HomeMy WebLinkAbout122120_cabs01JEFFERSON COUNTY
BOARD OF COUNTY COMMISSIONERS
AGENDA REQUEST
TO: Board of Commissioners
FROM: Philip Morley, County Administrator
DATE: December 21, 2020
RE: PUBLIC HEARING NOTICE re: Proposed Ordinance Imposing a Sales and Use Tax for
Affordable Housing & Supportive Services in Accordance with House Bill 1590 and
STATEMENT OF ISSUE: The Board of County Commissioners (BoCC) will conduct a Public
Hearing on Monday, December 21, 2020 at 1:30 p.m. in the Commissioners' Chambers,
Jefferson County Courthouse, 1820 Jefferson Street, Port Townsend, Washington via a virtual
meeting, for the purpose of taking written and oral testimony regarding a Proposed Ordinance
Imposing A 1/10th of 1% Sales And Use Tax For Affordable And Supportive Housing In
Accordance House Bill 1590 and RCW 82.14.530.
The proposed sales and use tax of 1/101h of 1% is equal to $1 on a $1,000 purchase. Pursuant
to FIB 1590 and RCW 82.14.530, this tax can be enacted by vote of the County Commissioners.
ANALYSIS: The proposed ordinance would:
• impose the sales and use tax upon taxable events (as defined in RCW 82.14.020(3)) to
be used for housing and related services as authorized by RCW 82.14.530;
• set the rate of tax at one -tenth of one percent of the selling price or value of article
used;
• set administration and collection of the sale and use tax pursuant to Chapter 82.08
RCW and Chapter 82.12 RCW;
• restrict use of moneys collected from the sales and use tax solely for housing and
related services authorized by RCW 82.14.530;
• direct the funds to be collected in a Jefferson County fund dedicated to affordable
housing, and that the funds shall be administered by the Board of County
Commissioners or the Board's designee;
• include a standard severability clause;
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set an effective date at five days after publication in the official newspaper, by which
the sales and use tax would apply to taxable events occurring on or after April 1, 2021
pursuant to RCW 82.14.055; and
• direct the Code Reviser to codify the ordinance in a new Chapter 3.33 of the Jefferson
County Code.
A Hearing Notice with a web address to view the proposed ordinance was published in the
Peninsula Daily News on December 10 and December 17.
BACKGROUND: A pervasive lack of affordable housing is a pressing challenge throughout
Jefferson County, especially for people with lower incomes. In 2017, the Jefferson County
Board of Commissioners adopted Resolution No. 35-17, finding "that an emergency exists with
respect to the availability of housing that is affordable to low-income households and with
respect to the availability of housing that is affordable to very low-income households in
Jefferson County."
House Bill 1590 (HB 1590) was enacted by the Washington State Legislature in 2020. It amends
RCW 82.14.530, and authorizes cities and counties to impose a sales and use tax up to 1/101h of
1% for affordable housing. That rate equals just $1 on a $1,000 purchase. Sales and use taxes
apply to most retail sales of "tangible personal property" within Washington, as well as
purchases delivered here by Internet or mail-order retailers. Services to individuals and
businesses — things like haircuts, medical bills, consultant fees, etc. — are not "personal
property," and most are not subject to sales tax.
The 1/101h of 1% sales and use tax for affordable housing originally required voter approval,
but under HB 1590, this revenue source may now also be approved by the local legislative body
with a simple majority vote.
At least 60% of the revenue generated by the 1/101h of 1% sales and use tax must be used for:
a) constructing affordable housing and facilities providing housing -related services, solely
for eligible households (as defined below); or
b) constructing mental and behavioral health -related facilities; or
c) funding the operations and maintenance costs of new units of affordable housing and
facilities where housing -related programs are provided, or newly constructed
evaluation and treatment centers.
The affordable housing and housing -related services in a) above must serve only persons
whose income is at or below sixty percent of median income, and who are one of the
following:
o Persons with mental illness
o Veterans
o Senior citizens
o Families with children who are homeless (or at -risk of being homeless)
o Unaccompanied homeless youth or young adults
o Persons with disabilities
o Domestic violence survivors
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The rest of the revenue (up to 40%) can only be used for housing -related services, or the
operation, delivery and evaluation of mental and behavioral health treatment programs and
services, without the same restrictions of "eligible persons."
The law also allows up to fifty percent of the proceeds to be used to issue and service bonds to
finance the provision or construction of affordable housing, facilities where housing -related
programs are provided, or evaluation and treatment centers.
When the possibility of enacting the affordable housing sales tax under HB 1590 became
evident, County and City staff asked local public and non-profit housing providers as a group to
identify current projects of a scale that revenue from a HB 1590 affordable sales tax could
conceivably fund. The purpose was two -fold: to test whether a sales tax could actually result
in meaningful affordable housing projects, and also to begin to prime the pump with these
organizations to develop additional affordable housing projects in Jefferson County.
