‘Bold’ $4 billion housing initiative proposed to address Washington’s housing crisis
Senate Housing Committee members discussed a $4 billion Washington housing initiative on Wednesday during a public hearing for Senate Bill 5202.
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SB 5202 aims to reduce homelessness in Washington through capital expenditures for programs that address housing insecurity. Committee staffer Melissa Van Gorkom said the state Finance Committee would be authorized to issue up to $4 billion in general obligation bonds to finance capital projects and programs that address housing insecurity. The initiative would need approval from lawmakers and the public.
“The secretary of state must submit the bond authorization to the people for their adoption or rejection at the next general election,” Van Gorkom said. “If the majority of voters approve the referendum, these bonds would be issued outside of the constitutional debt limit.”
Sen. Yasmin Trudeau (D-Tacoma) sponsored the bill. She said it has personal significance to her.
“I have family across the income spectrum, some that are ready to buy homes, some that are on low-income housing supports, and nobody can find housing to meet their needs,” Trudeau said. “There’s a lot of pieces to this that I’ve heard [about] in my caucus and from folks across the aisle. I believe if it passes, the people will support it. Because the proposal actually matches the need we continue to see across the state. We have all heard the need for housing investments from our constituents.”
Trudeau said the state is experiencing a housing crisis, and needs low-barrier housing with supportive services and low-income housing options. She discussed an example of how some people in Tacoma are experiencing housing crises.
“We have a lot of low-income folks in Tacoma that have housing vouchers,” Trudeau said. “But in order to qualify for a place, you have to have a rent at a certain price point. And unfortunately, there are no units in that price point. So you have, essentially, useless vouchers.”
SB 5202 would create an accelerator revolving loan fund program in the Department of Commerce, Van Gorkom said. It would provide loans to developers, public housing authorities, public development authorities, or other eligible applicants to finance affordable housing for low-income households whose adjusted income is between 50-80% of the area median income, adjusted for family size and the county where the housing would be located.
“Commerce must ensure equitable geographic distribution, and shall not allocate more than $20 million per county per round of funding unless there are no qualifying applications in other counties,” Van Gorkom said. “Loan recipients must begin construction within 180 days of the award.”
The House Capital Committee held a hearing for SB 5202’s companion bill, House Bill 1149, on Jan. 12th.
SB 5202 stems from Gov. Jay Inslee’s proposed budget, which features a referendum that would allow legislators to front-load $4 billion of housing construction over the next six years. The referendum would allow the state to issue bonds outside of its debt limit.
Office of Financial Management Director David Schumacher said creating a referendum was the only way the governor’s staff could address the state’s housing problem without decimating funding for other initiatives in the regular capital budget.
“We decided to go outside the constitutional debt limit, [and] ask for a vote of the people to go big enough and bold enough with the resources we had,” Schumacher said.
Michele Thomas, director of policy and advocacy at the Washington Low Income Housing Alliance, spoke in support of the bill.
“The housing alliance appreciates the governor bringing forward this bold proposal,” Thomas said. “Washington needs one million additional homes by 2044. And over 72% of those homes are homes that the for-profit, private rental market will not build [for] low-income folks that require public subsidy, including permanent supportive housing and housing that’s affordable to low-income households.”