Affordable housing debated at workshop

by Richard Uhlhorn

Affordable Housing in the Lake Chelan Valley has been at a crisis stage for several years. There is no affordable housing available and the situation continues to worsen as prices for what comes available continues to rise.

The problem of affordable housing is multi-faceted. Most full time residents are making anywhere from $15 per hour down to minimum wage. Chelan Valley Trust says the average income in Chelan is $37,000 a year or $17.78 per hour. Let’s say that $37,000 is an average. You still can’t afford to purchase a home when the average purchase price of a home is $400,000.

Chelan Valley Trust has a plan to develop affordable homes. The organization has a $2 million construction loan from North Cascades Bank and proposed bids to construct homes in the $170,000 to $200,000 range. Land has already been donated by the Lookout and the Trust would own that land. The new homeowner would own the home.

The City’s proposed budget has $100,000 set aside to help with Affordable Housing efforts. The idea is that these funds could be used to help pay for general service charges to make the construction less expensive.

The other facet to the affordable housing dilemma is that many of the people working in the service industry are young and not ready to purchase a home. This is an argument being made by John Olson on a regular basis. Olson also has pushed the City to recognize that short term rentals has taken much of the long term rental out of the market as home owners try to capitalize on Chelan’s busy tourism season.

The City and the new Chelan Valley Trust should be applauded for attacking the affordability of living in the Valley, but unfortunately, it will be at least a year before the first affordable houses are being built. Until that time, people seeking homes or apartments will have a difficult time putting a roof over their head in the Lake Chelan Valley.

While the City Workshop on Tuesday, December fourth was dedicated to the proposed budget and GFCs (General Facilities Charges), affordable housing became a major topic of discussion.

Councilwoman Erin McCardle wants the City to have solid plan on hand when it begins to use funds set aside to help develop affordable housing.

Erin McCardle opened the workshop budget hearing with a question. “Why isn’t affordable housing on the agenda? . We haven’t had a discussion yet. The 2019 proposed budget has set aside $120,000 for affordable housing issues and McCardle is concerned that this funding measure is done right.

Mayor Cooney pulled the issue out and said, “Let’s discuss it.” Tim Hollingsworth, who is on the board of directors of Chelan Valley Trust, commented that it was prudent to have it in the budget if the organization wants to build affordable housing. “Obviously we don’t’ want to open our check books.”

Councilman Tim Hollingsworth agreed that the City needs to be a partner with the newly formed Chelan Valley Trust.

McCardle replied that the City wasn’t ready to do that because it needs to have a policy in place whereas Hollingsworth replied that the city has a comprehensive plan and that a part of that plan is to provide a subsidy for housing. McCardle reiterated that the City needs to have a policy in place. “I’m comfortable putting money aside, but not comfortable until a plan is in place. There is no oversight.”

Mayor Cooney agreed that McCardle’s request for solid criteria and oversight of the City’s funds for affordable housing was a fair concern.

Mayor Cooney replied that Erin’s concern was fair and that the City needs to go back to Andy to make sure the City can use money set aside to help with GFCs (General Facility Charges) for affordable housing. The proposed plan is to have set aside money to help pay for the required City GFC charges. In essence, the City would allow a subsidy $3,000 to $4,000 dollars per affordable home to be used against the GFC charges. Hollingsworth said, “We are trying to create an organization that can partner with the City.” McCardle replied to Hollingsworth. “We haven’t done our job to finish it.” Cooney said, “We will finish it.”

City Administrator Mike Jackson stated that the City has to be careful. “We need restrictions with ground rules,” he said. “It’s important to enforce this.” McCardle replied that she doesn’t want to see those funds restricted to just the Housing Trust.

Andy Baker (FCS) said, “I think we can define this by ordinance. You have to have an ordinance with requirements and income levels.” Mayor Cooney added that he, Mike Jackson and Baker would sit down and get the language down for the ordinance.

Hollingsworth also stated that the City needs permanent affordable rentals… not market rate rentals. Ray Dobbs added, “I don’t want to see Habitat for Humanity out of the affordable housing market.”

Cooney added that the City wasn’t just looking at single family housing. “I’m not ruling out multi-family housing… just focusing on single family housing.”

Guy Evans encouraged the City to look into reducing GFCs for large projects.

Guy Evans and a financial advisor from the Weidner Group gave a presentation to the City Council and staff concerning Weidner’s desire to build a 240 unit apartment complex on Apple Blossom Center property. Evans, a realtor with Coldwell Banker, said, “We have a lot of challenges in Eastern Washington… too many unknowns.” Evans went on to say that local developers did not have the funds or the desire to build multi-family housing.

Weidner Group is a for profit company that builds apartment complexes across the Nation with rents at market rates. If they were to build at the Apple Blossom Center, the rents would look similar to the above graph.

“The beauty of Weidner is that they have a strong balance sheet and are willing to make that bet,” said Evans. Of course the cost of the City’s GFCs is an issue and Evans encouraged the City to look closely at cutting those fees to a reasonable amount.

Councilman Ray Dobbs commented that the City of Leavenworth is waiving a lot of those fees to get affordable housing built in that community. Councilwoman Wendy Isenhart remarked that Chelan needs housing in all categories for the middle income resident.

Councilman Ty Witt asked if the Weidner project was big enough to offset the City’s vacancy rates.

Mayor Cooney added, “I think everybody gets it. I like the location for it. A bunch of apartment homes don’t turn me on, but a large complex might work.” Evans encourage the City to get a conversation started.