Together, the organizations — the Peninsula Housing Authority, OlyCAP, Bayside Housing
Services, Habitat for Humanity of Jefferson County, and DOVE House - quickly found consensus
on a list of six examples of the kinds of permanent housing projects that a HB 1590 sales tax
could fund right off the bat, as well as a recommended strategy for effectively and efficiently
using revenue from the affordable housing sales tax to add affordable housing inventory in
Jefferson County during the next several years. A copy of the "Strategy for Permanent
Affordable Housing" is enclosed with this Agenda Request.
The City/County Housing Task Force as well as the Joint Oversight Board on homeless and
affordable housing each reviewed the draft Strategy for Permanent Affordable Housing, and
each passed motions recommending that the Board of County Commissioners proceed to
consider adopting a 1/10 of 1% sales tax for affordable housing under RCW 82.14.530, but added a
recommendation that in implementing and using the sales tax, that the County do so consistent with
the draft Strategy for Permanent Affordable Housing.
If the Board of County Commissioners enacts the proposed Ordinance, staff will work to
implement a related motion adopted by the Board of County Commissioners on November 23,
2020, which directs staff to develop an administrative and policy framework for
implementation and use of the sale tax, guided by the November 12, 2020 draft strategy for
permanent affordable housing; and which also directs staff to begin negotiations with the City
of Port Townsend for a potential amendment to the 2018 interlocal agreement for this
purpose.
FISCAL IMPACT: The proposed affordable housing sales and use tax of 1/10th of 1% is
equal to $1 on a $1,000 purchase. If a sales tax for Affordable Housing is enacted in Jefferson
County, the soonest the tax could go into effect is April 1st of 2021. The County would begin
receiving that revenue in June (there is a two -month lag). During 2021 (June -December) it is
estimated the County would receive $350,000-$370,000 for affordable housing. In 2022 and
every year thereafter, the County would receive a full 12-months of revenue for affordable
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housing, or about $600,000 per year, depending on the economy. Over time, this amount
would likely rise, as the annual value of retail sales grows.
RECOMMENDATION: Staff recommends that the Board of County Commissioners hold
the public hearing, take public testimony, deliberate on the hearing record, and adopt the
ordinance with or without changes.
ATTACHMENTS:
• ATTACHMENT 1 — PROPOSED ORDINANCE
ATTACHMENT 2 — STRATEGY FOR PERMANENT AFFORDABLE HOUSING
REVIEWED BY:
.r1•�iiir . m. s
Date
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ATTACHMENT 1 — PROPOSED ORDINANCE
JEFFERSON COUNTY
STATE OF WASHINGTON
AN ORDINANCE IMPOSING AN ADDITIONAL }
SALES AND USE TAX OF ONE -TENTH OF ONE }
PERCENT FOR HOUSING AND RELATED }
SERVICES AS AUTHORIZED BY RCW 82.14.530; } ORDINANCE NO.
ADDING A NEW CHAPTER 3.33 TO JEFFERSON }
COUNTY CODE; PROVIDING SEVERABILITY; }
AND ESTABLISHING AN EFFECTIVE DATE }
WHEREAS, in the 2020 Regular Session, the Washington State Legislature approved,
and the Governor signed, House Bill 1590 (Chapter 222, Laws of 2020), which amended RCW
82.14.530 Sales and Use Tax For Housing And Related Services; and
WHEREAS, as amended, RCW 82.14.530 authorizes the governing body of a city or
county to impose a local sales and use tax for affordable housing and related services; and
for:
WHEREAS, pursuant to RCW 82.14.530(2)(a), at least 60% of the revenue must be used
i) constructing affordable housing or facilities providing housing -related services,
where the housing or facilities providing services are provided to people whose
income is 60% or less of the county median income and who are within specified
population groups listed in RCW 82.14.530(2)(b);
ii) constructing mental and behavioral health -related facilities; or
iii) funding the operations and maintenance costs of new units of affordable
housing, of facilities where housing -related programs are provided, or of newly
constructed evaluation and treatment centers; and
WHEREAS, pursuant to RCW 82.14.530(2)(c), the remaining revenue from the sales and
use tax must be used for the operation, delivery, or evaluation of mental and behavioral health
treatment programs and services or housing -related services; and
WHEREAS, pursuant to RCW 82.14.530(6)(b), no more than 10% of the revenue may be
used to supplant existing local funds; and
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ATTACHMENT 1 — PROPOSED ORDINANCE
WHEREAS, as referenced in RCW 82.14.530(4), Jefferson County imposed a sales and
use tax for chemical dependency or mental health treatment services or therapeutic courts
county -wide pursuant to RCW 82.14.460 in 2005, which is before October 9, 2015, and the
City of Port Townsend did not impose the tax authorized by RCW 82.14.460 prior to October 9,
2015; and
WHEREAS, on July 31, 2017, the Jefferson County Board of Commissioners adopted
Resolution No. 35- 17, finding " that an emergency exists with respect to the availability of
