, even one as low as 1%. AWC's position was to put an affordability requirement at the state level but to allow the local jurisdictions to reduce the requirement based on the market conditions in their area. AWC did have concerns about the bill, including the possibility of encouraging further preemption and the use of bus rapid transit stops creating long corridors of capacity. Proponents of the bill would have only applied the mandatory provisions to the Puget Sound area because cities had been so far along in their comprehensive plan work. This bill is likely to return in 2025, but it isn't gaining support at this point. State approval of housing or development regulations that flow from the Housing Elements is likely to return in 2025. This bill is based on a lack of trust that cities will follow the recent state law changes around housing, and there is a desire to have Commerce monitor cities' progress on their work. AWC had several concerns about the bill, including that it would have delayed implementing the changes from the middle housing and ADU bills for six months without a clear value add. The bill would have also put Commerce in a position with few resources and staff to speak on housing elements that are often a balance of interest at the local level. There was no expectation that Commerce would visit communities to capture these dynamics before approving plans. If the state can't be involved in those concerns locally, it would be challenging for Commerce to understand the dynamics unique to the jurisdiction. Another potential bill concerns oversight of emergency housing and shelter placement in cities. The bill was born out of some recent controversies in King County last year around several canceled projects and a service facility having their license temporarily revoked. Those agencies advocated for a way for the state to intercede on their behalf at the local level, and a bill passed the House but did not move out of the Senate Local Government Committee. One solution was the creation of a dispute resolution system so that providers could request resolution between themselves and the city. There could be a value add for cities, but there are potential versions of the bill that would also be problematic, so AWC will watch how this bill progresses next year. AWC is aware of a strong desire from cities to improve affordable homeownership, particularly condominiums. The issue with condominiums is the liability insurance required for the development, which was implemented to protect buyers from purchasing a home built with poor construction standards. This was implemented after a period where bad actors in the construction industry left new homeowners with expensive repair work. The construction and insurance industry has identified that this has led to increased litigation even without a defect in the home being recognized, leading to costly insurance rates. The challenge is that the insurance industry isn't willing to identify which policies would result in them reducing their rates, requiring lawmakers to try to resolve the issue on their own. The desire to protect consumers has remained in the legislature, so wholesale change on condominiums isn't likely. AWC has done some work on the issue around smaller projects and is seeking to ask the state if they can play a role in researching the insurance impacts. Another issue challenging the homeownership environment is the ethic in this state that growth should pay for growth. The idea is that the existing community shouldn't have to pay to make it more feasible for new development and that new development should pay for the impacts to the existing community. While there is merit to this ethic, the reality is that it does raise the cost of new development, and there is a desire to reduce costs. Ways the state has tried to accomplish this include paying for infrastructure or impact fees. Permit reform and reducing regulatory costs are other routes that policymakers take to reduce costs. The challenge is ensuring that those cost savings translate to the homebuyer. Without accountability, the market will sell the home for what someone will pay. Mobile home parks are another area experiencing challenges. Some firms have been purchasing mobile home parks and raising rents very high. Mobile home parks tend to be naturally occurring affordable housing, and there is a lot of interest in figuring out how to preserve them. “Opportunity to Purchase” is already in place, but securing financing can be a real challenge. AWC is also exploring if some low-income infrastructure programs will support mobile home parks. Often, homeowners need help purchasing parks due to the backlog of repairs to infrastructure, and getting them back in working condition is incredibly expensive. A committee of 35 members from large and small cities intended to represent the communities around the state selects AWC legislative priorities. The committee has been working since May and has received feedback from surveys and other AWC committees. Housing funding issues are rising to the top of the discussion this year. After the committee selects its 3-5 priorities, the AWC Board considers and adopts them, and that is when conversations with legislators about what AWC is hoping to accomplish during the legislative session begin. City officials are very busy and may ask why advocating at the state level is vital with so many competing priorities, but the legislature is adopting policies or making budget decisions that impact the everyday functioning of cities. Legislators will hear a lot from advocates or single- interest organizations on specific policies, but it's essential for the legislature to hear from the city officials about the actual impacts of their policy decisions. The 2025 legislative session will be the first biennium session and will last 105 days. The key responsibility of the legislature this session will be to establish the biennium budgets, and this year, it is hard to know what to expect until after the election. This can often be the case when waiting to see which legislators are elected, but this year, two ballot initiatives could directly impact the budget. This will be on top of what is happening in the current economy. There are no major drops in the economic forecast, but if it were to occur, that would impact the session. Carl Schroeder wanted to reinforce that to be successful in the legislature; you must be engaged both during and outside the session. You're lucky to have time with a legislator during the session, but it won't be the time to start a conversation. If rental stabilization interests or concerns you, you should begin the conversation now, as legislators are beginning to make commitments with each other before the session. Carl Schroeder encouraged the Executive Board to find times to invite and meet with the state delegation outside the session. AWC encourages smaller cities to include legislators in the city's budget discussion to help understand the challenges of working with a smaller budget. AWC tries to keep cities informed during the session using various communication tools. AWC will send out a weekly bulletin and hold an action call on Friday during the legislative session, which any city official can join and ask questions or raise concerns. AWC also debuted a bill tracker last year, which allows you to see all the bills they are tracking in one place and see where the bill is currently in the legislature. Even though most housing goes into cities and counties, local governments are only sometimes seen as the primary stakeholders, and lately, they have been seen as a barrier to positive housing outcomes. Carl Schroeder encouraged the Executive Board to insert themselves in the conversation because the state forcing decisions on local jurisdictions is unsustainable. Most cities want good, smart growth in their communities; we all see different ways to get there. There is an idea among some legislators that cities are actively choosing not to build housing, but in most cases, cities are not in the lead and need development partners to produce housing. There are a lot of individual market dynamics; the City of Everett has had unlimited density for years but has yet to see the upzoning often predicted by advocates seeking to increase upzoning. There has been a trend toward simplicity in the arguments around housing, especially supply enhancement, which SKHHP can help by providing a deeper context. Regional partnerships like SKHHP are popular among state legislators, which is an advantage for advocating through SKHHP. Additionally, by combining our region, we have also combined our state delegation, which creates a larger group of state legislators who could advocate for the specific needs of South King County. Nancy Backus asked if there was one bill that Carl Schroeder could see passed what it would be. Carl Schroeder responded that he hopes the REET bill returns, which would be the most impactful over the long term. There is a strong need for dedicated revenue sources to build the housing needed to fill the gap. With the challenges in the system, it will take real revenue to fix them. VI.BOARD BUSINESS a. SKHHP LEGISLATIVE PRIORITY Dorsol Plants informed the Executive Board that the legislative priority flyers SKHHP staff produced from 2022 to 2024 were included in the agenda packet and were available on the SKHHP website. Dorsol Plants explained that one of South King County's greatest strengths is its diversity, but it can also be challenging. If a city is like a cake, the end goal is the same for every baker, but the different flavors and ingredients make each cake special. Want to ride a train to work every day? South King County has a city for that. Want to have a beautiful waterfront with incredible cultural events? South King County has that for you, too. Enjoy having airplanes flying overhead. South King County can make that happen. Each SKHHP member must provide housing, but the need to accomplish that goal varies across our region. Dorsol Plants explained that SKHHP's legislative priorities became less specific and more general