A Pierce County agency is selling all of its public housing. What happens to the tenants?
Jamie Green-Tobin moved into public housing in south Tacoma more than a decade ago following a long, tireless search for a bigger life than her family’s two-bedroom apartment could offer.
Unmarried and a full-time student at the time, Green-Tobin first had to sit on a Pierce County Housing Authority wait list for 18 months, calling every week to check for an opportunity to upgrade her living arrangement with her two young children. The moment finally arrived when two properties became available. She jumped at the chance to lease a three-bedroom place owned by the PCHA near Spanaway Lake High School.
Recently, Green-Tobin, 44, was presented with a new choice: If she could afford it, did she want to buy her home? It was a tougher decision, requiring marital conversations about finances and increasing interest rates. She and her husband ultimately purchased the house in July.
“I’m glad I’m not renting anymore, personally,” she said. “I feel like I started from the bottom, and I worked my way up to the top.”
Until she acquired the property, hers was one of 124 public housing units owned by the authority in scattered locations across the county, predominantly in Spanaway and Parkland. If all goes as planned, the PCHA won’t own any of them for much longer.
The housing authority has embarked on a strategy to sell its entire inventory of low-income public housing over the next three years in a long-awaited move that PCHA officials say is necessary to modernize the agency. Most importantly, shedding the portfolio of 120 single-family homes and two duplex units will generate funds to increase severely lacking affordable housing in the region, PCHA officials said.
There exists a $624 million funding gap to fully meet the housing needs of the lowest-income residents in the county, which would require producing more than 2,300 affordable units each year through 2044, according to a September 2022 report authored by Pierce County-commissioned consultant, BERK.
The housing authority’s plan is complex but, broadly, it calls for unloading all public housing from its books and using the estimated $43 million in proceeds to co-develop 150 new Section 8 multifamily apartment units. Leveraging other funding and grants alongside those proceeds, the PCHA said it could potentially raise an additional $200 million to put toward even more affordable housing.
Riley Guerrero, PCHA’s planning, policy and community engagement manager, said it’d been more than 20 years since the housing authority acquired or developed new units, to the best of her knowledge.
Public housing tenants will have two options as their homes are sold. They can buy like Green-Tobin did, although the vast majority aren’t expected to be able to do so. Otherwise, they must relocate to a private property using vouchers issued to them to preserve their subsidy. The housing authority said it expects to direct $3 million from sales proceeds to cover tenant moving expenses, and it has guaranteed that no resident will face a financial burden because of the sales.
PCHA officials said they were transparent with tenants about the plan, including through meetings and an open-comment period, so no one would be caught off guard.
“We’re not looking at putting anything up for part two, which is the sale, until part one — which is relocation or vacation or vacancy of the property —- is done,” Guerrero said.
Decision to sell now
The transition, known in public housing circles as “repositioning,” comes as officials say holding onto the inventory runs counter to their goal of being efficient with limited public resources. While the PCHA homes — which are generally much less expensive than other homes on the market — remain in good repair, they’re expensive to maintain.
Federal legislation in 1999 capped public housing’s growth, effectively removing it as a long-term strategy, and funding for the program has declined through the United States Department of Housing and Urban Development (HUD), which oversees it.
PCHA’s housing stock was acquired decades ago, primarily in the 1980s and partially in the 1990s, according to Guerrero, who noted that she could only guess that they were obtained some time after the agency split off from the Tacoma Housing Authority in 1980.
“It’s a bit outside of our agency’s living memory, to be honest with you,” she said.
For years, HUD has incentivized housing authorities to shift away from low-income public housing — an outdated model most synonymous with high-rise apartments such as Chicago’s infamous Cabrini-Green Homes — to a voucher-based system where recipients receive aid to rent on the private market.
After kicking around the idea for a decade, the housing authority said it saw now as an ideal time to finally divest from its properties, believing that the current real estate market could support the home sales and the construction of new affordable housing.
“I think that they’re right in their analysis that owning a whole bunch of single-family homes scattered across the county is not a good investment in federal dollars,” said David Galazin, chairman of the Tacoma Democratic Socialists of America’s Housing Justice Committee, adding that most other housing authorities have already modernized in this way.
Galazin said the authority’s plan would allow it to essentially “double dip” by receiving vouchers for all existing public housing tenants to move into private properties plus money needed to develop affordable housing.
“I like their big picture view of this,” he said, “and I hope they will do everything that’s possible to be sure that every one of the tenants lands on their feet and has some choice in where they land.”
HUD approved the housing authority’s plan to sell its public housing portfolio in January and provided PCHA with enough “tenant-protection vouchers” in May to relocate all existing public housing participants.
As they move forward, PCHA officials will attempt to walk a fine line between expansion and preservation. They said they will seek to keep as many homes sold as possible in the hands of low-income residents while also generating the necessary revenue for new affordable housing.
“We’re doing it the hard way, but it’s the right way,” PCHA executive director Jim Stretz said.
Priority buyers, necessary funds
Before Regina Johnson entered PCHA-owned housing in Spanaway about five years ago, “I was desperate, I didn’t have a lot of people to go to,” she said.
Johnson, 39, who’d been on a waiting list for four or five years, found the three-bedroom home to be “perfect” — a far cry from the instability of having to sleep in a car with her four children at the time.
