Affordable Housing Part 3

If money is raised for affordable Housing Projects, what can or should it be used for? This piece explains two approaches: building and rental vouchers. This a more technical discussion of what Walla Walla County, as the distributor of raised housing funds, is considering.  

Building

The housing issue is described in the first piece in the series, Affordable Housing Part 1.The inadequate supply of affordable housing units is clear in the data from Walla Walla trends and reported in Walla Walla Valley’s new-home building falls off. Construction is the straightforward answer to an insufficient supply of appropriate housing but the primary roadblock is cost.  

Simply, building is expensive. The Lariat Gardens project of the Walla Walla Housing Authority cost over $12 million and added 43 affordable units. A tax measure would raise between $7 million to $21 million over 7 years. So could Walla Walla even build?

The answer is yes. Through a combination of State and Federal programs, the money from a ballot measure could be leveraged for additional funds. There is grant money available through both Federal and State programs, such as the Department of Housing and  Urban Development (HUD) and the Washington State Housing Trust Fund.

Could Walla Walla pursue a building program with grant aid?

The short answer is yes. Walla Walla County could pursue a building program after pooling the money for several years and packaging the funds to pursue state and federal grants. The County can not yet pursue such money because, to apply for such programs, the locality must already have money put towards affordable housing. In addition to raising the money, the County would require an administrative and managing partner oversee the program. The likely choice for this is the Walla Walla Housing Authority, a municipal corporation aimed at creating and operating affordable and low income housing in both the City and County of Walla Walla. The Walla Walla Housing Authority has managed projects in the past and could facilitate the lengthy application process, a process that could easily take 3-4 years and includes researching environmental impact and architectural designs.

Lariat Gardens, low income building project

As an additional note, even when utilizing grant funding, not all built housing is required to be set aside for residents of a particular income range. The Federal Tax credit program, a key leveraging program for affordable housing, requires that either ≥20% of units are occupied by households with an income of ≤50% of Area Median Income (or $29,050 in 2015) or ≥40% of units are occupied by households with an income of ≤60% of Area Median Income (or $34,800 in 2015). By creating units with a range of prices, the result of the building project can be a fiscal net positive and encourage additional growth.

Rental Vouchers

The approach outlined above, even if expedited, could last at least three years before construction. As an alternative, a rental voucher program could have more immediate results and could utilize all or part of the ballot funds or act as intermediate step while building projects are completed.

A rental voucher program could be similar to the Section 8 program or of the County’s own design. One model for this type of program is a subsidy model that creates fixed subsidies for renters. With this type of program, the County could target any group that it deems in need, such as working blue collar households, a group that is often disqualified from low-income programs while unable to find affordable housing options. Such a program could target those making between 40-60% of Area Median Income (AMI) and provide rental assistance. For example, if an average household in the 60% Area Median Income income band makes about $35,000, 30% (or $875/month) of their income would go toward housing.  A local voucher program could provide a flat subsidy of $400, instead of scaling aid by analyzing utility costs and other factors, which would reduce operating costs.

Rental vouchers cut back on administrative burden but an issue is that landlords are not required to accept rent-support vouchers.  While cities like Seattle and Spokane have required landlords to accept rental vouchers, there is no state or federal law prohibiting denying a renter because they are a Section 8 voucher user. 

Conclusion

While there are arguments of different types of aid, it is crucial to understand what the County is considering implementing with our tax dollars. If money is raised from an Affordable Housing ballot measure, significant developments can be made with time and planning by our local government.