The Metropolitan King County Council last week provided the immediate extension of credit to projects that preserve living-wage and low-income housing throughout the county. By doubling the authority of the county’s Credit Enhancement Program, at no cost to taxpayers, the Council provides immediate backing for the purchase and preservation of the Wonderland Estates mobile home park near Renton, the Springwood Apartments in Kent, the Lora Lake Apartments in Burien, and other potential projects.
“The challenge of keeping working wage housing in King County means crafting creative solutions,” said Councilmember Larry Gossett, prime sponsor of the legislation. “The Credit Enhancement Program allows us to partner with developers who are already building units to ensure that low-income residents are not forced out of our largest cities.”
The ordinance adopted by the Council doubles the authority of the Credit Enhancement Program from $100 million to $200 million, which over the next 5 years is expected to help develop or preserve 500 to 800 affordable units in six to ten housing developments.
“This program guarantees that living wage units will be available within King County,” said Council Chair Julia Patterson. “Far too many families are being pushed away from the services they need to make that next step. Ensuring that developers will continue to build these units within our urban corridors helps everyone.”
“The increasing cost of land, construction, and complex regulations have made housing affordability a top issue in this county,” said Councilmember Reagan Dunn, whose district includes the Wonderland Estates Mobile Home Park. “I am committed to helping residents, particularly seniors and those with low incomes, keep their homes in these challenging economic times.”
Adopted by the County Council in 1997, the Credit Enhancement Program helps develop affordable housing through contingent loan agreements that reduce the costs of financing. In exchange, the project developer/owner agrees to provide long-term affordable units within the project. The program is backed by the County’s Housing Opportunity Fund and is administered by the Community Services Division of the County’s Department of Community and Human Services.
When a project is approved for credit enhancement, the County enters a contingent loan agreement and commits loan funds to the project for debt servicing should an operating shortfall occur. The contingent loan agreement committing King County’s resources, should they be necessary, reduces the interest rates for bond financed projects. The interest savings are then reinvested in the project to provide below-market housing units. The owner commits to rent or sell affordable units to low- or moderate-income households of a specific income.
To date, all projects that have received King County credit enhancement are financially performing as projected or are exceeding expectations. Those projects include the Woodridge Park Apartments in Tukwila’s Riverton Heights neighborhood, the Ellsworth House Apartments on Mercer Island, and the Greenbridge HOPE VI Seola Crossing complex in White Center.
“We have been able to preserve desperately needed affordable housing on the Eastside because of the King County credit enhancement program,” said St. Andrews Housing Group Executive Director Mike Nielsen. “We could have lost the opportunity to preserve 109 units in two projects. Without this help these units would have been lost to market developers and ended up being priced out of reach for the average person. One of these projects, Ellsworth House on Mercer Island, was the only subsidized housing in that community. It serves low-income seniors, many of whom have lived most of their lives locally and just want to be able to live out the balance of their lives in the only community they have ever known. The credit enhancement program made this wonderful senior community possible.”
“This partnership with the King County Executive and the Council makes much of what we do possible,” said Stephen Norman, executive director of the King County Housing Authority. “Whether it’s building Greenbridge, saving the Wonderland Estates mobile home park or revitalizing our public housing communities, this program saves hundreds of thousands of dollars on average per project at no cost to the taxpayers.”