Olympia's Utility Advisory Committee is set to review two programs that use utility revenues to reduce development costs for affordable housing.
The committee will take up the issued on Thursday, June 5.
The Olympia City Council adopted Ordinance 7381 in December 2023, establishing a 50% discount on the city's GFC for connecting to the city's water system. The ordinance aims to reduce development costs for projects where 100% of the units are affordable to households earning up to 80% of the area median income (AMI), and remain affordable for at least 30 years.
According to a staff report, only one development has benefited from the program.
Developed by VBT Lansdale Pointe, LLC at 911 Burr Road, the project received its exemption in June 2024 and is currently under construction. The first units are expected to become available in the summer.
The development features 162 family-oriented rental units across 10 apartment buildings, offering two-, three-, and four-bedroom layouts. The apartments are designed to be affordable for households earning between 60% and 80% of the AMI. Rental rents for the units range from approximately $1,320 to $1,705.
Olympia's current AMI is $116,700. A family of four with an annual income of $93,350 would qualify at the 80% threshold.
Three more projects have applied for the general facilities charge (GFC) discount program and are currently in the permitting process. City staff anticipates additional applications before the end of the year.
To offset the revenue reduction caused by the discount program, water utility rates for all new developments were increased by 2% beginning in 2024.
The second program under review is the Infrastructure Assistance Grant Program.
In January, Olympia's declaration of an affordable housing emergency led to the creation of a new Infrastructure Assistance Grant Program, which uses a 0.5% drinking water utility rate increase and a 1% wastewater rate increase to fund off-site infrastructure improvements for eligible affordable housing projects.
The program is estimated to generate approximately $75,000 in drinking water revenue and $85,000 in wastewater revenue in 2025. Funds are designated for their respective infrastructure types and will be available for affordable housing projects on a first-come, first-served basis. No applications have been submitted thus far.
These incentives, GFC discount, and Infrastructure Assistance Grant programs are part of Olympia's efforts to comply with House Bill 1220, which requires cities to plan for housing across a range of income levels, promote a variety of residential densities and housing types, and encourage preservation of existing housing stock in the next 20 years.
By 2045, Olympia and its urban growth area will need approximately 14,295 new housing units to support projected population growth. Of these, about 7,616 or 53% of units will need to be affordable for low-income households.
The Utility Advisory Committee will meet in person at 5:30 p.m. on Thursday, June 5, in Room 207 of Olympia City Hall.
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BobJacobs
Congratulations to both Olympia Utilities and and the JOLT for making public how much and how these discounts are paid for -- by charging all rate payers more.
The next step in providing "full disclosure" to the public annually.
There are a number of cases where discounts of fees and taxes are used to pay for programs, rather than annual appropriations. Typically this tactic hides the fiscal impact. We don't get to learn how much they are costing us and which of us are paying. This approach runs counter to basic principles of public finance.
Bob Jacocbs
Tuesday, June 3 Report this
Southsoundguy
Cities are a Ponzi.
Tuesday, June 3 Report this