A public housing authority (PHA) is an independent municipal corporation established to provide safe and affordable rental housing for low-income individuals, families, senior citizens, and people with disabilities.? A PHA may finance a low-income housing development if certain conditions are met.
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In general, low-income housing developments financed by a PHA must be subject to a 20-year affordability agreement that requires 50 percent of the dwelling units or 50 percent of the interior space of the development to be made available to low-income households for at least 20 years.? For mobile home parks, 50 percent of the total number of mobile home lots in the park must be made available to low-income households.? Additionally, if a PHA-financed, low-income housing development is owned by a for-profit entity, the low-income housing portion of the development must be rented to households whose incomes do not exceed 80 percent of the area median income and must have rents that do not exceed 15 percent of the area median income, unless certain rent subsidies are provided.
The requirement that rents may not exceed 15 percent of the area median income in PHA-financed, low-income housing developments owned by a for-profit entity is removed.? If a PHA-financed, low-income housing development is owned by a for-profit entity, the low-income housing portion of the development must be rented to, and have rents affordable to, households whose incomes do not exceed 80 percent of the area median income.
(In support) Affordable housing continues to be a challenge across the state.? An additional million units need to be built in the next 20 years to accommodate projected growth.? The Legislature should take action to facilitate the building of affordable housing.? A recently passed bill modernized the statute that allows public housing authorities (PHAs) to use their financing tools to partner with private entities?on housing developments as long as half the units are reserved for households at 80 percent, instead of 50 percent, of the Area Median Income (AMI).? Unfortunately, an additional change needs to be made.? Under this bill, when a PHA partners with a private entity, 50 percent of the units must be reserved for, and the rents must be affordable to, households making 80 percent or less of the AMI.
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Public housing authorities play a variety of roles in their communities, and the Legislature gives PHAs broad authority to support affordable housing.? PHAs focus on serving the people with the lowest incomes in our communities who earn 30 percent or less of the AMI through administration of federal rental assistance programs like public housing and the housing choice voucher program.? Public housing authorities also play a critical role in financing new, affordable housing through direct loans for project-based vouchers at permanent supportive housing sites.? This bill is not intended to take away any funding from resources that go to those with the lowest incomes in our communities.? The housing authority funds that would be used to finance the developments allowed under the bill are separate from the funds that go to those with the lowest incomes in our communities.
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The bill makes a necessary technical correction to allow the previous AMI adjustment approved by the Legislature to be implemented.? The current law requires unit rents to be no more than 15 percent of the AMI.? This provision made sense when it was originally put into statute in the 1980s, but given the conditions in today's market, these numbers no longer work, and the financing does not pencil out.? The 15 percent would need to be adjusted to 24 percent today.? There's an incompatibility between the target population making 80 percent or less of the AMI and the rents that can be charged.? The correction made by the bill will allow the statute to operate as previously envisioned and allow PHAs to partner with private entities to increase affordable housing in our communities.
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(Opposed) Low-income renters should not be excessively burdened for private developers to make more money.? In low-income and transitional housing programs, there is a lot of difficulty actually being able to house people because they are not able to afford 30 percent of their gross income on rent.
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(Other) Public money should not go to enriching private landlords.? If public money is leveraged to loan money to private developers, the public should get something in return.? If 30 percent of a household's gross income is used as a marker for affordability, unit rents at 24 percent of the AMI would be affordable to those making 80 percent of the AMI. ?This bill should ensure that rents do not increase beyond 30 percent of a household's gross income.? In fact, 30 percent is sort of a new metric for affordability.? It used to be 25 percent.? Rather than removing the 15 percent AMI threshold for unit rents, the bill should raise the threshold to 24 percent.
(In support) Representative Amy Walen, prime sponsor; Andrew Calkins, Bellingham & Whatcom Housing Authorities; Dan Watson, King County Housing Authority; Tim Walter, King County Housing Authority.