Thursday, October 1, 2026
The Lacey City Council put a $3 million commitment to a regional affordable housing project on hold, as it is seeking additional information on the proposal.
The council discussed the issue at a work session on Tuesday, Jan. 27. Council members said they have concerns about the nonprofit developer's track record in their city.
The Franz Anderson Permanent Supportive Housing project, proposed for 527 Franz Anderson Road SE in Olympia, calls for a five-story apartment building with 71 units for formerly homeless and low-income residents. The proposed site is between Interstate 5 and Martin Way, adjacent to an existing tiny shelter village.
The Low-Income Housing Institute (LIHI) would develop and manage the property. However, the same nonprofit also runs Maple Court, an enhanced shelter at 8200 Quinault Drive NE in Lacey. However, concerns over the operations of Maple Court have been raised since it opened, according to a city staff report.
Council member Lenny Greenstein questioned why the city would invest in another LIHI project, citing what he called a "horrible job" at Maple Court.
"My biggest concern here, to be frank, is LIHI," Greenstein said. "That place has been a disaster. And I'm just not quite sure why anyone would put money into a project for LIHI to be the lead agency running this."
Lacey, Olympia, Tumwater and Thurston County committed funding to the proposed Franz Anderson project through an interlocal agreement (ILA) in late 2023.
To date, the project has secured approximately $29 million in capital financing. That includes $3 million from Lacey, $3.5 million from Thurston County, $275,000 from Tumwater, $2.88 million from the Thurston Regional Housing Council (RHC) and $15.5 million in tax credit equity.
LIHI has requested approval to modify the project's income requirements for residents. The original plan restricted all units to residents earning no more than 30% of area median income (AMI), which works out to approximately $24,500 annually for a single person.
Instead, the nonprofit aims to designate 35 units for residents earning up to 50% of AMI, or approximately $40,850 per year.
The request comes after federal funding constraints forced a reassessment. LIHI had expected to receive 18 project-based housing vouchers from the Housing Authority of Thurston County. With those vouchers no longer available, the project faces a projected annual shortfall of $285,500 under the original plan.
Allowing higher-income tenants would generate sufficient rental revenue to cover operating costs and reduce reliance on federal subsidies, LIHI and city staff said.
Mayor Andy Ryder said he would support the modification under one condition.
"I would feel considerably better about fulfilling this request if I knew Maple Court was also going to be converted to low-income housing," Ryder said. "I can't just ignore what's going on in my backyard."
In response, LIHI's Housing Development Director John Torrence said the nonprofit plans to convert Maple Court to permanent supportive housing for homeless residents. He added that he would consult with leadership and state funding sources about whether Lacey's preferred approach is feasible.
City of Olympia’s Affordable Housing Manager Jacinda Steltjes acknowledged the two projects are connected, but warned that a wait-and-see approach could have consequences. She said Olympia City Manager Jay Burney supports the proposal and has had conversations with Olympia council members who also indicated support.
Lacey City Manager Rick Walk said Franz Anderson must break ground by the end of 2026. Otherwise, delays could jeopardize existing state and federal funding commitments.
Council member Nicolas Dunning, who represents Lacey on the RHC, conveyed the council's position at that body's recent meeting. He indicated that Lacey is requesting additional time and information before reaching a decision on the ILA.
No formal action was taken during the work session. Walk said staff will schedule additional work sessions and consult with regional partners.
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Bobwubbena
Maybe it is time for the city to get consistent.
Most low-income related housing programs require a shared responsibility for paying the bills. Most of us are required to pay the City and County tax bills whether or not we like it. We also have to pay the utility bills etal etal. Everyone has some responsibility to help pay their cost of living & eating if they want a say in the end outcome. unless they are a true ward of the "State--us "
So if the Jungle dwellers want to have a say in the handout---have each individual pay a monthly tax/fee into the "Jungle Account" or move out. Then they should have a proportionate say in how those funds are spent. The true cost of meeting their self-created needs should be documented.
No one is owed a housing and food allowance without paying by personal labor and assistance to produce the income for the cost of service. This is basic survival that most of us have been taught. Some have forgot.
In our charity work in Africa bush country and other third world countries---including the Jungle--- it is called self-help and "sustainable (sustaining) outcome". Without appropriate help from the individuals, they should go look elsewhere for help and maybe they will begin to do more for themselves Start with looking at the trash. Have them clean up after themselves. ---the city (us) can haul it away. Some self-dignity is required along with community sharing of themselves.
Friday, January 30 Report this
KarenMcIrish
Maple court... what's wrong? Is it written down somewhere?
Friday, January 30 Report this
JW
The Lacey City Council is right--LIHI is a HORRIBLE institution with no accountability in their buildings.
Friday, January 30 Report this
Kruz81
Omg. The idea that any government should pay for housing like this is insane. We are and will not be so socialist. I know the state already has programs that are built after this **** but it needs to stop.
Saturday, January 31 Report this