to ensure that SKHHP represents the whole region. SKHHP staff have been previously directed not to take specific positions on legislative bills. This is largely because bills change rapidly, and legislation that would have benefited all of South King County can change, requiring SKHHP to rethink whether that item still works for its communities. By the time every jurisdiction can reconnect and confirm its position, the same bill could have undergone additional changes. This was why the Executive Board made changes to its approach last session, focusing on one single priority that benefits our whole region: "fund all aspects of affordable housing." Over the next two decades, SKHHP cities will need over 37,000 units to meet the projected need for affordable housing. To do that, SKHHP will need more funding, and despite some hard work last session, that hasn't changed moving into 2025. Last year, SKHHP Executive Board members were asked to include the SKHHP flyer with their jurisdictions' materials and serve as ambassadors to the state delegation on behalf of SKHHP. SKHHP staff also helped to do the same during the session and ensure that South King County's good work is noticed. An example of this includes Claire Goodwin's work in partnership with SSHA3P during the last session to educate legislators on our capital fund about SB 6173. SB 6173 enabled portions of the SKHHP Housing Capital Fund to support affordable homeownership projects serving up to 80% AMI. The bill was passed, and SKHHP staff modified our funding guidelines to reflect the increased access for this cycle. Another approach that SKHHP began last year was to use its regional voice to uplift priority projects in SKHHP member jurisdictions. SKHHP staff would work with SoKiHo and the Staff Work Group to identify what projects are being prioritized in SKHHP communities seeking capital support or CHIP funding. Often, it can be easier for legislators to connect with a specific project when considering funding over an ask that might sound more open-ended, like adding to our capital fund. Any projects SKHHP highlights would be selected by the individual jurisdiction and align with the priorities of that community. SKHHP could do the same for any Housing Capital Fund projects seeking additional funding. SKHHP staff sent out a couple of email alerts related to bills that could impact our work during the last session. Staff did not take a position on those bills but provided information to the Executive Board via email so that individual board members or their city could respond appropriately to their community's needs. Thinking ahead to the 2025 legislative session, Dorsol Plants has heard a desire to see better collaboration between the state and local housing authorities regarding acquiring and preserving Naturally Occurring Affordable Housing (NOAH). This work ties directly into SKHHP's 2025 Work Plan, which has SKHHP staff sharing opportunities to preserve NOAH. Increased funds are essential to preserve those properties. By highlighting SKHHP's work through the Affordable Housing Inventory Dashboard and our Subregional Preservation Strategies, SKHHP can communicate that South King County has already identified NOAH sites and would be able to implement an increase in preservation funding quickly and effectively. Additionally, work is being done through the Department of Commerce to increase funding for manufactured home preservation. While SKHHP did not call out manufactured home funding in the 2024 priority, roughly 60 registered manufactured home parks are inside of SKHHP member cities. Research shows that the owners and residents of manufactured home parks tend to be senior citizens at significant risk for displacement. Dorsol Plants believes this topic is a good example of how creating shared legislative priorities can be challenging. Manufactured home parks are a unique housing type, and not every SKHHP jurisdiction has a site registered by the state. Rather than taking a broad position on manufactured home parks, SKHHP could focus on parks that a jurisdiction has identified as needing to be preserved and add them to the list of priority projects so SKHHP can increase awareness of the funding need. One of SKHHP's true strengths is providing a unified voice for South King County to raise challenges like the need for more funding. As the South King County cities and SKHHP begin to think about the 2025 legislative session, Dorsol Plants wanted to provide some context and history around creating and adopting priorities. Dana Ralph felt that last year’s approach worked well, and it can be difficult to collaborate on some of the specifics inside of legislative bills. Colleen Brandt-Schluter said she felt the document was still robust and agreed with Dana Ralph that it could be challenging to collaborate beyond a high level on legislative bills. She added that she was interested in the idea Carl Schroeder put forward of inviting the state delegation to meet with the Executive Board. James Lovell agreed with Dana Ralph about staying at the high level. He would like to learn more about how different types of housing play out across the region. Since joining SKHHP last year, he also advocated that SeaTac be added to the legislative flyer. Nancy Backus asked when SKHHP staff would be able to provide an updated draft. Dorsol Plants responded that the draft would be ready by September but presented in October since the affordable housing tour would replace the September meeting. b. 2024 SECOND QUARTER PROGRESS REPORT Dorsol Plants began by recognizing that Claire Goodwin and Jeff Tate were critical to SKHHP's success from April to June. Also, nothing SKHHP staff does would be possible without the Staff Working Group and SoKiHo. Quarterly Progress Reports serve an important role by providing an opportunity to focus on the amazing work of the Executive Board and the Advisory Board. After today's presentation, the report will be provided to our Staff Working Group to communicate back to each of the SKHHP members. Dorsol Plants reviewed a few key highlights from the report and noted that the full report was available as part of the agenda packet. Relating to Goal 1, SKHHP has started the process for the 2024 HCF. While only one pre- application meeting occurred in the second quarter, more have been held since July. SKHHP will no longer schedule pre-application meetings after today. Goal 2 is where a significant amount of SKHHP's work in the quarter, including completing the subregional preservation strategies developed by the amazing SoKiHo team. Additionally, SKHHP staff facilitated a meeting between planners, developers, and faith-based leaders on ways to partner to generate more affordable housing. For Goal 3, SKHHP staff spend a decent amount of time in meetings attempting to keep SKHHP and South King County on people's radars. In the second quarter, a lot of that was getting the word out about the Housing Capital Fund. Finally, much of the administrative work associated with Goal 4 was related to seeking approval from the SKHHP partners on the 2025 Work Plan and Budget. Claire Goodwin worked tirelessly to prepare presentation materials before going on leave and Dorsol Plants and the Staff Working Group presented at the member councils to answer any questions and spread the word about the amazing work SKHHP is doing to support housing in South King County. Dorsol Plants added that on the budget report, the significant difference between Q1 and Q2 was the collection of the 2024 HCF contributions. The current balance for our Housing Capital Fund is over $11 million, including committed funds from 2022 and 2023 that still need to be distributed. c. GENERAL UPDATES Dorsol Plants provided a few couple updates since the July Executive Board meeting. The Staff Working Group met on August 7 to support the work on the agenda and received an update on the status of some of our Housing Capital Fund projects and the upcoming applications we expect in September. SoKiHo met the day before, on August 6, and provided updates and lessons learned as some of the SKHHP cities have completed the county review process and others are getting ready to undergo review. All the South King County planners are very busy doing fantastic work, but they are still making time for this meeting to ensure SKHHP is building a regional voice. On August 13, Dorsol Plants attended the Habitat for Humanity Miller Creek groundbreaking, which is the first SKHHP-supported project to break ground since we began the Housing Capital Fund. The Advisory Board met on August 1 and had a chance to hear from Commerce Housing Trust Fund staff on their process to evaluate projects and ways to collaborate on funding housing. This is the first in a series Dorsol Plants is beginning with the Advisory Board bringing public funders to learn their process and provide stronger recommendations to the Executive Board. A couple of the Advisory Board members who are developers also provided an overview of the decision matrix a developer uses when considering housing projects and provided insight into the tenacity it takes to take a project from idea to reality. Next month, SKHHP will have an affordable housing tour on Sept 20th in place of the Executive Board meeting. The intent will be to examine how funding already committed in South King County is being used. The tour will visit three sites across our region, and the goal is to finish by 3:00 PM. SKHHP staff will extend the calendar invitation till 3:30 PM in case of traffic or other challenges. Dorsol Plants requested that anyone attending the tour RSVP to help ensure there was enough seating provided. If attendees need to arrive late or leave early, Dorsol Plants can provide the tour route. Dorsol Plants thanked the Advisory Board for the presentation last month and informed the Executive Board that a recording was available online. He hopes to have the two boards together again soon. At the July Executive Board meeting, the Board members expressed a desire to form an ad hoc committee related to the second 'H' in SKHHP's name. VII.UPDATES/ANNOUNCEMENTS Dorsol Plants