SEATTLE — King County is one step closer to tapping a new funding source for much-needed affordable housing. But many steps remain.
The Metropolitan King County Council voted 8-1 Tuesday to study the possibility of taking on new debt to fund mixed-income housing. Sponsored by Councilmember Girmay Zahilay, the motion directs the county executive’s office to develop a plan for a “regional workforce housing initiative” to tap at least $1 billion in county debt to fund moderately priced housing.
The plan and legislation to implement it are due in June. Councilmember Reagan Dunn voted no.
“The housing crisis is forcing too many people into the impossible position of living farther and farther away from work,” Zahilay said Tuesday.
The proposal would fund a novel type of mixed-income housing affordable to people making a range of incomes. Supporters envision housing serving people making between 50% and 120% of area median income. That amounts to incomes between $53,000 and $126,500 for a single person or between $68,000 and $163,000 for a family of three. The county would use rents from the housing to repay the bond debt. If rents were insufficient to cover the costs of repaying the debt, the county could be forced to tap the general fund.
By mixing incomes, the proposal echoes the idea of social housing, in which the rents paid by higher-income renters subsidize lower costs for renters who earn less. Seattle voters last year approved the creation of a new development authority to build social housing, and early next year voters will weigh a proposal to create a new business tax to fund that housing. The county motion would explore a similar idea without creating a new development authority.
The motion asks the executive’s office to recommend partnerships with affordable housing developers to build the housing, though it’s unclear how many homes the new money could fund.
The idea comes as the region faces a dire shortage of homes for rent and for sale. King County is expected to need nearly 340,000 new homes over the next two decades at various income levels. However, to meet the growing need, county projections show more than half of those homes should be affordable for people making less than half of the area median income, likely requiring more subsidies than what the bonding proposal would offer.
To access funding for the new program, the county would tap its bonding capacity. Washington counties can take on a certain level of debt but also face limits on raising taxes to bring in more revenue and pay off that debt. Because of that, the county, with about $9 billion in unused debt capacity, can take on more debt.
But how to repay that debt is also a concern.
In a committee meeting late last month, Councilmember Claudia Balducci pointed out that affordable housing providers across the region are struggling with rising operations costs and declining rent collections, endangering their budgets.
“We are seeing that rents are an unstable and currently problematic line of funding,” Balducci said.
Balducci said the county should explore the idea of bonding to build housing, but committing with certainty to the plan before studying it further would be “reckless,” she said.
Zahilay emphasized last month that his motion was still early-stage planning, not locking the county into issuing the debt. The council would need to vote again later to make the program a reality.
