These new homes are first in Pierce County to be ‘permanently affordable’ under new model
As home sales rise in Pierce County, lower income families are finding it harder to find a place to live.
One development in South Tacoma is trying something new to keep homes affordably priced in perpetuity.
The four homes in the Fern Hill neighborhood along South 88th Street are being developed by Tacoma/Pierce County Habitat for Humanity through a homeownership model called “restricted resale.”
Under the model, which is similar to a community land trust, the homeowner buys the house, but Habitat retains ownership of the land. The land is leased by the homeowners from Habitat in a long-term and inheritable lease, typically a 99-year term.
In exchange for below-market prices, the homeowner agrees to sell the home at a restricted price when they decide to move, ensuring its affordability.
“These will always be able to go to first-time families that are looking to start a family and get into homeownership for the first time,” said Sherrana Kildun, chief development officer for Habitat. “We’re the first resale restricted model here in Tacoma/Pierce County to sell our homes in this way, so we’re really excited about it.”
The development consists of a 2-bedroom house, a 3-bedroom house, a 4-bedroom house and a 5-bedroom house that will go to moderate- to low-income families. The homes already have families lined up to move in when the site is completed, which is expected to be in six months, Kildun said. Habitat aims to build more houses in the future, and families are found through applications or referrals from other organizations.
Homeowners who are part of the program make no more than 80 percent of area median income, Kildun said, which for a family of four equates to about $72,000 a year.
“The cost to buy a home these days in our community is so extreme that Tacoma Habitat and organizations like ours are some of the only places that moderate-income families can come to purchase a home and step into homeownership,” Kildun said.
The new homeownership model comes at a time that housing prices are high in Pierce County.
In the final weeks of 2021, Pierce County saw continued tight inventory and higher prices for home sales, reported The News Tribune’s Debbie Cockrell earlier this month. In Pierce County, the median closed sale price for existing single-family homes was at $520,000 in December, up from November’s $515,000 and up 18.45 percent from the same period in 2020. That compares with King County at $810,000 and Snohomish County at $700,000, the only two county markets higher priced than Pierce.
The Habitat development drew the attention of U.S. Rep. Derek Kilmer, who visited the property last week. Kilmer, a Democrat, represents Washington’s 6th Congressional District, which includes parts of Tacoma.
“We know we’ve had some challenges related to housing affordability even before the pandemic, and those challenges have been exacerbated by the pandemic,” Kilmer said.
In May 2021, Kilmer and U.S. Rep. Trey Hollingsworth, a Republican from Indiana, introduced the Yes In My Backyard Act, or YIMBY Act, which is meant to remove barriers to developing affordable housing. The act would require local governments applying to federal housing development funds through the Community Development Block Grant (CDBG) to track and report on the implementation of land-use policies that promote housing production, such as enacting high-density single-family and multifamily zoning, addressing height limitations and encouraging and reducing minimum lot size.
“What the YIMBY Act does is that it asks those communities that are participating in that program to detail how they’re removing some of the barriers to affordable housing development. Looking at everything from zoning to heights to enabling things like ADUs (accessory dwelling units)… are all things that promote more affordable housing,” Kilmer said.
For 2022, the budget bill passed by the House provides $56.5 billion for the U.S. Department of Housing and Urban Development (HUD), an increase of $6.8 billion compared to 2021. House and Senate Appropriations Committee leaders are currently working to find agreement on a final bill for FY22.
Right now, the bill increases funding in 2022 for programs that benefit Pierce County, including the CDBG program. The House passed the bill with an increase of $265 million for CDBG compared to 2021 for a total of $3.7 billion.
Two other federal programs that benefit affordable housing and down-payment assistance in the Pierce County area include the HOME Investment Partnerships Program and the Self-Help Homeownership Opportunity Program (SHOP), both of which also see increases in the 2022 budget.
Kilmer hopes that two other projects in Tacoma will receive funding through a final fiscal bill, including $3 million for the Tacoma Housing Authority’s Hilltop Housing and Commercial project to begin redeveloping three parcels of land for a 200-unit affordable housing project and $1.5 million for the Hilltop Attainable Housing and Businesses Development project, which aims to ensure that residential and business spaces will be attainable to community residents and BIPOC-owned businesses on Hilltop.
This story was originally published February 1, 2022 at 5:00 AM.