updated the Executive Board that Colleen Brandt-Schluter will be stepping down from the SKHHP Executive Board. Liz Stead, the Director of Community Development, will replace her and represent Burien on the Executive Board. Nancy Backus expressed gratitude for all Colleen Brandt-Schluter's work for SKHHP and said she would be missed as part of the Executive Board. Colleen Brandt-Schluter said that SKHHP has been one of the highlights of her time at Burien, and she is proud of the work everyone has done together. Dana Ralph was grateful for Colleen Brandt-Schluter's willingness to participate and push back in the conversation, and she will be missed in future meetings. VIII.ADJOURN Nancy Backus adjourned the meeting at 2:22 PM. Page 1 of 29 Memorandum South King Housing and Homelessness Partners TO: SKHHP Executive Board DATE: October 11, 2024 RE: Project Applicant Overview - 2024 SKHHP Housing Capital Fund OVERVIEW Six applications were submitted to SKHHP’s 2024 Housing Capital Fund. A summary of each project is included in this memo. The applications include the following: Project sponsor and name Location # of units Project type HB 1590 eligibility SHB 1406 and unrestricted eligibility Amount requested St Stephen/ Way Back Inn – Steele House Renton 6 New Construction Rental $2,370,000 $2,370,000 $2,370,000 TWG – Pandion at Star Lake Kent 251 New Construction Rental $2,000,000 $2,000,000 $2,000,000 Mercy Housing NW – Burien Family Housing Burien 91 New Construction Rental $2,000,000 $2,000,000 $2,000,000 Habitat for Humanity – Burien Miller Creek Burien 40 New Construction Homeownership -- $1,300,000 $1,300,000 Homestead CLT – Willowcrest II Renton 19 New Construction Homeownership $600,000 $600,000 $600,000 Multi-Service Center – White River Apts. Auburn 24 Preservation Rental -- $975,939 $975,939 TOTAL REQUESTED $9,245,939 TOTAL AVAILABLE: HB 1590 $2,770,000 TOTAL AVAILABLE: SHB 1406 $1,030,000 TOTAL AVAILABLE: Unrestricted $300,000 The SKHHP Advisory Board has begun reviewing the six project applications submitted to the 2024 funding round of the SKHHP Housing Capital Fund. A recommendation on which projects to fund is anticipated for the Executive Board’s consideration at the November 15, 2024 Board meeting. Funding requests this year total over $9.2 million, with $4.1 million available. PROCESS Advisory Board recommendation (November 2024) Executive Board finalizes recommendation (November 2024) Member Councils approve funding recommendation (January-March 2025) Page 2 of 29 1. St. Stephen Housing Association/Way Back Inn – Steele House Funding request: $2,370,000 Address: 3001-3006 NE 16th Street, Renton, WA 98056 Eligibility of SKHHP Funding Sources (1590/1406/Unrestricted): All PROJECT SUMMARY Steele House is a 6-unit multifamily rental, low-barrier, permanent housing project with supports in Renton. The project will support households experiencing homelessness earning up to 30% area median income (AMI). Each unit will have 3-bedrooms and 1.5-bathrooms and are intended to serve families. The project is a partnership between St. Stephen Housing Association and Way Back Inn (WBI) who are in the process of merging as an organization. The site is currently owned and operated by WBI and houses a transitional housing duplex for individuals experiencing homelessness. The project would phase out the site used as transitional housing, allowing all six-month leases to end, and tear down the existing structure. WBI intends to transfer ownership of the site to St. Stephen Housing as part of this project. The sponsor also submitted a funding request to the State Housing Trust Fund. SKHHP funds sourced through HB 1590 are eligible to be used to support the entire request. LOCATION The project is located across the street from the Bezos Academy – North Highlands location, Meadow Crest Early Learning Center, and a playground. McKnight Middle School, Renton Highlands Park and Ride, multiple restaurants and retail stores along Sunset Boulevard, and a Rite Aid Pharmacy are all located within 0.5 mile radius. A grocery store is located within 0.6 mile radius. POPULATION SERVED Households with children experiencing homelessness earning up to 30% AMI at entry, with the potential to raise their income up to 50% AMI while living at the property. RELOCATION There will be no relocation necessary for this project. The current site has a duplex which serves as transitional housing through Way Back Inn. The program length is for six months, and the applicant intends to allow the current residents to remain until the end of their lease. New tenants will not be selected until the new construction is completed. SERVICES/PARTNERSHIPS St. Stephen Housing will provide on-site case management services to address any additional needs or challenges that may arise, such as mental health, substance abuse, or employment assistance. The current case manager from Way Back Inn will remain in their position after the merger, ensuring continuity of care. Page 3 of 29 PROJECT SCHEDULE Activity Date Site Control 2016 Building Permits Issued 12/31/2025 Begin Construction 12/31/2025 Begin Lease-up 1/31/2026 Issued Certificate of Occupancy 12/31/2026 FUNDING SOURCES AND USES SKHHP funds would be used for the demolition of the existing structure and new construction of a six- plex. Proposed Funding Sources by Amounts and Status Funding source Proposed Amount Status SKHHP $2,370,000 Applied Applicant Funds $435,000 -- TOTAL $2,805,000 Proposed Use of Funds and Total Residential Cost Per Unit Proposed use Amount Per Unit Construction $2,620,000 $436,667 Soft Costs $100,000 $16,667 Other Development Costs $85,000 $14,167 TOTAL $2,805,000 $467,501 Residential Cost Per Square Foot Item Amount Residential square footage 11,578 Residential development cost $2,805,000 Cost per square foot $242.27 Residential Cost Per Unit Based on Unit Size Unit Size Number of Units Unit Square Footage Cost per Unit Average 3-bedroom 6 1930 $467,581 Common area and other residential spaces, including parking -- 12 $2,907 Page 4 of 29 PROJECT OPERATING BUDGET Numbers reflect year one of the operating budget. Revenues Amount Per Unit Rent $0 -- Rent subsidies $129,600 -- Other $0 -- Annual Vacancy Losses ($1,296) -- TOTAL $128,304 -- Expenses Amount Per Unit Off-site management $36,192 $6,032 On-site management $12,480 $2,080 Utilities $12,500 $2,083 Taxes and insurance $15,000 $2,500 Other $13,300 $2,217 Maintenance & Janitorial $5,000 $833 Asset management fee Resident services TOTAL PROJECT EXPENSES $94,472 $15,745 FUNDS AVAILABLE FOR DEBT SERVICE $33,832 $5,639 Debt service Amount Per Unit Hard $0 -- Soft $0 -- DEVELOPMENT TEAM Sponsor: St. Stephen/Way Back Inn Developer: G2 Civil Architect: Daniel Umbach Architect, LLC Construction: Has yet to be selected Legal: Apex Law Group Property Management: St. Stephen Housing OBSERVATIONS, ISSUES, AND CONCERNS • SKHHP funds are requested in the form of a grant. • St. Stephen Housing and Way Back Inn are merging, and St. Stephen Housing will be the surviving legal entity. Way Back Inn will be absorbed into St. Stephen Housing and staff will stay in place. The current duplex on the site is managed by Way Back Inn and the case manager will stay on as a St. Stephen Housing employee. The merger has just started and there are still a lot of moving parts between organizations. However, the merger is expected to go smoothly, with no outstanding issues of concern, and will close before the end of 2024. Page 5 of 29 • St. Stephen Housing, a non-profit organization, developed City Park Townhomes in Auburn in 2001 with funding from the Washington State Housing Trust Fund, King County Housing Finance Program, the Gates Foundation, and support from the City of Renton. Way Back Inn, a long-time provider of transitional housing in Renton, developed the current proposal. • Preliminary building renderings have been completed, but more detailed structural drawings have yet to be done since the project is in an early phase. • Phase I ESA recommended no further action at this time, and even though the consultant was not able to obtain data from the Department of Ecology, the King County Health Department, or the City of Renton in the timeframe needed to submit by SKHHP’s application deadline, St. Stephen Housing received further comment from the ESA consultant that stated that when the records do become available their professional opinion is that it will not cause any changes to the report. • St. Stephen Housing has reported the intent to use cash reserves totaling $1 million that will be used as bridge funding until grant reimbursement. • The case manager ratio is approximately 1:25. • The project provides badly needed permanent housing with support services for families exiting homeless at 0-30% AMI. • Recent and pending construction in the surrounding neighborhood such as street frontage and sewer improvement by the City of Renton could provide cost reductions on the project. • The project uses the Housing First model and is a low barrier to entry project. The screening process will prioritize factors key for successful tenancy, such as rental history and income verification, while minimizing barriers for individuals who may have experienced past challenges. The project also subscribes to harm reduction policies for tenants living in the project. • The project will implement program rules to promote a safe, respectful, and sustainable living environment for all residents. These rules may include: o Quiet hours: Adherence to designated quiet hours to minimize noise disturbances for all residents. o Guest policy: Guidelines for visitors and overnight guests, including notification requirements and restrictions on the number of guests allowed. o Pet policy: Regulations regarding pets, such as pet registration, leash laws, and waste cleanup. o Maintenance and repairs: Expectations for reporting maintenance issues promptly and taking care of the housing unit. o Community behavior: Guidelines for respectful interactions with other residents and staff. • Should the project not be funded this year, the organization will continue to manage it without demolition