Projects aim to ease Vancouver’s affordable housing crisis

City receives 10 applications seeking share of $3.7 million in funding

By Patty Hastings, Columbian Social Services, Demographics, Faith and Lauren Dake, Columbian Political Writer

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The city of Vancouver is in the midst of trying to ease its affordable housing crisis. Six local nonprofits and the local housing authority want to be part of the solution.

Earlier this week, the city received 10 applications for projects aimed at easing the crisis. The proposals range from rehabilitating existing apartments to building a new 78-unit apartment complex. The proposed projects total about $5.8 million, well over the $3.7 million the city has to dedicate toward building, preserving and acquiring affordable homes.

“I’m very pleased with the response, having applications that exceed the available funds is a consistent indication of the need of the community,” Vancouver City Manager Eric Holmes said, adding that having such a wide range of projects is a positive start for the first year of the program.

The city has been struggling with low vacancy rates and not enough shelters for the homeless population.

In November, voters approved a property tax increase to create a dedicated fund to help support the city’s most low-income families. Councilors are tasked with figuring out the best way to spend $6 million annually for the next seven years. The bulk of the money will be spent on building and preserving homes, with another chunk dedicated toward providing rental assistance for those at risk of eviction. About 5 percent will go toward building transitional housing.

The Vancouver City Council will begin reviewing the proposals by the end of June.

Most applicants are requesting money for projects already in the works. Vancouver’s Affordable Housing Fund would add to a project’s “capital stack,” as it’s called in the industry, meaning the multiple funding sources needed to make a project happen. The city’s goal is not to fully fund larger projects, but to be part of that stack.

“We have received an impressive group of applications for some very worthy projects that, if fully funded, would build 237 new housing units and rehabilitate or preserve 28 more,” Vancouver Community and Economic Development Programs Manager Peggy Sheehan said in a statement. “It’s wonderful to see so many agencies and organizations interested in helping find solutions for our low-income housing crisis.”

Mission-driven

Two of the more unique applicants include Kleen Street Recovery and Housing Initiative LLC, which is governed by the local Council for the Homeless.

Housing Initiative, a nonprofit launched last year to help develop affordable housing using creative financing, requested money for two different projects. Sierk Braam, a commercial real estate agent, stepped off the Council for the Homeless’ board to run Housing Initiative. He’s trying to create a model for developing affordable housing that doesn’t rely on typical funding sources, such as low-income housing tax credits or HOME, a federally-funded block grant program.

Being an LLC, a limited liability company, keeps open more creative financing options and arrangements, said Andy Silver, the Council for the Homeless’ executive director.

The projects would be built similar to a private development but Housing Initiative would serve as a mission-driven owner. Philanthropically motivated investors, such as the Community Foundation for Southwest Washington, would offer loans with lower interest rates, replacing profit-driven investors. This type of lending is called impact investing because the investments have a measurable social benefit.

“It’s somewhere in between giving the money away and getting a market return on their investment,” Silver said.

The smaller project, The Pacific, would cost $2 million. Funding for the 18-unit complex would come from a traditional bank loan, a loan from the Community Foundation and the Vancouver Housing Authority would be the equity partner.  The development partner is Home First Development, which has developed affordable housing in Oregon without public subsidy. The Portland-based nonprofit Relay Resources would be the property managers. If Housing Initiative secures permits this summer, then construction could start in the fall. There would be a 10-unit building and an eight-unit building adjoined by a common space. It would be at 78th Avenue and 32nd Street behind a couple other housing projects that are in the works.

The $250,000 requested from the Affordable Housing Fund would be used for the permanent financing and lowering debt after the project is built.

“By changing those levers and by having mission-driven ownership that doesn’t need the overall profit margin … you’re at below-market rents,” Silver said, adding that screening criteria can be friendlier, too.

What’s more, the Vancouver Housing Authority will buy down the rents on the 10-unit building, making them affordable to people who earn 30 percent of the area median income or less. For a single person, that equates to an annual income of under $15,700.

Then, there’s the more ambitious 78-unit, mixed-income development called The Shipyard that would serve families, seniors and people exiting homelessness. The $11.3 million project would use bank loans, low-interest loans and mezzanine financing. Realvest, a local property management company, and other partners would contribute $1 million in equity. The project seeks $2 million from the Affordable Housing Fund, the most of any applicant.

Forty units would serve households at or below 50 percent of area median income, $37,350 annually for a four-person household. The remaining units would be rented to people earning less than 80 percent of the area median income, or $59,750 for a four-person household.

The project could occupy a parcel next to Town Plaza at Mill Plain and MacArthur boulevards, though the specifics aren’t set in stone. Silver hopes work on The Shipyard begins sometime in 2018.

