Affordable housing is a top concern for Pierce County. Why has so little been built?
More than 10 years ago, the Pierce County Council passed rules meant to increase the construction of affordable housing across the unincorporated areas of the county.
Between 2010 and 2019, 682 units — 4.5 percent of development — added in unincorporated Pierce County were deemed affordable, according to a 2019 independent report.
Some researchers and consultants say they are not surprised that so few affordable units have been added. They contend incentives like expedited permit processing and fee waivers do little to spawn the type of increases in supply needed to address the county’s affordable housing crisis.
A 2020 University of Washington Tacoma report concluded that developers aren’t using incentives because they are inconsistent and limited.
“Lack of adequate financial resources, including fee waivers, and complexity of the existing codes (for example, in Pierce County) are major obstacles to their utilization,” the University of Washington Tacoma report said. “As a result, it is rare to find affordable housing projects that have used local resources during their development.”
Researchers also point out that not much public money has been allocated to address affordable housing. Without such investment, the UWT report said, the current fee waivers are simply not enticing enough to attract for-profit and nonprofit developers.
County Executive Bruce Dammeier acknowledged the shortcomings of previous legislation and told The News Tribune a more regional, focused board would provide the government support needed to create more housing options.
Dammeier and Tacoma Mayor Victoria Woodards have high hopes for the new affordable housing board, South Sound Housing Affordability Partners (SSHAP).
The board is made up of elected officials from 14 jurisdictions with no taxing or ruling authority. SSHAP is designed to encourage jurisdictions to work together in addressing the escalating costs of rent and home prices. The board held its first meeting Oct. 18.
The board aims to tackle rising housing costs through a regional solution.
“We are starting to demonstrate that we want to work together to make things happen,” Dammeier said.
Pierce County’s attempts
There has been a dire need for more housing accessible to lower income residents.
In the past decade, Pierce County median home sales prices have increased 108 percent, and rental rates have increased 78 percent, outpacing the 10 percent increases in median household income, according to county documents.
Pierce County also has seen a surge in population. In the newest data collected by the U.S. Census Bureau last year, Pierce County’s population grew from 795,628 residents in 2010 to 921,130 in 2020, a 15.7 percent increase.
“We have a supply-and-demand basic problem,” Pierce County Council Chairman Derek Young (D-Gig Harbor) said. “It’s really hard to deal with the housing shortage without a lot of displacement. That’s what we’re facing. So if we’re not willing to make some investments directly to buy land to help build, we’re not going to get there.”
Affordable housing is intended for households with incomes 80 percent of the county area median income (AMI), or less than $50,900 for a single-person household. Pierce County defines affordable housing as housing for which a household does not pay more than 30 percent of its gross income for housing costs.
In 2010, Pierce County passed a package of affordable housing incentives for developers. Those incentives included expedited permitting, fee waivers for building permits and impact fees, and alternative development standards. The county also offered relaxed regulatory standards like bonus housing units, less strict parking standards, reductions in park and open space requirements and reduced lot dimensional standards, according to council spokesperson Brynn Grimley.
The program was intended to encourage both nonprofits and market-rate housing developers to build more affordable housing options.
According to an independent county-commissioned report by Seattle’s BERK Consulting, such efforts produced four affordable housing complexes from 2010 to 2019: 30 units at the Woods at Golden Given near Tacoma; 220 units at the Copper Valley Apartments near Puyallup; 216 units at the South Hill Vintage Apartments; and 216 units at the Gateway Apartments in Spanaway.
“All four projects are affordable housing developments where 100 percent of units are reserved for low-income households,” the BERK report said.
While unlikely that the incentives were a deciding factor in any of the four projects moving forward, the report said, the density bonuses allowed for the construction of 116 additional affordable units that would not have been permitted under standard zoning.
County funding
Outside of federal COVID-19 dollars, there are two sources of local funds to support affordable housing development in Pierce County. In 2020, there was $1.2 million collected from a document-recording fee earmarked for affordable housing and $1.1 million from the Affordable Housing Sales Tax Fund. In 2019, the state Legislature voted to allow jurisdictions to keep a portion of the sales tax collected within their boundaries — .0146 percent of the state’s 6.5 percent sales tax — for affordable housing.
Both the university and independent reports concluded that is not adequate funding for the need across Pierce County.
“Fee waivers are an important provision of the incentives, however a lack of funding allocated to these waivers has significantly reduced the value provided to developers that include affordable units in their projects,” the BERK report said.
The city of Vancouver, Washington, came to the same conclusion and created an entire fund for affordable housing development.
Vancouver residents passed a property tax in 2016 to collect $46 million over seven years for an Affordable Housing Fund. Since the fund’s inception, Economic Development director Patrick Quinton told The News Tribune, it has funded 44 affordable housing projects. Vancouver accepts affordable housing proposals from developers for partial financial assistance.
“We know our partners get state or federal and philanthropic money, but there is always a project funding gap. So this helps fill those gaps,” Quinton said. ”We are some of the most flexible sources of funding for affordable housing and can make projects happen that might not have otherwise happened.”
Some members of the Pierce County Council would like to create an affordable housing development fund. The fund would collect the recording fees, retained sales taxes, grants and any federal COVID-19 dollars for permanent housing and accept proposals from developers, Young said.
Developers previously told The News Tribune the current incentives were not enough local dollars or funds without many requirements on construction or residents to help spur affordable housing.
Mercy Housing Management Group’s vice president Kevin Weishaar and Spencer Anderson, president of Washington Affordable Housing Management Association, said there are so few dollars for affordable housing at the state and federal level, the competition is steep.
“A lot of projects that could absolutely have gotten built or rehabbed don’t because they don’t win the bid for the funding,” Anderson said.