Every year, Johnson said she’d hear that PCHA’s public housing homes, including her own, would be sold. The housing authority eventually suggested that she work on improving her credit to secure the best-possible place for her family to move. So she did. With assistance from one of two PCHA relocation specialists, her family relocated with a tenant-protection voucher in July into a larger, four-bedroom private dwelling in Spanaway.
“I was not worried. I was already packed,” she said, adding that her new home was better than her old one.
Although Johnson didn’t buy her former place from the housing authority, she was among a group the agency has said it most prefers to sell to. As the authority disposes of its homes, families who reside in them will be offered the first opportunity to purchase.
“We’re hopeful for a lot of them, but we don’t know at this point how many will pull it out,” Guerrero said.
Participants in PCHA’s Family Self Sufficiency program are up next on the priority list, followed by nonprofits that demonstrate that they’ll keep the homes affordable in perpetuity. After that, once properties inevitably wind up going to public bid, the PCHA said it’d prioritize certain buyers first, including would-be new homeowners and people using financing packages such as through Veterans Affairs.
All the while, the authority said it will be mindful of price. HUD has stipulated that the PCHA sell the homes for at least 80% of their appraised value, but that doesn’t mean the authority will drop asking prices to the floor so tenants can buy them.
Guerrero said the PCHA has taken note of strategies enacted by other housing authorities. Some have moved homes without concern for who the buyers were when the real estate market was hot. Others have sold homes for very little money as a social good.
“We’re kind of trying to walk a very mean, middle road,” she said.
The PCHA will consider each sale on a case-by-case basis to be conscientious of what public housing tenants can afford but, in general, it will attempt to sell at appraised values to ensure the viability of new affordable housing projects reliant on that revenue.
“We want to do that, while also preserving social good,” Guerrero said. “And that’s a much more rigorous, and time-consuming, and staff-consuming process to try and do, which is why it has not necessarily been the popular option.”
Twenty homes have been sold or vacated as of Friday. Nine were under contract with the housing-focused nonprofit Habitat for Humanity, three were bought by public housing tenants, one was purchased on the public market and seven others were being made ready for sale.
When all is said and done, only five to 10 homes are expected to be bought by public housing participants and 60 to 80 by a nonprofit, leaving a remaining 30 to 50 to go to public bid, according to the housing authority’s rough projections.
Despite the small portion of homes anticipated to be retained by existing tenants, Green-Tobin, who acquired her home for $10,000 less than what the housing authority had been seeking, said she didn’t think she could have bought under any other circumstances.
“I want to say ‘no’ because the way the housing market is,” Green-Tobin said. “So when people who are actually on a budget, like me, I wouldn’t be able to do that.”
In January, the PCHA sent out a survey to public housing residents that asked when they’d most like to relocate. Guerrero said many were eager to leave this past summer and others wished to first save money before moving. Some were fond of their homes, however, and wanted to delay relocation as late as possible.
The housing authority won’t keep hold of any homes only to accommodate a few households who prefer to stay, Guerrero said, but it will push those tenants to the end of the sale timeline.
‘Doing things differently’
The process to develop new affordable housing as planned is admittedly complicated, PCHA officials said. Under a HUD program called Rental Assistance Demonstration (RAD), the housing authority can build public housing units and convert them to RAD, which is Section 8. Tenants would pay roughly 30% of their income for rent, with HUD subsidizing the remainder of the fair-market rental value to the PCHA.
The housing authority would own the units but, unlike with public housing, it’d be a private -- not public -- landlord. Also dissimilar to public housing, vouchers would pay the subsidy. RAD vouchers, which last for up to 20 years before needing to be renewed, act differently than a traditional Housing Choice Voucher: They apply specifically to the RAD unit and wouldn’t transfer with the tenant if the tenant were to move.
The PCHA currently doesn’t have any RAD units because it has never had the money to build them.
It’s expected that the authority will look to develop 40- to 120-unit projects with home sales proceeds, wanting to ensure that projects aren’t too big because that could be unwieldy for a relatively small agency but also not too small or else it’d resemble the scattered-site model that the PCHA is seeking to move away from, Guerrero said.
The authority is planning to issue a formal call, known as a request for proposal, for developers to jointly create the housing projects and bring ideas that’d include site recommendations, according to Stretz. He acknowledged that the staggered pace of the home sales created challenges in trying to plan development because officials don’t know how quickly homes will sell or how quickly revenues will show up.
But Guerrero said that the PCHA wanted to start early on projects, be nimble and actively spend money, as opposed to first waiting on all of the proceeds to arrive.
The creation of new affordable housing could also lead to more, both said. Vouchers can attract developers and additional subsidies, bringing in new financing opportunities such as tax credits and acting as a self-generating movement. It’s not a new strategy among housing authorities and Guerrero likened it to trying to get on an already-rolling competitive train.
Galazin said that it was key that housing authorities don’t allow available subsidies to flow into the private market and that by being in the business of developing and owning housing, authorities can keep more dollars in the community they serve.
The PCHA’s board was motivated to set up the authority in a better future position, in part, following internal restructuring over the past few years, exiting the worst of the COVID-19 pandemic and moving on from a situation with its ex-finance director, who was sentenced to more than four years in prison in 2021 after stealing nearly $7 million from the authority.
“At Pierce County Housing Authority, we know our past and we know that we have not lived up to the expectations that we set for ourselves or that the community has set for us,” Guerrero said. “And we want to prove to the county through our actions that we are doing things differently.”