until funding is secured for the expansion. They will continue to fund the development of more finalized architectural drawings to move the project to permitting by the City of Renton, using existing reserves. • St. Stephen Housing has not developed any new construction projects within the previous 20 years, although they did receive public funding from the Department of Commerce’s Housing Trust Fund Housing Preservation Program in both 2018 and 2022 for renovations and improvements to the City Park Townhomes in Auburn. Page 6 of 29 • The organization’s Board has members with lived experience of homelessness as well as 20% of their staff. • All staff will prioritize cultural competency and equity to foster a welcoming and supportive environment for families from diverse backgrounds and work towards services that are responsive to the needs of the tenants. • The sponsor will continue their partnership with Parent Trust for Washington Children to provide a Family Advocate who supports families with parenting issues and child abuse and neglect prevention activities; with Neighborhood House, who provides job search assistance and Valley Cities and Catholic Community Services’ CREW program to provide counseling, recovery and wellness services to tenants; and will work closely with Money Matters for financial literacy and planning. The sponsor also partners with both KidVantage and Birthday Dreams to provide diapers, baby needs and birthday support for the children in the program and frequently works with Wellspring Family Services, giving tenants access to a tenant education course. Page 7 of 29 2. TWG Development - Pandion at Star Lake Funding request: $2,000,000 Address: 2526 S 272nd St Kent, WA 98032 Eligibility of SKHHP Funding Sources (1590/1406/Unrestricted): All PROJECT SUMMARY Pandion at Star Lake secured an award from SKHHP in the 2023 Housing Capital Fund funding round totaling $1,170,000. Since that time, the project has been modified to appeal to other funders. The revised project is what is discussed in this memo. Pandion at Star Lake is a 251-unit multifamily, mixed-use rental project in Kent located adjacent to the Kent/Star Lake Link light rail station. The project will support households earning between 30% AMI and 80% AMI. 47 units will support households up to 80% AMI. The project has been proposed as a 4% LIHTC development. This transit-oriented development (TOD) project will provide a mix of studio, one-, two-, and three- bedroom units. The project will include ground floor commercial space consisting of a K-12 learning center for low-income children operated by the Renton-based STEM Paths Innovation Network (SPIN). The property was purchased by the developer in December 2022. The project is a six-story building with five stories of affordable housing over one story of commercial space which also includes ten units of housing at the residential lobby level, plus basement level parking. The 251 units includes 163 units for the general population, 59 units for families with children, and 29 units for families with children that require permanent supportive services and are at-risk of being homeless. 24 units would be accessible units. The project includes 92 studios, 71 1-bedrooms, 36 2- bedrooms, and 52 3-bedrooms. 29 units of the project are eligible for HB 1590 funds which includes those units for families with children at-risk of homelessness and require permanent supportive services who earn up to 30% AMI. Those units would be served by Vision House which would provide on-site supportive services. Of the 29-units, 20-units would be 2-bedroom units and 9-units would be 3-bedroom units to accommodate families. LOCATION The project is in Kent off South 272nd Street and is a transit-oriented development (TOD) project that will be located adjacent to the future Star Lake Link light rail station. Mark Twain Elementary School, the West Hill Medical Clinic, Safeway, UPS Store, a pet hospital, Great Clips, Bartell Drugs, Planet Fitness, an international grocery store, a faith-based organization, and other commercial amenities are located within 0.5 mile of the project. Woodmont Library, a coffee shop, and another gym are located within one mile of the project. Page 8 of 29 POPULATION SERVED The 251 units includes 163 units for the general population, 59 units for families with children, and 29 units for families with children that require permanent supportive services and are at-risk of being homeless. The project will serve households earning 30-80% AMI. RELOCATION No relocation associated with this project. SERVICES/PARTNERSHIPS Vision House will provide supportive services for 29-units set aside for families exiting the Vision House Family Transitional Housing program and are ready for permanent supportive housing at the Pandion. TWG will provide as-needed referrals to supportive services for households residing in units serving 50- 60% AMI. All resident services will be provided onsite or through direct referral through partnership with local providers. TWG and Vision House will combine efforts to hire a community outreach specialist to conduct outreach to identify and network with South King County organizations who could provide additional services to residents. SPIN will likely use all of the commercial space at the project and should they want more space, there is room to accommodate that request. PROJECT SCHEDULE Activity Date Site Control 12/6/2022 Building Permit Issued 12/1/2025 Begin Construction 12/31/2025 Begin Lease-up 11/1/2027 Issued Certificate of Occupancy 12/31/2027 FUNDING SOURCES AND USES SKHHP funds would be used for new building construction. Proposed Funding Sources by Amounts and Status Funding source Proposed Amount Status SKHHP (2024) $2,000,000 Applied SKHHP (2023) $1,170,000 Committed 4% LITC Equity $41,049,507 Applied Federal Energy Equity $153,000 Applied Permanent Loan $38,650,000 Applied Amazon HEF Hard $13,805,000 Applied Amazon HEF Soft $13,805,000 Applied King County TOD $6,500,000 Applied Deferred Developer Fee $5,174,336 Applied SPIN Private Funding $4,413,357 Committed TOTAL $126,720,200 Page 9 of 29 Proposed Use of Funds and Total Residential Cost Per Unit Proposed use Amount Per Unit Acquisition $6,207,361 -- Construction $87,306,025 -- Soft Costs $15,032,371 -- Pre-development/Bridge Financing $1,096,842 -- Construction Financing $9,298,009 -- Permanent Financing $715,250 -- Capitalized Reserves $1,510,078 -- Other Development Costs $4,622,197 -- Bond Related Costs of Issuance $932,067 -- TOTAL $126,720,200 -- TOTAL NON-RESIDENTIAL $4,413,357 -- TOTAL RESIDENTIAL (includes common areas) $122,306,843 $487,278 Residential Cost Per Square Foot Item Amount Residential square footage 278,255 Residential development cost $122,306,843 Cost per square foot $439.55 Residential Cost Per Unit Based on Unit Size Unit Size Number of Units Unit Square Footage Cost per Unit Average Studio 92 415 $182,413 Average 1-bedroom 71 650 $285,707 Average 2-bedroom 36 926 $407,023 Average 3-bedroom 52 1139 $500,647 Common area and other residential spaces, including parking -- 107,767 $47,368,930 PROJECT OPERATING BUDGET Numbers reflect year one of the operating budget. Revenues Amount Per Unit Rent $5,006,448 -- Rent subsidies $0 -- Other $44,076 -- Annual Vacancy Losses ($252,526) -- TOTAL -- Expenses Amount Per Unit Page 10 of 29 Off-site management $239,900 $956 On-site management $405,867 $1,617 Utilities $303,710 $1,210 Taxes and insurance $114,205 $455 Other $168,170 $670 Reserves $62,750 $250 Asset management fee $7,500 $30 Resident services $0 $0 TOTAL PROJECT EXPENSES $1,302,102 $5,188 FUNDS AVAILABLE FOR DEBT SERVICE $3,495,896 $13,928 Debt service Amount Per Unit Hard $3,047,326 -- Soft $448,570 -- TOTAL $3,495,896 -- DEVELOPMENT TEAM Sponsor: Vision House/TWG Development Developer: TWG Development Architect: Ankrom Moisan Construction: Venture General Contracting Legal: Ice Miller & Kantor Taylor Property Management: TWG Management TWG Development has 18 years of development experience with 110 developments across 18 states. Since 2022, TWG has closed over 30 9% and 4% LIHTC projects. TWG Property Management oversees 90 properties, 60 of which are LIHTC properties. The property management plan includes an onsite property manager and onsite maintenance technician five days of the week. OBSERVATIONS, ISSUES, AND CONCERNS • SKHHP funds are requested in the form of a deferred, 1% interest, non-forgivable loan to the LIHTC partnership. • SKHHP is the only public funder that has committed funding thus far. • TWG secured an award from SKHHP in 2023, though it was less than half the amount requested. SKHHP chose to award the reduced funding based on timing of the project’s anticipated construction start date which was further out than other applicants. SKHHP exhausted the available HB 1590 funds in 2023. • The sponsor is structured as a for-profit organization which is impeding the ability of the project to apply for funding at the state level. • Anticipated King County TOD funding to be approximately $20 million this funding round. Page 11 of 29 • TWG has agreed to voluntarily meet the City of Kent’s design standards for the properties zoned as “Midway Transit Community,” which is a higher degree of development than general mixed- use commercial. • Includes 190 parking stalls partially underground. • For the 29 30% AMI units, low barrier to entry with general screening criteria includes: methamphetamine production conviction in federal housing and sex offences, ID and proof of residency required for subsidized units (KCHA), and criminal and sex offender registry are HUD guidelines. • For the Vision House set-aside units, families are required to attend case management meetings. • Residents in the 50% and 60% AMI units will receive residential supportive referral services provided by Vision House and TWG Management. Service referrals are resident-driven and voluntary. The supportive services manager will conduct an initial assessment of new residents upon move-in to identify the service needs of each resident. Services will be tailored to meet the unique needs of each