Advocates for affordable housing on Bainbridge Island have started a letter-writing campaign to stop the sale of the 550 Madison Apartments to a private developer.
Housing Kitsap, the owner of the 13-unit apartment building on Madison Avenue, notified residents of the complex on June 5 that the nonprofit housing agency was going to sell the property.
“This extremely difficult decision was made in order for Housing Kitsap to have long-term financial viability,” Housing Kitsap said in a letter to residents.
“At this time, we do not have a current buyer, closing date or information regarding if the rental rates will change,” the letter continued. “You lease agreements will transfer to the new owner upon completion of the sale.”
The lack of a potential buyer was short-lived, however.
At last week’s meeting of the Bainbridge Island City Council, Mayor Kol Medina, a member of the board of directors for Housing Kitsap, told his fellow council members that a buyer had stepped forward. Protections to keep the property affordable — restrictions that require the 500 Madison Apartments remain as low-rent public housing — are expiring in July.
Medina said Housing Kitsap does not face any restrictions on how it can sell the property.
It can sell to a private party, which could keep the building but raise rents to market rates, or tear down the apartment complex and build something new, he said.
Housing Kitsap — which owns and manages more than 900 housing units across the county, including buildings on Bainbridge Island and in Port Orchard and Poulsbo — has been on a shaky financial footing in recent years. A state audit last year warned that the housing agency, which was started in 1982, was in dire financial straits. The state said Housing Kitsap was “at risk for not being able to meet its obligations or maintain operations,” and the nonprofit responded by cutting staff last summer.
Medina said Housing Kitsap’s declining annual revenues — which largely come from rent from tenants and federal subsidies and grants — had prompted restructuring within the agency.
“One of the strategies to deal with that has been to sell some property,” Medina said.
The housing agency has set a sale price of $2 million for the property, he added.
Officials with Housing Resources Bainbridge (HRB) announced last week they had made an offer to buy the property for $1.5 million.
“HRB’s mission is to preserve the diversity and vitality of Bainbridge Island by providing and maintaining affordable housing opportunities in the community,” Linda Lincoln, chair of the HRB board, and HRB executive director Phedra Elliott said in a letter to the community.
“Should Housing Kitsap accept our offer, these units will remain affordable for the community in perpetuity,” they said. “If these units are sold to another buyer, they will almost certainly disappear from the portfolio of affordable units on Bainbridge Island, further eroding what is already a chronic shortage of affordable rental units.”
Late last week, Elliott and Lincoln asked supporters to write or contact the board of Housing Kitsap and request officials accept HRB’s offer on the property.
The board of Housing Kitsap is scheduled to meet Tuesday, June 25 to review the sale of the property.
Medina, who sits on the Housing Kitsap board due to his role as Bainbridge’s mayor, said he has told others on the board that he does not support the sale of 550 Madison to a private developer.
Bainbridge Councilman Matthew Tirman is acting as an advocate for the residents on 550 Madison and is also asking the Housing Kitsap board to keep the property as affordable housing.
With the agreement of his fellow council members, Tirman authored a letter Monday to Housing Kitsap asking the agency to accept HRB’s offer.
“On behalf of the community of Bainbridge Island, we the Bainbridge Island City Council urges the Housing Kitsap Board of Commissioners to vote in support of Housing Resources Bainbridge offer to purchase property at 550 Madison Ave., so that it may remain affordable in perpetuity,” Tirman wrote in the June 17 letter.
“As elected officials in Kitsap County we are all keenly aware that we are facing an affordable housing crisis. While the county and each of our municipalities are grappling with the difficulties in the creation of new affordable units, it is more important than ever to maintain our existing stock of low-income and workforce housing across Kitsap,” Tirman added.
Tirman said the board’s decision to sell the apartment to a private developer was questionable.
“Preserving affordable housing is an integral part of your organization’s mission, however, our council must question the rationale of the board’s upcoming vote to sell 550 Madison Ave. to a developer, the result of which will undoubtedly lead to 13 households scrambling to find a new home,” Tirman wrote.
Tirman added that the offer from HRB was a “generous, above market-rate.”
The property had a value of approximately $1 million in 2014, the last time it had a listed market value with the Kitsap County assessor.