The Olympia City Council directed staff to continue developing and refining proposed rental protection measures, including income-to-rent ratio policies, manufactured home community protections, and a rent-to-own pilot program to create more equitable and affordable housing options while monitoring potential impacts.
At its Tuesday, March 11, study session, the city council heard a presentation from Christa Lenssen, housing program specialist, detailing proposed policies, targeting tenant screening practices, manufactured home community protections, and a new approach to homeownership. The proposals were previously reviewed by the Land Use and Environment Committee in November 2024.
Lenssen highlighted the current challenges in tenant screening, focusing on a common practice where landlords require tenants to earn three times the monthly rent.
"Considering that over half of our Olympia households who rent spend more than one-third of their income on housing costs, it may be difficult for them to qualify for a new unit if they were forced to move," Lenssen said.
The proposed ordinance, drafted by the city staff, would limit income requirements to 2.5 times the monthly rent. It would also permit tenants to use combined household income or qualify based on a single household member's earnings, with special consideration for housing voucher holders.
Lenssen said this measure provides flexible screening criteria for renters, and reduces the financial and emotional barriers renters face when seeking housing.
Lenssen underscored the critical role of manufactured homes in Olympia's affordable housing strategy.
She said it is an important housing option for vulnerable populations, such as seniors and people with disabilities on fixed incomes.
"Manufactured homes provide an important source of affordable housing in our community, particularly for seniors, and people with disabilities who are on fixed incomes," Lenssen said.
She outlined several policy proposals developed after extensive community engagements, including:
"Residents have been supportive of the zoning protections of the proposals that were included," Lenssen said.
However, residents expressed concerns about the potential 7% annual rent increase.
"Residents recognize that the proposed notice requirements are better than their current situation, but they are worried that even a 7% increase would be extremely challenging for them to afford," she told the city council.
Council member Dani Madrone, who also chairs the Land Use and Environment Committee, noted any zoning code changes would need to go through the planning commission for a comprehensive review.
She suggested moving forward with other manufactured housing policies, while preserving the zoning component for extensive discussion through the planning process.
Lenssen explained the proposals emerged from community meetings where residents expressed concerns about rising lot rents, potential displacements, and concerns about lack of transparency and communication with property owners.
Lenssen proposed a rent-to-own pilot program to help tenants transition to homeownership while mitigating potential risks. The program would provide funding support for legal assistance for tenants interested in purchasing the homes they currently rent.
The city would explore funding options, potentially reimbursing attorney fees or providing technical assistance to support the program. She recommended bringing forward a proposed pilot program scope and budget, pending cost estimates for legal services.
Madrone said the rent-to-own pilot program emerged from conversations with smaller landlords, who felt burdened by new rental housing regulations.
Council member Kelly Green was "dubious" about the rent-to-own program. She was unsure whether there was a demonstrated need for it, unlike other policies, such as manufactured homes protections where there were community concerns.
Green said the rent-to-own program was less clear. She questioned whether existing policies had created an environment where landlords don't want to be landlords.
"The odds of the landlord would then be excited to work with a city-funded program to sell their home," Green said.
While she didn't feel strongly against the pilot due to its small scale, Green wanted to highlight the lack of "clear impetus" for the program.
Council member Robert Vanderpool saw the rent-to-own pilot program as a critical pathway to equitable homeownership.
He emphasized that current housing market conditions have made rental costs as high as some people's mortgages, making traditional homeownership challenging.
He highlighted the need to explore the program's duration, financial mechanics and potential encouragement for landlords looking to sell.
Madrone emphasized the rent-to-own pilot is a voluntary program where both landlord and tenant must mutually agree to participate.
She viewed it as "a potential bridge for unique situations," such as landlords who want to maintain rental income a bit longer and tenants who need more time to prepare for homeownership.
Madrone noted while the program is not a "silver bullet solution," it addresses one of the city's hardest goals: creating homeownership opportunities.