household. • All case management and residential supportive services for the Vision House set-asides will be provided on-site. TWG Management and Vision House will coordinate off-site referral services on an as-need basis. • Project changes between last year’s awarded project and this year’s application are as follows: 2024 2023 Changes Number of buildings 1 2 • Modified from 2 buildings to 1 Populations served 163 units - general population 59 units - families with children 29 units - families with children that require permanent supportive services and are at-risk of being homeless Building 1: 109 units - general population 30 units - families with children 25 units - families with children that require permanent supportive services and who are transitioning out of homelessness or are at-risk of homelessness 4 units - households with I/DD Building 2: 173 units – seniors earning 80- 100% AMI • No seniors at 80-100% AMI • No families that are transitioning out of homelessness • No IDD units • Larger number of general population units in lower income building • More units for families with children Total units 251 341 (168 and 173) • 90 fewer units AMI 0-80% 0-100% • No 80-100% AMI units AMI/unit count 0-30% - 29 30-50% - 114 50-60% - 61 60-80% - 47 0-30% - 29 30-50% - 97 50-60% - 42 80-100% - 173 • Number of 0-30% units unchanged • More 30-60% units • Added 80% units • Removed 80-100% units LIHTC 4% 4%/9% • Not applying for 9% LIHTC Page 12 of 29 3. Mercy Housing Northwest - Burien Family Housing Funding request: $2,000,000 Address: 12845 Ambaum Blvd SW Burien, WA 98146 Eligibility of SKHHP Funding Sources (1590/1406/Unrestricted): All PROJECT SUMMARY Burien Family Housing is a new multifamily 91-unit rental project located near high frequency transit in Burien. The project will support households earning between 30% AMI and 60% AMI with a focus on households with children, including 34 units set-aside for families with children exiting homelessness and 18 units set-aside for households with a physical disability. The project includes the redevelopment of a 4.23 acre site currently owned by Mary’s Place which operates an emergency shelter on-site. Mary’s Place will be donating 2-acres of the project site to Mercy Housing Northwest for the development of new affordable housing, while retaining 1.31 acres of the site for the development of a new shelter to replace the existing one. The project will be four stories in size. The development is comprised of a mix of one-, two-, three-, and four-bedroom units. 52% of the units are family-sized two-, three-, and four-bedroom units. This project received a financial award from SKHHP during the 2022 funding round and secured funding from King County, the Washington State Department of Commerce, the 9% Low Income Housing Tax Credit (LIHTC) program, and the Amazon Housing Equity Fund (HEF) program over the course of 2023 and 2024. The project is a combination 4% and 9% LIHTC project. The project also secured 34 Project- Based Vouchers from the King County Housing Authority and a Resident Services award from King County to support the families leaving homelessness. LOCATION The project is located adjacent to Mary’s Place near the corner of Ambaum Blvd SW and SW 130th St in Burien. Several restaurants, a gas station, Salmon Creek Park, a church with a school, and a grocery store are located within 0.5 mile of the property. The project is a block from transit with access to the Rapid Ride H line providing access to downtown Seattle, operated by King County Metro, and bus route 560, which is operated by Sound Transit, providing access to Bellevue. POPULATION SERVED Families with children, households with a physical disability, and general low-income households earning between 0-30% AMI, 30-50%, and 50-60% AMI. Families exiting homelessness or with a history of homelessness. RELOCATION The project does not result in relocation. SERVICES/PARTNERSHIPS All residents are offered services through Mercy Housing Northwest’s Resident Services Family Program model which has five key support areas which include health and wellness, housing stability, community Page 13 of 29 participation, success in schools and out of school time, and financial stability. Case managers typically work with the resident to develop appropriate case plans and goals; provide on-going assessment and support; assist the resident to utilize community resources to meet individual needs; and work with residents to identify their skills and abilities to promote personal growth. Due to the high number of family sized units, there will be an emphasis on education support for the student and families through the Mercy Scholar Program. These services will include: hosting back to school nights with students, their families, and teachers from local schools; onsite volunteer student tutoring; onsite pre-kindergarten readiness classes with local community partners; and a staffed onsite after school homework club. Mercy Housing Northwest engaged the Highline School district throughout the design process and has coordinated with the local McKinney-Vento Coordinator in preparation for future referrals. Mary’s Place will operate a 70-family emergency shelter on the same site and will provide a variety of community spaces and services to support homeless families. Services and programming typically provided by Mary’s Place include intake and assessment, mobile outreach, shelter, family support, services for children and babies, and homelessness prevention. PROJECT SCHEDULE Activity Date Purchase and Sales Agreement 8/29/2022 Zoning Approval 2/1/2024 Site Plan Approval 8/18/2022 Building Permits Issued 2/25/2025 Begin Construction 4/1/2025 Begin Lease-up 6/1/2026 Issued Certificate of Occupancy 8/1/2026 FUNDING SOURCES AND USES SKHHP funds would be used for new construction. Proposed Funding Sources by Amounts and Status Funding source Proposed Amount Status SKHHP $2,000,000 Applied SKHHP (2022) $1,093,308 Committed 4% LIHTC Equity $9,405,093 Will apply 9% LIHTC Equity $13,446,619 Committed State HTF $4,000,000 Committed King County (2023) $6,000,000 Committed Permanent Amortizing Loan $5,892,060 Reviewing LOIs Amazon HEF Loan $9,500,000 Committed Mercy Loan Fund $999,999 Committed Land Contribution $1,800,000 Committed Deferred Developer Fee $1,011,384 Committed Page 14 of 29 National Housing Trust Fund $1,000,000 Committed King County 2024/CHIP Pass Thru $1,900,000 Applied TOTAL $58,048,463 Proposed Use of Funds and Total Residential Cost Per Unit Proposed use Amount Per Unit Acquisition $1,820,000 $20,000 Construction $42,217,570 $463,929 Soft Costs $8,634,716 $94,887 Pre-development/Bridge Financing $31,000 $341 Construction Financing $2,547,088 $27,990 Permanent Financing $649,691 $7,139 Capitalized Reserves $808,877 $8,889 Other Development Costs $1,042,330 $11,454 Bond Related Costs of Issuance $297,191 $3,266 TOTAL $58,048,463 $637,895 Residential Cost Per Square Foot Item Amount Residential square footage 86,543 Residential development cost $58,048,463 Cost per square foot $670.75 Residential Cost Per Unit Based on Unit Size Unit Size Number of Units Unit Square Footage Cost per Unit Average 1-bedroom 44 526 $352,813 Average 2-bedroom 29 788 $528,549 Average 3-bedroom 15 1062 $712,333 Average 4-bedroom 3 1291 $865,934 Common area and other residential spaces, including parking -- 20,380 $13,669,825 PROJECT OPERATING BUDGET Numbers reflect year one of the operating budget. Revenues Amount Per Unit Rent $1,516,356 -- Rent subsidies $407,016 -- Other $5,460 -- Annual Vacancy Losses ($96,442) -- TOTAL $1,832,390 -- Page 15 of 29 Expenses Amount Per Unit Off-site management $54,600 $600 On-site management $325,516 $3,577 Utilities $164,282 $1,805 Taxes and insurance $228,157 $2,507 Other $185,322 $2,037 Maintenance and Janitorial $14,105 $155 Reserves $31,850 $350 Asset management fee $30,000 $330 Resident services $158,804 $1,745 TOTAL PROJECT EXPENSES $1,033,832 $11,361 FUNDS AVAILABLE FOR DEBT SERVICE $639,755 $7,030 Debt service Amount Per Unit Hard $531,446 -- Soft $108,309 -- TOTAL $639,755 -- DEVELOPMENT TEAM Sponsor: Mercy Housing Northwest Developer: Mercy Housing Northwest Architect: SMR Architects Construction: Walsh Construction Legal: Kantor Taylor Property Management: Mercy Housing Management Group OBSERVATIONS, ISSUES, AND CONCERNS • SKHHP funds are requested in the form of a deferred, contingent, forgivable loan. • The project has been awarded significant financial contributions from King County, State Department of Commerce (Housing Trust Fund), Amazon, and was awarded $1,093,308 from SKHHP in the 2022 funding round. Additionally, the project received a 9% bond allocation in the 2024 funding round through the Washington State Housing Finance Commission. • Mercy Housing Northwest described the need for additional funding due to rising construction costs resulting from inflation and a change in the tax credit equity pricing from the mid $0.90’s to the high $0.80’s which is consistent with the data provided during the Affordable Housing Finance Briefing the Executive Board received in June 2024. • Mercy Housing Northwest has increased their financial contribution to help close the funding gap along with applying to SKHHP and King County for CHIP funds (Connecting Housing to Infrastructure Program) which supports utility improvements for affordable housing. Page 16 of 29 • SKHHP’s HB 1590 funds could support the 34 units set-aside for families with children exiting homelessness and the 18 units set-aside for households with a physical disability who also earn up to 60% AMI. • Mercy Housing Northwest and Mary’s Place convened a special design group for the project made up of neighbors, families with lived experience, service providers, and community stakeholders to help ensure that the project’s design and programs meet a real need in the community. This group has met three times with more meetings scheduled to ensure that as the development proceeds diverse insights are captured in the design. • Since 2018, Mary’s Place has been conducting quarterly outreach with the community to keep residents informed about