Vancouver’s Quinton said the city has helped fund developers’ proposals for apartments, townhouses and tiny homes through flexible dollars. The fund provides public finances for new development, preserves existing affordable housing, encourages landlords to convert units to become affordable, and offers rent vouchers and temporary shelter funding.
“A lot of developers say the existing pots of funding are restrictive, so it pushed projects in different directions,” Quinton said. “A subset of these funded projects probably wouldn’t have happened without us.”
The researchers in both the university and independent studies said without adequate funding, the county is left with two tools: providing surplus public land for affordable housing development or changing zoning regulations to allow for more density, neither of which the county has done.
“Furthermore, the ability to use surplus land for affordable housing remains largely untapped,” the university report said.
“It is likely that Pierce County owns surplus or underutilized lands that may be suitable for affordable housing development,” the BERK report said.
Pierce County approved a two-year budget on Nov. 23 with the biggest housing and homelessness allotments ever. The $253 million include funds for a Housing and Homelessness Fund, a village of microhomes and mobile homes, and selling public land.
The county government owns 11 parcels on Tacoma Avenue. Part of the budget includes planning to sell these properties, and Young wants to see mixed-use development of businesses on the ground floor and affordable housing above.
“It’s important to get this done this year. We have to be good neighbors to Tacoma,” Young said.
The Pierce County Comprehensive Plan adopted in October included a housing plan with a target of 28,270 new housing units in unincorporated urban areas and 9,503 in rural areas of the County over a 20-year period. The plan does not earmark a specific number of units for affordable housing, but states that it is important for the county to promote zoning and planning for less expensive housing options.
Cities’ programs
During the same time frame when Pierce County build 682 affordable housing units, Tacoma’s affordability rate was nearly four times higher as a percentage. Of the 5,651 multifamily units added from 2010 to 2019, 964 units — or 17 percent — were deemed affordable, according to data from the City of Tacoma. Less than 3.8 percent of single family homes were found to be affordable.
Since 2018, Tacoma has adopted 12 bills to encourage affordable housing, according to the City of Tacoma. That includes property-tax exemptions for multi-family housing with affordable units, adding a one-tenth of 1 percent sales tax for an affordable housing fund, and policies to reduce inequities, disparities or discrimination to under-represented communities.
Tacoma also allocates an additional $1 million in Affordable Housing Sales Tax and $1.2 million in its two-year budget.
More affordable housing is on its way in Tacoma.
Since 2020, 3,195 units have been built, 16.4 percent of which has been deemed affordable by the City of Tacoma. Between 2021 and 2024, 590 additional affordable housing units are expected to be completed, the City of Tacoma said.
The UW report places faith in the Home In Tacoma program that looks to diversify housing options across the city. The proposal leverages land-use regulations to encourage construction of more types of housing like duplexes and townhomes. The Tacoma City Council looked at a first reading of the proposal this week.
Other Pierce County cities and towns may have incentives in their codes, but they too have not been as successful in addressing the affordable housing shortage.
“The basic message from all jurisdictions is that even when they have some incentives and programs in place, they are rarely used,” the university report said.
Many of the jurisdictions in Pierce County are too small to focus on affordable housing policies, the university report said.
The Cities of Fircrest, Carbonado, and Roy told researchers they did not focus on affordable housing and the cities of Eatonville, Fife, Orting, Steilacoom, Buckley, Ruston, Wilkeson, and Milton do not have any incentives or programs that encourage affordable housing development. Bonney Lake does not have anything specific other than a desire and a plan to take some steps toward having more policy tools.
Tacoma, Lakewood and Edgewood have planning tools such as inclusionary zoning and development bonuses in targeted areas, and multifamily tax exemptions can be found in Sumner, University Place, Puyallup, Auburn, Lakewood and Tacoma.
The report said DuPont, Puyallup and Tacoma also offer parking, heightand density bonuses for affordable housing projects.
“It is clear from our surveys that a small number of cities in the County have developed or are developing more complex policies and programs to encourage affordable housing units in their jurisdictions. However, others have limited tools or none at all,” the university report said.
Proposed solutions
The University of Washington Tacoma report summarizes that housing policy should be the top priority for jurisdictions.
“Without thoughtful housing policies, achieving success in other policy arenas is at best challenging,” the report said. “Failing to prioritize housing will perpetuate and accentuate current inequities.”
The independent consultants, BERK, said “a relative lack of funding available for affordable housing development in Pierce County, paired with limited coordination amongst local agencies on funding strategies …” reduces opportunities for affordable housing.
Dammeier and Woodards hope to combat the issue through the creation of SHHAP.
Dammeier told The News Tribune that there isn’t a single strategy that will solve the affordability crisis, but the new board would be a key driver in alleviating the escalating costs of housing. The board’s three-pronged approach includes lobbying Olympia for more housing action, pushing for more state grants to reach Pierce County and starting at least three housing projects by the end of next year.
“It is about getting more money, but using the existing money more effectively,” Dammeier said of the SHHAP board. “There’s not a silver bullet or a single strategy that will solve this or help us, and I do think SHHAP is going to be one of the key instigators and drivers of this.”
He believes that more diverse housing options need to be part of the solution.
“We’ve got to be willing to change how we look at things in order to get more affordable housing. That means that those new housing options don’t necessarily look like your standard set subdivision with 2,500- or 3,000-square-foot homes,” he said.
Some are hoping the big housing and homelessness allotments pushed through by Young and Dammeier will help bridge the gap of need.
“We need to take strong and bold action now to address this. Having people live on the streets in squalor in Tacoma, Lakewood and throughout Pierce County is not okay. It’s not good for them, and it’s not good for our community,” Dammeier said. “I strongly believe that we should be investing significant amounts of money into affordable housing.”
This story was originally published December 3, 2021 at 5:00 AM.