Aiding efforts

Kleen Street Recovery requested $335,000 to go toward rehabilitating 10 duplexes in central Vancouver that would provide recovery-based transitional housing for formerly homeless people.

In addition to housing, the Vancouver-based nonprofit provides some services and helps people navigate other resources.

“It’s hard when you try to do this stuff by yourself,” said founder Jeff Talbott.

The 20-unit complex at 2212 Carlson Road is owned by Pinewood Apartment Association Inc., but the owner would enter into a master lease agreement with Kleen Street, Talbott said. Cody Shaw, Kleen Street’s housing director, said the goal is to get people progressing in a clean-and-sober environment while rebuilding their rental history. Residents go to support meetings, house meetings, life skills classes and do volunteer work.

The duplexes need new roofs, flooring, windows, kitchens, appliances and heating systems — improvements that have already begun.

“I’m not waiting,” Talbott said. “I’m doing it one way or another.”

Money from the Vancouver Affordable Housing Fund would move the project along. Shaw, who’s lived in the duplex community for three years, said nobody is getting kicked out to make way for Kleen Street’s clients and the nonprofit is working with people already living there.

“As each unit opens up, then we’re taking over that unit. So, it’s a slow process,” Shaw said.

Kleen Street already leases other properties in central Vancouver, housing 33 people. About half are veterans, said Talbott. He echoed the military’s mantra: Nobody gets left behind.

“Why are we leaving them behind when they come home?” he said.

That was his big motivator to start Grounds for Recovery with his brother Joey Wild in 2013, which later turned into Kleen Street Recovery.

Proposals list

Here’s a full list of the project proposals, according to the city of Vancouver. For more information, visit www.cityofvancouver.us/ced/page/affordable-housing-fund.

Project Name: Housing for single new moms and babies

Owner/Nonprofit/Developer: New Beginnings Maternity Home, nonprofit.

Location: 10116 S.E. 12 St.

Price tag: $35,000.

Description: Improve existing home for single, homeless mothers who are pregnant or have infants. Funds would also be used to update furniture and cover program costs for mothers who can’t afford the fees.

Project Name: Isabella Court Phase II

Owner/Nonprofit/Developer: REACH CDC, nonprofit.

Location: 3020 N.E. 62nd Ave.

Price tag: $1,032,520.

Description: New construction of 49 units with the goal of housing formerly homeless families, individuals with mental illness and veterans.

Project Name: Caples Terrace

Owner/Nonprofit/Developer: Vancouver Housing Authority, public entity.

Location: 500 Omaha Way (part of Skyline Crest development).

Price tag: $900,000.

Description: New construction of 28 units, with the goal of housing youth aging from foster care and homeless youth.

Project Name: Downtown apartments

Owner/Nonprofit/Developer: Vancouver Housing Authority, public entity.

Location: 16th and D St.

Price tag: $500,000.

Description: New construction of 30 units.

Project Name: Meriwether Place

Owner/Nonprofit/Developer: Vancouver Housing Authority, public entity.

Location: 6221 E. Fourth Plain Blvd.

Price tag: $500,000.

Description: New construction of 30 units with the goal of filling them with chronically mentally ill homeless individuals.

Project Name: McKibbin Commons

Owner/Nonprofit/Developer: Evergreen Habitat for Humanity, nonprofit.

Location: 1110 S.E. 77th Court .

Price tag: $200,000.

Description: New construction of four homes, part of a 10-home development. Tenants would be part of a rent-to-own model.

Project Name: Community Services Northwest Property Rehabilitation

Owner/Nonprofit/Developer: Community Services Northwest, nonprofit.

Location: 3519 E. 21st St. and 1815 E. Mill Plain Blvd.

Price tag: $89,000.

Description: Rehabilitation of two existing properties to serve homeless and low-income individuals.

Project Name: Low Cost Housing Rehab

Owner/Nonprofit/Developer: Kleen Streets Recovery.

Location: 2212 Carlson Road.

Price tag: $335,000.

Description: Rehabilitation of a 20-unit apartment building to house seniors, veterans and the chronically homeless.

Project Name: The Pacific

Owner/Nonprofit/Developer: Housing Initiative, LLC, nonprofit.

Location: 3209 N.E. 78th Ave. and 7818 N.E. 32nd St.

Price tag: $250,000.

Description: New construction of 18 units.

Project Name: The Shipyard

Owner/Nonprofit/Developer: Housing Initiative, LLC, nonprofit.

Location: Near the intersection of East Mill Plain Blvd. and MacArthur Blvd. in former Tower Mall.

Price tag: $2 million.

Description: New construction of a 78-unit mixed income development.