Olympia extends affordable housing emergency through June 2028

Citing ongoing housing affordability challenges and growing uncertainty around federal funding, the Olympia City Council agreed to extend the city’s affordable housing emergency declaration through June 2028.

The declaration preserves a set of incentives intended to speed up affordable housing development. The city council made the move at a meeting on Tuesday, June 2.

The declaration, originally adopted in December 2024 under Ordinance 7414, was set to expire on June 30, 2026.

The extension allows the city to continue six strategies aimed at reducing barriers and costs related to developing affordable housing for low-income households.

During a presentation to the council, Housing Manager Jacinda Steltjes said the conditions that led to the emergency declaration remain largely unchanged.

Olympia is projected to need more than 14,000 new housing units by 2045 to accommodate population growth, with roughly half of those units needed for low-income households.

Steltjes noted about 7,300 Olympia households are housing-cost burdened, spending more than 30 percent of their income on housing expenses.

Responding to Council member Dani Madrone’s question about housing development challenges, Steltjes said affordable housing projects continue to face significant obstacles.

Projects serving households at 60 percent of the area median income (AMI) and below rely heavily on federal, state and local funding.

She said developers face uncertainty about how much funding will be available. Rising construction costs and lower tax-credit returns have also created financing gaps that make projects harder to complete.

“All the more reason for us to extend this declaration, and continue to find all ways we can support more projects moving forward,” said Madrone in support of the resolution.

The emergency declaration includes the following strategies:

• Prioritize permitting for affordable and middle housing projects, moving eligible developments to the front of the permitting queue.
• Provide specialized staff support. A principal planner in Community Planning & Economic Development will act as an ombudsperson for affordable housing and middle housing projects. This staff person will work collaboratively with housing, public works and developers to help move projects through the permitting process.
• Authorize the city manager or designee to take necessary actions to address the emergency on a case-by-case basis. That includes obligating emergency funds as directed by the council, entering into contracts to increase affordable housing supply, exempting or postponing Engineering Design and Development Standards (EDDS) under city control, or taking appropriate emergency actions.
• Participate in 1033 tax exchange transactions to help preserve at-risk affordable housing properties by facilitating transfers between willing owners. This may involve the use or potential use of eminent domain when an agreement is in place among the current owner, future owner and the city.
• The infrastructure assistance grant program provides funding to help cover off-site infrastructure costs associated with affordable housing projects. The program is funded through a 0.5 perent increase in drinking water utility rates and a 1 percent increase in wastewater utility rates.
• A grant program to exempt permit and other fees for eligible affordable housing projects. It is funded with $500,00 in seed money from the economic development fund and supported on an ongoing bases by up to 10 percent or proceeds from the sale of city-owned property that are not allocated to other city priorities.

To qualify, projects must dedicate all units as affordable to households earning at or below 80 percent of AMI and maintain affordability for at least 25 years through a restrictive covenant recorded against the property.

During the first year of implementation, five projects representing approximately 538 housing units benefited from one or more of the declaration’s strategies, Steltjes said.

Among the projects highlighted was The Gibson, an adaptive reuse project converting a former commercial building into 65 affordable studio and one-bedroom apartments. The project is currently leasing units to households earning 80 percent or less of AMI.

Another example is Habitat for Humanity’s Boulevard Road development, which will create 112 affordable townhouses and a neighborhood commercial center. The project recently began construction on its first phase of 38 homes and is primarily targeting households earning 60 percent or less of AMI.

The emergency declaration is intended to increase affordable housing supply, with the greatest impact on low-income residents.

A 2021 Housing Needs Assessment by the Thurston Regional Planning Council found people of color in Thurston County are less likely to own homes, have lower incomes, and are more likely to experience housing instability and homelessness due to systemic inequities.