the emergency shelter onsite. In mid-2021, Mary’s Place began informing the community about the impending project. • The project includes one unit to accommodate an on-site manager living on the property. • The site will include 100 parking spaces but will split them 60/40 between the 91-units and the 75-family emergency shelter. • The project includes a Resident Services Coordinator, Case Manager, Youth Initiatives & School Liaison, and a Community Coordinator dedicating 100% of their staff time to the location. • The project will feature a large community room that will be used for resident services programming and provide space for residents to gather. Some of the events held in the property’s community room will be open to the guests of the Mary’s Place shelter co-located on the site or to members of the larger community. • The sponsor elected to have 75% of all the units apply the following Universal Design strategies to the project: o all hallways are a minimum of 42 inches wide, which will provide more room for those who require aids to promote mobility (specifically wheelchairs and walkers); o all doors are designed with a minimum 36-inch rough opening, or 32 inches clear opening, to ensure that passage of mobility aid devices are accommodated; and o all doors will also utilize lever style handles to help with ease of use, and a 60-inch diameter turning circle is provided in the kitchen and bathroom. • Project changes between the awarded project from the 2022 SKHHP funding round and this year’s application are as follows: 2024 2022 Changes Populations served 34 – families with children exiting homelessness 16 – families with children 18 – households with a physical disability 22 – general population 35 – families with children exiting homelessness 54 – families with children • Fewer units for families with children • Added units for households with a disability and general population Total units 91 89 • One unit added for an on-site manager • One additional affordable unit AMI 0-60% 0-60% • No change Page 17 of 29 AMI/unit count 0-30% - 28 30-50% - 48 50-60% - 14 0-30% - 35 30-50% - 28 50-60% - 26 • More 50% units and fewer 30% and 60% units LIHTC 4%/9% 4% • Added 9% LIHTC Cost $59.7m $47.4m • Higher budget Page 18 of 29 4. Habitat for Humanity Seattle-King & Kittitas Counties - Burien Miller Creek Funding request: $1,300,000 Address: 511 S 136th St Burien, WA 98168 Eligibility of SKHHP Funding Sources (1590/1406/Unrestricted): 1406 and unrestricted PROJECT SUMMARY Burien Miller Creek is a 40-unit homeownership project in Burien. The project is comprised of three- and four-bedroom homes for purchase: 20 units for households earning an average 50% AMI and 20 units for households earning up to 80% AMI. The project is currently under construction and SKHHP awarded the project $300,000 in the 2022 funding round which has been requested to support the construction of three units for households earning 40-45% AMI. All homebuyers must have lived in King County for a least one year and 25% of the homes are reserved for households with a connection to the community – being defined as within two miles from the project. The project will provide permanent affordability through the execution of a ground lease upon sale of the home. Habitat will have the Right of First Option to buy the home at an appreciated rate of 1.5% per year. When the home is resold, the price is set at the cost of acquisition and any rehab needed, allowing the home to be affordable to low- and moderate-income buyers in perpetuity. Habitat requires that the home must be the buyer’s primary residence and must be owner occupied for the life of the home. The buyer’s housing costs will be kept at or below 35% of gross household income. The project has secured awards totaling $23 million and reports a funding gap of $3.3 million. The funding gap is due to increased construction costs, higher interest rates on construction loans, and lower mortgage revenue due to Habitat’s commitment to serve families at lower AMIs in this development. LOCATION The project is in Burien off State Route 509. Five bus lines are within a mile of the property. Cedarhurst Elementary and Cascade Middle School are each about 2.5 miles away, and the property is about 1.5 miles to Highline High School. Two large grocery stores are located within a mile of the property. POPULATION SERVED The project will serve households earning 40-80% AMI. RELOCATION The relocation of three residences was completed in September 2022 using a relocation process approved by King County through a tenant relocation plan consistent with the Uniform Relocation Act. SERVICES/PARTNERSHIPS There are no direct services associated with the project. Homeowners are encouraged to seek leadership roles in their community through the Homeowners Association (HOA). The HOA will take on all upkeep of communal spaces onsite, including building improvements with the support of a professional management company. Page 19 of 29 PROJECT SCHEDULE Activity Date Site Control 3/26/2021 Building Permit Issued 3/24/2023 Begin Construction 9/15/2022 Certificate of Occupancy – First Home 6/1/2025 Certificate of Occupancy – Last Home 7/15/2025 FUNDING SOURCES AND USES SKHHP funds are requested to support new building construction. Proposed Funding Sources by Amounts and Status Funding source Proposed Amount Status SKHHP (2022) $300,000 Committed SKHHP (2024) $1,300,000 Applied King County $3,547,282 Committed HTF $3,125,000 Committed CHIP $1,934,523 Committed HUD $850,000 Committed HTF Unit Subsidy $2,000,000 Applied Homeowner Mortgages $13,136,881 -- TOTAL $26,193,686 Proposed Use of Funds and Total Residential Cost Per Unit Proposed use Amount Per Unit Acquisition $2,086,758 $52,169 Construction $20,931,597 $523,290 Soft Costs $1,906,163 $47,654 Construction Financing $707,405 $17,685 Other Development Costs $561,763 $14,044 TOTAL $26,193,686 $654,842 Residential Cost Per Square Foot Item Amount Residential square footage 54,662 Residential development cost $26,193,686 Cost per square foot $479.19 Page 20 of 29 DEVELOPMENT TEAM Sponsor: Habitat for Humanity Seattle-King and Kittitas County Developer: Habitat for Humanity Seattle-King and Kittitas County Architect: Cone Architecture Construction: GenCap Construction Legal: Habitat for Humanity Seattle-King and Kittitas County OBSERVATIONS, ISSUES, AND CONCERNS • Funding is requested in the form of a grant. • SKHHP awarded this project $300,000 in the 2022 funding round. An AMI change from 50% AMI to an average of 50% AMI was made in early 2023 and the Executive Board was notified of this change on June 9, 2023. There is a current request to apply SKHHP’s 2022 award to three of the 40 units at a deeper AMI level of 40-45% AMI. The Executive Board will discuss this at their November 15, 2024 meeting. • For the 2024 application, Habitat reports that construction costs went over budget due to inflation along with interest rates impacting the mortgages they were able to collect at the AMI’s levels they wanted to serve. SKHHP funds will help the project close the gap and enable them to serve the lower AMI households they have committed to serve. • Over $7 million has been invested in the site. • Three bids for construction have been solicited and the General Contractor has been selected. The contract is anticipated to be executed at the end of October and an updated construction budget will be provided then. • Every homebuyer will have a sale price and mortgage set at no more than 35% of their household income based on household size. • Habitat applied for $2 million from the Department of Commerce’s Housing Trust Fund Unit Subsidy program this round. • 32 3-bedrooms and 8 4-bedrooms spread across 10 buildings. • Historically, out of the total number of households the sponsor has served, 65% identify as BIPOC families. • Habitat has implemented a community preference policy to help guide homeowner selection. Applicants are awarded additional points based on their connection to the community (distance from work/home, utilization of local community services) and other factors that indicate displacement or risk of displacement. 25% of the homes will be reserved for home buyers that achieve community preference points. • 43 parking spaces will be provided. • The sponsor has a debt remediation pilot program that pays off the debt of homebuyers to enable the buyer to secure financing from a traditional lender. • Habitat has a Three Doors Partnership program that focuses on outreach to local organizations whose employees could be eligible for Habitat programs, partnerships with housing programs or homeownership readiness programs that will prepare potential homeowners to be successful in Page 21 of 29 their homeownership journey, and project partnership where Habitat acts as co-developers with another community organization. • Project changes between the awarded project from the 2022 SKHHP funding round and this year’s application are as follows: 2024 2022 Changes Number of buildings 10 10 • No change Populations served Homebuyers with connection to the community Homebuyers with connection to the community • No change Total units 40 Phase 1 – 20 units Phase 2 – 20 units • Removed Phase 1 and 2 and are considering the project a single project. AMI 20 units - average of 50% AMI 20 units - 80% AMI Phase 1 (20 units) – up to 50% AMI Phase 2 (20 units) – 80% AMI • Changed from 20 units at 50% AMI to an average 50% AMI Cost $26.2m $8.4m (First 20 units only) • Higher development cost SKHHP funding request $1.3m for 20 units at average 50% AMI $300k for 20 units up to 50% AMI > $300k for 20 units at average 50% AMI > 3 units at 40-45% AMI • NA – separate requests Page 22 of 29 5. Homestead Community Land Trust - Willowcrest II Funding request: $600,000 Address: 1132 Edmonds Ave NE Renton, WA 98056 Eligibility of SKHHP Funding Sources (1590/1406/Unrestricted): All PROJECT SUMMARY Willowcrest II is the second phase of a community land trust homeownership project located in the Sunset Neighborhood of Renton. The project will add 19 additional two- and three-bedroom townhomes to the 12 that were built in the first phase of Willowcrest. The townhomes are all 3-story with their own private garages. 