Revolving Fund for Transit-Oriented Development In the Works
The PSRC, city, and county are working on a revolving fund to help pay for affordable housing at transit centers.
City Council member Mike O'Brien tells PubliCola that he's interested in a proposal, which the city, state, and Puget Sound Regional Council are working on, to create a special, $25 million revolving regional loan fund to allow developers to buy up land near transit stations (including all "rapid transit" stops, such as light rail, bus-rapid transit, and streetcar stops) as it becomes available and sell it to nonprofit affordable housing developers when they're ready to develop it. The council is working on a resolution to support the idea.
Of that $25 million, O'Brien says, about $5 million would come from local sources (city, county, and possibly state Department of Transportation funding and leverage national funding "that would allow us to go out and start acquiring some of the land for affordable and mixed-income housing near transit sites in the future.")
The fund would be replenished by developers when they get the funding together to repay the loans; each loan would last between five and ten years, according to the Puget Sound Regional Council, which has a committee working on the plan.
Currently, O'Brien says, land tends to get snatched up by market-rate developers or increase in price before affordable housing developers can get the money and permits together to buy it.
"If you’re a nonprofit housing developer, you have to go out and piece together like 17 different sources of funding and all the different regulations that go with that," O'Brien says. "Having this flexible pool of money so that when the land becomes available, we can snap it up and hold it gives the other developers time to secure their funds and then they pay into the loan."
Puget Sound Regional Council principal planner Michael Hubner says the "concept is to identify sites thate have a lot of potential but are at risk of having the market pressure driving their price up beyond that which affordable housing developers can acquire or they’re complex to secure funding for. When the funding for the rest of the development is secured, most affordable housing projects are made possible through different financing sources, those funds go back into the [revolving] fund and that money becomes available to somebody else."
Hubner says the plan, which has been in the works for several years but on which a stakeholder group did the "heavy lift" last year, would be administered by "a third party," likekly a nonprofit or other financing institution.
Housing Development Consortium outreach coordinator Stephanie Velasco says the HDC, which advocates on behalf of nonprofit housing developers, says the group "doesn't have a specific position" on the TOD idea, but that "generally we’re supportive of policies that encourage the development of affordable housing near transit."
Murray spokesman Jeff Reading says the mayor's housing strategy "is really still under development, so there’s not much to share at this point." He adds, "The approach will be similar to the approach the Mayor took to the minimum wage debate: convening a group of stakeholders to help pull together a set of recommendations that the Mayor could then use to craft a proposal to Council. It is definitely the Mayor’s intention to work closely with Council in general – and CM O’Brien in particular – each step of the way."
O'Brien says the money for the fund could come from the state Department of Transportation—where, he says, "there is definitely new leadership between the governor [Jay Inslee] and [WSDOT director] Lynne Peterson" aimed at pushing more transit-oriented development in the region.