Agencies need every dollar
June 9, 2008 · Updated 3:12 PM
"One obstacle to affordable housing on Bainbridge Island is the operation in the marketplace of the law of supply and demand. When an area is as desirable as Bainbridge is perceived, demand for housing is strong. And where demand is increasing faster than supply, as has been true on the island, home prices rise.That's not the only problem. Another is the cost of creating new housing for those with lower incomes.It is simply not possible to build units at a price our target population can afford to pay, said Martin Rowe, city affordable-housing coordinator.The only way to make it work is to reduce our cost of capital, Rowe said. We have to get subsidies that are high enough to get our costs down to the point that the units are self-sustaining with rents of $250 to $300 per month.What that means, he said, is securing state and federal grant money. And the key player in that effort is the Housing Trust Fund.Created in the wake of a 1998 study directed by Mayor Dwight Sutton, the fund receives and disburses private and public money to improve the island's housing stock.The trust fund's principal purpose is to provide leverage by giving Bainbridge a leg up in the competition for housing grants.There are just not enough state and federal dollars to help everyone, Rowe said. Local support is so important in securing those grants.The HTF is managed by a four-person executive committee consisting of Sutton, city Administrator Lynn Nordby, a city council representative (currently Merrill Robison), and a citizen representative (now Garnie Quitslund).The HTF's budget, which now stands at about $155,000 annually, comes in roughly equal shares from three sources.The first is private donations.Right now, the fund has 15 local businesses committed to annual support of close to $50,000, and five others considering how to support it, Quitslund said.The second source of funds is a contribution from the city's general fund that matches private donations dollar for dollar, up to an annual maximum of $75,000.Third, a small portion of building permit fees is dedicated to the HTF. It's about $150 per permit, Quitslund said.An example of leverage in action is the fund-raising for the Housing Resources Board's West Home project, where private donations of just over $50,000 were ultimately leveraged into grants for total funding of $961,000.An additional revenue source, at least potentially, is money received from the resale of affordable homes. The city council is considering an ordinance that would allow homes created under the city's affordable-housing ordinance to be resold at market rates, but would let the city recapture a portion of the proceeds.That doesn't create an inventory of affordable homes, Rowe said, but it does recycle dollars back into the city's affordable-housing program.Another cost-cutting measure employed by the Housing Resources Board has been to accept delay. The Woodman house was moved in the spring from the construction site of the Madison Courtyard condominiums. Since then, it has been sitting on the city-owned lot at Weaver Road and Wyatt Way waiting for installation.We can't pay any markup on the actual costs of that work, HRB director Bill Reddy said, so we can't use a general contractor. We hire the subcontractors ourselves, but getting it done fast costs money. So we wait until they can get to the job.Questions have also been raised about the degree to which city-imposed costs and fees may be part of the problem. Quitslund is leading a citizen task force, appointed by Sutton, to examine that question.The per-unit cost of building West Home is double the cost of building Island Home (in 1993), Quitslund said. Material costs have gone up in that time, but they haven't doubled. And with the new floor-area ratio rules, per-unit land costs haven't changed much.City-imposed costs are significant - the HRB will spend roughly $60,000 on permit costs, impact fees and hookup charges for West Homes. The group will consider asking the city to waive or modify those fees for affordable units built by non-profit organizations.Their model is a Port Townsend ordinance which does just that. There, low-income housing built by public or private non-profit agencies may defer permit charges, hookup fees and impact fees, at least so long as the units remain affordable.For a few thousand dollars, the city can help guarantee low-rent housing, Quitslund said.We'll see whether we can convince the council to do it. "