Affordable housing project hinges on availability of tax credits

The Seattle-based Low Income Housing Institute is still interested in building affordable housing in Aberdeen or Hoquiam, but the timing hinges on the availability of federal tax credits, according to executive director Sharon Lee.

The state Department of Commerce has available funding that would also be helpful. “We will have a regular appropriation of about $10 million, and another $7 million to $8 million on top of that,” said Corina Grigoras, managing director of the Department of Commerce’s housing trust fund. “And we also received in the capital budget a set-aside of $10 million for people displaced by natural disaster.”

That would put the Low Income Housing Institute in a favorable position to apply for the funds over the summer, but Lee said unless federal tax credits are available this year it could be be 2020 before all the funds would be made available. The project, to be funded, requires tax credits. Lee said a decision will be made soon on the availability of tax credits, which offer developers reduced tax rates or provide tax exemptions for affordable housing projects.

Talks between Lee and the cities of Aberdeen and Hoquiam began last year, and the Low Income Housing Institute’s board voted to move forward with a development in the area. Since then, Lee has been working with the cities, the counties and the state to find an appropriate property for a low income housing development.

“The board did vote to acquire property and build affordable housing (in Grays Harbor County), so we are working very hard at making that happen,” said Lee.

Aside from funding, the fact that so many available properties in the region are in the flood plain has complicated the process, said Lee.

Late in March, Lee traveled to Washington, D.C., to speak with Congressman Derek Kilmer and senators Maria Cantwell and Patty Murray to speak out against proposed cuts to the federal Housing and Urban Development department, which offers grants and other incentives to promote the development of affordable housing. The following week, Cantwell was able to put a provision into the omnibus spending deal increasing the Low Income Housing Tax Credit by more than 12 percent, the first increase in the rate in more than a decade. Since its creation 30 years ago, the low income housing tax credit has financed nearly 3 million homes across the United States, leveraging more than $100 billion in private investment. Between 1986 and 2013, more than 13.3 million people have lived in homes financed by the tax credit, which provides incentive for private developers to invest in low-income housing units.

Hoquiam Mayor Jasmine Dickhoff said “people desperately need” affordable housing in the county, and she is working closely with Lee and others to make it happen. Hoquiam City Administrator Brian Shay added, “I believe there is lots of support for LIHI building something similar to (the Billy Frank Jr. Place building in Olympia). It is my understanding that they might be making an offer to purchase property soon, but that they would need to line up funding for construction.”

The Billy Frank Jr. Place building recently opened on State Street in downtown Olympia. It features 43 units of affordable housing and serves homeless veterans, homeless young adults, disabled individuals and more. It is named after the Native American environmental leader and treaty rights activist, who was a member of the Nisqually Tribe and was awarded the Presidential Medal of Freedom in 2015, a year after his passing.