12 of the townhomes will be permanently affordable homes for households earning up to 80% AMI; three of the townhomes will be sold to households exiting homelessness or are at imminent risk of homelessness earning up to 60% AMI; and four of the townhomes will be market-rate homes. The townhomes are projected to be priced between $250,000 and $320,000 compared to the average sale price in the Sunset neighborhood of $583,000. The land for the second phase was transferred to Homestead in 2023 by the Renton Housing Authority. Homestead Community Land Trust develops land and housing in trust, giving lower-income households the opportunity to own a home that is affordable to them and remains affordable to future homeowners. The land trust model ensures that the homes, when resold, are again sold at an affordable price to another income qualified household. The first phase of Willowcrest won the Governor’s Smart Communities Award in 2022 for being the first multifamily, net-zero energy and permanently affordable homeownership project in King County. SKHHP funds sourced from HB 1590 could support the construction of the three townhomes reserved for households exiting homelessness earning up to 60% AMI. Should Homestead not receive an award, those units would likely be sold for general population households earning up to 80% AMI. LOCATION The project is located in the Sunset Neighborhood in Renton. The project is less than 0.5 mile from the Renton Highlands Library, the Sunset Neighborhood Park, restaurants, retail stores, a major grocery store, and bus routes that connect directly to the Renton Transit Center, nearby commercial centers, downtown Renton, and regional transit options like the Tukwila International Boulevard light rail station. An early learning center and childcare centers are also nearby. POPULATION SERVED First-time homebuyers who have faced barriers to homeownership. 12 townhomes would be sold to households earning up to 80% AMI, three townhomes would be sold to households exiting homelessness earning up to 60% AMI, and four townhomes would be sold at market-rate with no income restrictions. Homestead uses affirmative and fair housing marketing plans on all its projects and anticipates households of color making up a majority of the homeowners. 10 of the original 12 homes at Willowcrest were purchased by BIPOC heads of household. RELOCATION The project does not result in relocation. Page 23 of 29 SERVICES/PARTNERSHIPS Homestead provides post-purchase support to all homeowners on an as-needed basis to address maintenance issues, neighborhood issues or during a period of financial distress. The project is managed by a Homeowner Association (HOA) elected by the residents. The HOA hires a management company to assist in fulfilling its obligations. Homestead provides educational support and training for homeowners to participate and lead their own community. Homestead provides individualized education and counseling services to support homebuyers. Parkview Services works in partnership with Homestead to meet the need of households with intellectual and developmental disabilities. PROJECT SCHEDULE Activity Date Site Control 1/18/2023 Building Permits Issued (Estimated) 5/15/2025 Begin Construction 6/1/2025 Issued Certificate of Occupancy 9/1/2026 FUNDING SOURCES AND USES SKHHP funds are requested for new building construction, contractor overhead, and new construction contingency. Proposed Funding Sources by Amounts and Status Funding source Proposed Amount Status SKHHP $600,000 Applied Renton Density Grant $100,000 Applied King County HFP $1,400,000 Committed National Housing Trust (Amazon Equity Fund) $1,500,000 Committed WA State Housing Trust Fund $1,540,000 Committed Federal Home Loan Bank $630,000 Applied Homestead Equity $103,441 Committed Homebuyer Downpayments $208,180 -- Homebuyer Mortgages $6,731,170 -- TOTAL $12,812,791 Proposed Use of Funds and Total Residential Cost Per Unit Proposed use Amount Per Unit Acquisition $128,520 $6,764 Construction $10,574,097 $556,531 Soft Costs $1,142,500 $60,132 Pre-development/Bridge Financing $50,000 $2,632 Construction Financing $421,000 $22,158 Page 24 of 29 Permanent Financing $75,000 $3,947 Capitalized Reserves $9,500 $500 Other Development Costs $412,174 $21,693 TOTAL $12,812,791 $674,357 Residential Cost Per Square Foot Item Amount Residential square footage 30,047 Residential development cost $12,812,791 Cost per square foot $426.42 DEVELOPMENT TEAM Sponsor: Homestead CLT Developer: Homestead CLT Architect: Third Place Design Cooperative Construction: Edge Community Builders Legal: HCMP Property Management: Homestead has developed affordable homes for households earning up to 80% AMI since 2011. Homestead has completed six new construction projects totaling 100 permanently affordable homes, acquired approximately 25 homes for rehabilitation, and has recently begun construction on two more projects totaling 38 permanently affordable homes. New construction projects completed by Homestead include the Wolcott Townhomes (15 units), the West Seattle Townhomes (2 units); Columbia 26 Townhomes (26 units), Willowcrest Townhomes (12 units), Village Gardens (10 income- restricted and 6 market-rate units), and The Southard (11 income-restricted and 7 market-rate units). The project will have a Homeowners Association managed by a board elected by the residents. Homestead provides educational support and training to assist new homeowners in assuming leadership roles in the HOA. Additionally, all homeowners become members of Homestead with full voting privileges. Shared spaces in the project include the vehicle drive, pedestrian walkway, P-Patch garden, siding, roofs, and other structural elements. OBSERVATIONS, ISSUES, AND CONCERNS • SKHHP funds are requested in the form of a grant. • Homestead Community Land Trust develops land and housing in trust, giving lower-income households the opportunity to own a home that is affordable to them and remains affordable to future owners. • SKHHP funds would enable the project to support homeownership opportunities for those in the lower AMI bracket at 60% AMI. Page 25 of 29 • Agreements will be in place so that the market-rate homes would be required to be owner occupied and cannot be used as investment properties. • While the project is built in phases, this being the second phase, the HOA will cover both sites as one community. • A market study was not conducted but Homestead has completed individual research described in the application demonstrating a demand for the product. • The project is a priority of the City of Renton as an element of the Renton Sunset Transformation plan, of which affordable homeownership is a key part. • 60% of Homestead homes are owned by persons of color. Homestead has 257 homes in trust and has created over 300 first-time home buying opportunities for income-qualified buyers. • Homestead has actively developed affordable homes for those earning up to 80% AMI since 2011. • Homestead will identify eligible applicants who are least likely to apply through partnerships in Renton with various community organizations including the Renton Housing Authority, Urban League, Chinese Information and Service Center, Refugee Women’s Alliance, and Somali Community Services Coalition. • Homestead has an interest of 2,000 income-qualified households. 70% of those on the list are people of color. This applicant pool is the result of outreach work conducted before any specific home is available. Homestead has a referral network of 25+ agencies that serve specific demographically defined communities whose members have been victims of discrimination. Applicant referrals come through those agencies as well. • The Sunset Neighborhood has a 27% poverty rate and over half the residents speak English as a second language. • Homestead requires that potential homebuyers attend a HUD-certified first-time homebuyer’s class. Once they’re determined to be eligible, homebuyers must secure a qualification to buy from a mortgage lender familiar with the community land trust ownership model. Homestead staff coach homebuyers through applying for a mortgage, retaining home insurance, and more. During the purchase process, Homestead supports the buyers in securing an appraisal of the home and an inspection and are present in the home for at least one of the appointments. • The Sunset Neighborhood in Renton has a history of disinvestment, but over the past 20 years, the City of Renton has invested substantial resources to revitalize the neighborhood, focusing on enhancing public amenities, improving housing quality, and increasing accessibility to services. These efforts are part of a broader strategic plan (the Sunset Revitalization Plan) aimed at addressing socioeconomic disparities and improving living conditions for all residents. • Some infrastructure and groundwork for Phase II was accomplished during Phase I of the project, and the same architect, civil engineer and general contractor are part of the team for Phase II, reducing the chances of unforeseen construction challenges. • Willowcrest uses community-oriented design to foster interaction with neighbors while maintain privacy. • The communal play yard is maintained by the HOA and the Renton Housing Authority. Page 26 of 29 6. Multi-Service Center - White River Apartments Funding request: $975,939 Address: 1301 31st St SE, Auburn, WA Eligibility of SKHHP Funding Sources (1590/1406/Unrestricted): 1406 and unrestricted PROJECT SUMMARY The White River Apartments is a multifamily, preservation and rehabilitation 24-unit rental project in Auburn. The building was constructed in 1978 and the nonprofit Multi-Service Center took over ownership in 2000. The project consists of 24 two-bedroom, one-bathroom units in active use which includes three units serving households earning up to 30% AMI, sixteen units at 45% AMI, and five units at 80% AMI. The 80% AMI units are currently occupied by households earning less than 60% AMI and those units would shift to income restricted up