Martin Bilbao, Brandon Block and Rolf Boone / The Olympian
The momentum for a Thurston County-wide tax – most likely a sales tax – to support low-income housing is growing, but county officials said Friday they were hesitant to move forward without assistance from city officials.
This is probably a welcome move in Lacey as some city council members there are already concerned about a lack of input into the process.
Olympia is already levying a city-wide home fund tax that was approved by voters in 2018. There, housing representatives and city officials have been calling for the home fund to be extended to the entire district for years, as there are problems with homelessness and affordable housing in the entire region.
The regional housing council, an advisory committee of the district, advocated a nationwide levy 3-0 on July 28th. The panel has five voting members, but Yelm Mayor JW Foster was absent from the meeting and County Commissioner Carolina Mejia abstained.
Despite being made by Lacey City Council member Carolyn Cox, the motion quickly encountered opposition from her council colleague Lenny Greenstein, who was concerned about the process.
Greenstein raised his concerns during a session of Lacey City Council on August 5th.
“This was never discussed with the council, there was no input from the council, and here our councilor made a motion to move the county forward with a home fund that would tax the people of Lacey without us even discussing it.” he said.
Cox defended her motion, reminding Lacey City Council that the Regional Housing Council was only an advisory body.
“Again, it’s a recommendation,” she said.
The Thurston County Board of Commissioners will ultimately decide whether to adopt the policy, which, according to information shared during a planning session on Friday, would increase about $ 4.5 million to $ 5 million annually. During the meeting, the board decided to withhold action on the policy until employees can develop plans for using a home fund.
Once this is completed, the board said they would like official support from the county’s cities before proceeding.
Although one-off federal funding from the American Rescue Plan can be used to build new homes for low-income and homeless people, buildings require continuous and consistent sources of income to sustain.
“It’s definitely not over once it’s built,” said Beth Doglio, a former Olympia state lawmaker who also serves as vice chairman of Quixote Village, a tiny house community in Olympia that opened in 2013.
Another factor: The towns of Lacey and Tumwater are no longer getting as much money as they initially thought, according to Tumwater Mayor Pete Kmet, who shared them with The Olympian.
Lacey should have received about $ 11 million, but that has now been cut 40 percent to $ 6.8 million. In Tumwater it fell 51 percent to $ 2.5 million.
“The reason is a bit technical,” said Kmet in an email. “Previously, we were classified as an Unqualified City, but at the final allotment we were classified as an Eligible City. This means that a different formula was used to calculate our allocation.”
Where is the council of district commissioners
The Thurston County Commissioners signaled a desire for more community planning and participation before adopting a statewide home fund.
During Friday’s planning session, Commissioners Mejia and Tye Menser stated that their support for the policy depends on what the local councilors officially endorse.
Mejia said she generally supports homeless prevention funding but would like letters of support from Lacey and Tumwater before proceeding with the policy.
“Of course, I don’t want the county to do it alone,” said Mejia. “I would like to know that the other councilors would support that. I didn’t really get that from the RHC.”
Menser came up with the idea of holding a public hearing on the proposal and involving the city councils before the policy moves forward. He said he was glad the RHC shared his point of view, but that didn’t mean the cities were officially in favor of it.
“I agree that we need this support,” said Menser. “This is a regional effort to address a major problem and I will not support it as the two communities involved have objections.”
Commissioner Gary Edwards expressed dissatisfaction with the impact of past efforts to prevent homelessness and said he was against more taxes during a pandemic. However, he said he would support a public vote on the policy.
“I would ask the public to vote on something like that as opposed to a council mandate because it actually lets the legislature know where the support is and if there is support, as opposed to a minority group that is campaigning for that support,” he said.
Mejia told The Olympian that she is not against a home fund, but she wants to pursue a planning process similar to how the City of Olympia set up their home fund.
“I want to be able to tell people, ‘This is what your money will be used for,’ be it a new building or just anything,” said Mejia.
In the absence of a home fund, the board is still considering how state and state funding sources might be able to support low-income homes.
Commissioners agreed that before employees go to town councils or the public, they should come up with some kind of plan showing how a home fund could be used to meet supportive housing goals.
Keylee Marineau, homeless prevention and affordable housing coordinator for Thurston County, said the RHC had asked an assistive housing working group to develop a strategy for creating 150-200 units of permanent assistive housing over the next three years.
She said this plan is likely to be ready by the September RHC meeting and will include specific ways a home fund might be used.
For now, the board is waiting to see what happens to this plan and has instructed staff to consider the possibility of a public hearing. They are also waiting for more information on the ideal time to implement such a policy.
Which cities already have home funds?
The cities of Anacortes, Port Angeles, Tacoma, Bellingham, Ellensburg, and Seattle all have sales tax levies that support low-income housing. At the county level, King, Jefferson, and Whatcom counties collect sales taxes to aid housing construction.
Seattle has had some form of home tax since the 1980s. Tacoma has debated the issue for decades, eventually approving a 0.1 percent VAT hike in April 2021.
King County pledged itself against its fund, raising even more money that it is now using to buy seven hotels to house the homeless.
Olympia is the only Thurston County jurisdiction with a tax levy that supports affordable housing. City residents voted to raise their own sales taxes in 2018 to create the Home Fund, which raises about $ 2.3 million a year. Recent legislative changes now allow city councils to introduce a house tax without voter approval.
What is the Olympia Home Fund?
Olympia’s Home Fund finances the construction of homes for people earning less than 60% of the Area Median Income (AMI), which is about $ 48,000 for a two-person household in Thurston, according to the US Census Bureau’s 2019 American Community Survey County equals.
About $ 1 million of Home Fund money is used each year for low-income housing construction, with the remainder going to homeless shelters and services or held in reserve. Unlike state and federal funds, which often come with restrictions and timeframes in which to spend, local dues can be spent at the discretion of the communities.
This money alone does not build anything; Rather, it’s a way to give the projects some pep so they can compete for state and federal tax credits on low-income residential real estate, which will fund the bulk of construction costs.
Two current projects – Interfaith Works’ 2828 Martin Way and the new development of the Family Support Center for homeless families in West Olympia, each with a budget of nearly $ 20 million – are funded primarily through state and federal tax credits.
“We have many plans, each calling for more permanent, supportive housing, and even with all the resources we have at this unique moment, there is not enough,” said Jim Cooper, member of the Olympic city council chairman of the regional housing council .
Will the rest of the county join in?
The cities of Olympia, Lacey and Tumwater all reaffirmed the need for a permanent source of funding for low-income housing in their respective Housing Action Plans, which were adopted earlier this year.
“Lacey, Olympia, the County and Tumwater all have plans that require a number of strategic activities, both individually and generally, and they all require revenue that is currently not in place,” said Paul Knox, a policy advisor with the Housing was active in guidelines for the city of Tumwater and is now working with Doglio to ensure that municipalities across the country enact home funds.
A 2017 survey of Tumwater residents found that while a majority support theoretically subsidized housing, homeless shelters, and rental grants, less than 40 percent would be willing to pay more sales tax to fund them, and only one in three residents was willing To do this fork over more property taxes to help others house.
Tumwater Mayor Kmet said he was aware of the Regional Housing Council’s recommendation, although he hadn’t heard a firsthand report of the meeting from Michael Althauser, Tumwater City Councilor, the city’s representative at the RHC.
He also said Tumwater City Council had some discussions about a statewide home fund but took no position on it.
The city, he said, is spending about a million dollars in its US bailout plan on housing, but even a million dollars is not going to go very far, given the high cost of construction.
Kmet supports the idea of a nationwide home fund, he said. “I think it makes sense to do something regionally,” he said.