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Wheatpaste
I’m a former renter, now landlord. I love the idea of rent to own. We are looking for ways to provide security to our tenants, not just make a buck. One of the hurdles is that we want to try creative solutions, but it’s very hard to figure out equitable financial models as individuals, or get legal help and loans if you’re not doing a traditional sale. If we had this program a few years ago, it would have helped us buy our house.
Having a program from the city means that banks will be more assured that it’s a vetted approach, the city can help advocate for new financial tools that can make less traditional paths to homeownership possible, and it helps get some scale that can relieve the burden on individuals to figure out a complicated arrangement.
Thursday, March 13 Report this
sonshi
Rent to own sounds nice, but it never works out well. Google 'rent to own in washington state' and convince yourself.
The cold hard truth is that if you can't afford or can't save a 20% down payment, you cannot afford to be a home owner. You just can't. Those annoying things that were landlords' responsibility are now on you. We had a bird strike break a window in our living room. . . over $2000 to fix that thing. Our heat pump went out suddenly. . .almost $10000 needed immediately. Septic pump burned out. . .couple grand. Any electric work? Plumbing work? The 5 figure bills come on fast and furious, and often unexpectedly.
Thursday, March 13 Report this
OlyKid88
My suggestion would be not to tamper with the financial constraints of the market as this will once again lead Olympia down the path of unintended consequences. This will ultimately hurt the very people we need to support as a community.
The more bureaucracy that is created, the more expensive housing becomes. There is a delicate balance and as a community we have let this important issue get outside the guardrails over the last 3 or 4 decades by choices made by the City. Much of this happened with zoning choices in the early years that could have significantly diversified the type of housing that could have been built as the City grew. Instead, Olympia got expensive single family homes.
It is tough to do anything different with single family zoning and high permit/impact fees/sales tax and demanding building codes. A builder might be into a home project for $50k in permits/impact fees and another $40k-$60k in sales tax with the likelihood for some expensive offsite requirements. Forget the land cost, permitting time, labor, materials and financing to even get to the point of building a home.
Ask the Olympia Habitat for Humanity how they feel about working within the constraints of the City - as a non profit with free land, volunteer labor and some donated materials.
When it comes to housing, an analogy that can be used is "pushing on a string". It is pretty easy to make investment stop by creating more rules, adding costs and bureaucracy. Unfortunately, it is like pushing on a string to make investment happen as government can't force the investment they would like to see to occur. It has to be a viable, positive cash flow investment for these developers to put their money at risk.
Focus on the areas that the City can have direct impact : regulations, zoning, permit process, working with non profit groups like Habitat for Humanity. Audit the permitting process, impact costs, building requirements and offsite improvement requirements to ensure they are helping development, not hindering development.
Build more relationships than just LIHI to target the subsidized housing options available. They are the most profitable non profit I have every seen. I think many private developers would be jealous of see these financials. Another topic that should get more attention.
As a side note, I'm starting to feel like the City is leaning too heavily, and giving up control and transparency to the non-profits for certain services. These non profits slowly becoming an extension of City government with its own separate infrastructure that entirely relies on City funding from taxpayers. Once the money leaves the City, the City loses control of any transparency to how, where, and with whom that money is being spent. Since there is no apparent public accountability process in return, no feedback loop is created. There is not a diligent, demanding accountability process for the City to evaluate the success of those funds meeting their objectives an to ensure public funds are being spent appropriately.
https://projects.propublica.org/nonprofits/organizations/943155150
It is EXTREMELY, expensive it is to build subsidized projects. Triple the market rate build cost, maybe more, for much less in finishes, quality and amenities. The source of funding these grants is taxpayer money that has meandered its way through the Federal, State and Local bureaucracy while incurring salaries, program expenses and overhead costs at each step of this lengthy process. The most expensive source of capital available, by many multiples in the marketplace, is for the subsidized funds necessary to make these projects work. There has to be room for improvement. We need affordable, subsidized housing options.
The funding process needs a long form article, or community attention and discussion, to even skim the surface of the complexity and cost to see if a better approach can be created.
It is an extremely complicated puzzle, and unfortunately I have few answers but lots of questions.
Friday, March 14 Report this