to 60% AMI if funding is awarded. The project would not displace current residents. SKHHP funds are requested to support the rehabilitation of the 24 units including: siding replacement, site lighting, parking lot improvements including curbs and seal coating, replacing domestic hot water tanks in all units, re-grading areas adjacent to siding and replacement of exterior entry doors. This project previously applied to SKHHP’s 2023 Housing Capital Fund. LOCATION The project is in Auburn on 31st St SE. King County Metro Route 184 is located within walking distance and connects to the Auburn Transit Center and Sounder Commuter Rail Station. South Auburn Elementary School and Game Farm Park are within 0.5 mile of the project. A grocery store is located one mile from the project. POPULATION SERVED The project serves households earning between 30% AMI and 60% AMI. Five units could serve households up to 80% AMI but are currently serving 60% AMI households and would be formally shifted to 60% AMI if awarded SKHHP funds. RELOCATION The project does not result in relocation. SERVICES/PARTNERSHIPS All residents are offered support from the Multi-Service Center, but there are not direct services associated with tenancy. PROJECT SCHEDULE Activity Date Site Control 1/1/1996 Building Permit Issued End of 2025 Begin Rehabilitation and Renovation End of 2025 End Rehabilitation and Renovation End of 2025 Page 27 of 29 FUNDING SOURCES AND USES SKHHP funds would be used for the rehabilitation of the existing structure. Proposed Funding Sources by Amounts and Status Funding source Proposed Amount Status SKHHP $975,939 Applied TOTAL Proposed Use of Funds and Total Residential Cost Per Unit Proposed use Amount Per Unit Closing, Title, & Recording Costs $5,000 $208 Rehabilitation $747,939 $31,164 Rehab Contingency (20%) $150,000 $6,250 Engineering $20,000 $833.33 Project Management/Dev Consultant Fees $30,000 $1,250 Insurance $3,000 $125 Permits, Fees, & Hookups $15,000 $625 Bond Counsel $5,000 $208 TOTAL $975,939 $40,664 PROJECT OPERATING BUDGET Numbers reflect year one of the operating budget. Revenues Amount Per Unit Rent $382,464 -- Rent subsidies $0 -- Other $0 -- Annual Vacancy Losses ($28,685) -- TOTAL $353,779 -- Expenses Amount Per Unit Off-site management $2,544 $106 On-site management $92,102 $3,838 Utilities $62,000 $2,583 Taxes and insurance $40,500 $1,688 Other $91,500 $3,813 Maintenance/Janitorial $28,430 $1,185 Reserves $20,000 $833 Asset management costs $15,000 $625 Resident services $0 $0 TOTAL PROJECT EXPENSES $352,076 $14,671 FUNDS AVAILABLE FOR DEBT SERVICE $1,703 $71 Debt service Amount Per Unit Hard $0 -- Soft $0 -- Page 28 of 29 DEVELOPMENT TEAM Sponsor: Multi-Service Center Developer: Multi-Service Center Construction: American West Contracting Co. Legal: Kantor Taylor PC Property Management: Allied Residential Multi-Service Center owns and operates over 1,000 units of affordable housing. Multi-Service Center provides a diverse array of housing program services such as rental assistance, emergency housing, transitional housing, and permanent supportive housing. This is Multi-Service Center’s second time applying to the SKHHP Housing Capital Fund for this project and funding was awarded in 2023 for the rehabilitation and preservation of Victorian Place II. Allied Residential has been in operation since 1987 and manages several affordable housing projects. Allied Residential provides the day-to-day management to rent, lease operate, manage onsite concerns, and maintain the property. OBSERVATIONS, ISSUES, AND CONCERNS • SKHHP funds are requested in the form of a grant. • In 2023, Multi-Service Center applied for funding for two projects: this project and Victorian Place II. Funding was awarded to Victorian Place II as that was the priority given immediate safety concerns and the need for rehabilitation. While a strong candidate for funding in 2023, SKHHP had a limited amount of funding and was only able to award one project funds sourced from SHB 1406. • No other funding sources were sought this year. The sponsor applied to the State Housing Trust Fund in 2021 but was unsuccessful due to a high-volume of competing applications. At the time, two of the sponsor’s other projects were selected. • The project applied for funding in early 2024 to the State Department of Commerce Housing Trust Fund, and SKHHP provided a letter of support, but the Multi-Service Center was not successful in securing funding at that time. • When Multi-Service Center originally acquired the property, they received funds from the State Department of Commerce Housing Trust Fund and King County for acquisition and rehabilitation. The existing rent restriction covenant is in place through 2051. A SKHHP covenant would provide affordability for 50 years. • Project includes a 20% cost contingency. • The Multi-Service Center does community engagement via community needs assessment surveys, satisfaction surveys, community outreach events and an annual resident survey. The Multi-Service Center also has a good neighbor strategy where property management is expected to maintain good relationships with neighbors and surrounding businesses. • Preservation through rehabilitation is a funding priority for SKHHP. • 45% of residents of Multi-Service Center properties identify as BIPOC. • Multi-Service Center staff speak a total of ten languages. Page 29 of 29 • Tenants must pass a criminal record screen threshold and are ineligible if convicted of any of the following offenses: o Drug manufacturing/distribution felony offence o Drug use felony offence o Property destruction-related felony offence o Property theft-related felony offence o Sex offence (coerced) felony offence o Violent (non-fatal) felony offence o Violent (fatal) felony offence o Kidnapping felony offence o Meth manufacturing felony offence o Landlord tenant court records or unpaid rental collections: Any number in the last 3 years • The project includes a fenced play area with an accessible ramp into the play yard with recently installed play equipment. • Funding is requested for the following: o Landscaping improvements o Seal coating and restriping the parking lot o Site lighting improvements o Recoating breezeways and replacing railings o New siding o Exterior paint o Replacing gutters and downspouts o Replacing unit entry doors and install metal screen doors o Replace in-unit and laundry water heaters South King Housing andHomelessness Partners (SKHHP) Auburn • Burien • Covington • Des Moines • Federal Way • Kent • Maple Valley • Normandy Park • Renton • SeaTac • Tukwila • King County Who We Are Formed in 2019 by an Interlocal Agreement, we are a collaboration between 11 South King County cities and King County united under the common goal to ensure the availability of housing for all income levels of residents in South King County. We achieve this through a focus on the production and preservation of affordable housing, partnership with public and private organizations, pooling and sharing resources, and advancing housing policies. Purpose Create a coordinated, comprehensive, and equitable approach to increasing housing stability, reducing homelessness, and producing and preserving quality affordable housing in South King County. SKHHP Staff Contact Executive Manager Claire Vanessa Goodwin Phone: 253.931.3042 cvgoodwin@skhhp.org Program Coordinator Dorsol Plants Phone: 253.804.5089 dplants@skhhp.org For more info: Scan QR Code or visit skhhp.org Legislative Priority South King County is facing a growing affordable housing crisis. In order to address this crisis, we need to fund all aspects of affordable housing, including: • Homeownership for moderate income households and below • Preservation of naturally occurring affordable housing (NOAH) • Land acquisition to secure permanent affordability • Permanent supportive housing (PSH) • Infrastructure around affordable housing developments • Workforce housing Our Communities • Residents in South King County face rising housing costs and decreasing affordable supply in ways not found elsewhere in King County.1 • SKHHP member cities are under intense pressure to support their residents’ ability to remain in the community. • 55% of SKHHP city residents identify as persons of color.2 • SKHHP member cities’ average household income is 30% lower than King County’s ($113,542 vs $161,206).3 • South King County residents have the lowest life expectancy in King County, with Auburn-South being the lowest expectancy at birth.4 Housing Capital Fund SKHHP member cities pool funds to support the production and preservation of affordable housing in South King County through the SKHHP Housing Capital Fund. Funding supports the needs of low-income households earning up to 60% of area median income. Funding priorities include projects that advance racial equity, geographic equity, and economic opportunity. To date, SKHHP has supported projects with 550 units of affordable housing in South King County and over $11 million has been pooled. Executive Board SKHHP is governed by a joint board, referred to as the Executive Board, created by an Interlocal Agreement. Each SKHHP partner jurisdiction appoints an elected official or administrator to serve as their representative to guide the work of SKHHP staff. The Executive Board sets SKHHP’s workplan and budget and makes final recommendations on Housing Capital Fund projects. Community Advisory Board An advisory board made up of members of the community and local housing organizations provides guidance to the Executive Board and informs the selection of Housing Capital Fund projects. The Advisory Board ensures representation of South King County’s diverse communities within SKHHP’s work. 1 Puget Sound Regional Council: Regional Housing Strategy 2022 Monitoring Report (p. 31) 2 2021 American Community Survey 5-year Estimates: P1 - Race 3 Calculated the weighted average household income of SKHHP member cities using total number of households by city and average household income by city as published in the 2021 ACS: S1901 – Income in the Past 12 Months 4 King County Community Health Needs Assessment 2024/2025 (p. 62)