housing that is affordable to low-income households and with respect to the availability of
housing that is affordable to very low-income households in Jefferson County," and has
determined that imposing the sales and
WHEREAS, the housing affordability problem and its impact to increase homelessness
in Jefferson County has continued to get worse since 2017, and requires prompt attention to
reduce human suffering for County residents; and
WHEREAS, over the course of two months, five local affordable housing provider
organizations — the Peninsula Housing Authority, Olympic Community Action Programs,
Bayside Housing Services, DOVE House, and Habitat for Humanity of East Jefferson County —
worked with City and County staff to develop a blueprint for how new revenue from an
affordable housing sales tax authorized by House Bill 1590 could be used to create permanent
affordable rental and resident -owned housing in the initial years if a sales tax were passed, and
how this revenue could be managed effectively in the longer term to create affordable housing
in Jefferson County, which the organizations summarized in a Draft Strategy For Permanent
Affordable Housing; and
WHEREAS, on November 13, 2020, the Joint Oversight Board of the City and County
transmitted to the Board of County Commissioners its recommendation that the Board
consider adopting a 1/10th of 1% Sales Tax for Affordable Housing under RCW 82.14.530,
consistent with the draft strategy for permanent Affordable Housing.; and
WHEREAS, on December 7, 2020, the Port Townsend City Council voted unanimously to
adopt City Resolution No. 20-063 urging the Jefferson County Board of Commissioners to
consider imposing the sales and use tax for housing and related services authorized by RCW
82.14.530 guided by the draft housing strategy developed in partnership by the City, County
and providers; and
WHEREAS, there is an urgent need for additional affordable housing in Jefferson
County;
WHEREAS, the Jefferson County Board of Commissioners held a duly noticed Public
Hearing on December 21, 2020 to take testimony for and against a proposed ordinance to levy
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ATTACHMENT 1 — PROPOSED ORDINANCE
a one -tenth of one percent sales and use tax for housing and related services as authorized by
RCW 82.14.530, and deliberated on the hearing record; and
WHEREAS, Jefferson County has determined that the tax should be imposed and that
the proceeds will be used solely for purposes authorized by RCW 82.14.530;
NOW, THEREFORE, Jefferson County Board of Commissioners hereby ordains as
follows:
Section 1. Additional Sales and Use Tax Imposed. A new Chapter 3.33 is hereby added to the
Jefferson County Code imposing the one -tenth of one percent sales and use tax authorized by
RCW 82.14.530, and shall read as follows:
Chapter 3.33
ADDITIONAL SALES AND USE TAX - HOUSING AND RELATED SERVICES
(1) Tax Imposed. There is hereby imposed an additional sales and use tax, separate and
apart from any other sales and use tax imposed by this title, upon every taxable event
occurring in the County, to be used for housing and related services as authorized by
RCW 82.14.530.
(2) Applicability of Tax. As used in this section, the term "taxable event" has the same
meaning as in RCW 82.14.020(3), as it now exists or may be amended.
(3) Rate of Tax. The rate of the sales and use tax imposed by this chapter shall be one -
tenth of one percent of the selling price, in the case of a sales tax, or the value of the
article used, in the case of a use tax.
(4) Administration and Collection. The tax shall be imposed upon and collected from those
persons from whom the state sales tax or use tax is collected pursuant to Chapter
82.08 RCW and Chapter 82.12 RCW.
(5) Use of Funds. Moneys collected from the tax shall be used solely for those housing and
related services authorized by RCW 82.14.530, as it now exists or may be amended.
(6) Administration of Funds. The Funds shall be collected in a Jefferson County fund
dedicated to affordable housing, and shall be administered by the Board of County
Commissioners or the Board's designee.
Section 2. Severability. If any section, sentence, clause or phrase of this ordinance should be
held to be invalid or unconstitutional by a court, board or tribunal of competent jurisdiction,
such invalidity or unconstitutionality shall not affect the validity or constitutionality of any
other section, sentence, clause or phrase of this ordinance.
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ATTACHMENT 1 — PROPOSED ORDINANCE
Section 3. Effective Date. This ordinance or a summary thereof consisting of the title shall be
published in the official newspaper of the County and shall take effect and be in full force five
(5) days after publication, provided, that pursuant to RCW 82.14.055 the additional sales and
use tax imposed by Section 1 shall apply only to taxable events occurring on and after April 1,
2021.
Section 4. Code Reviser. The Code Reviser shall codify this ordinance as a separate chapter in
Title 3 Revenue And Finance of the Jefferson County Code, namely as Chapter 3.33 JCC.
SEAL:
ADOPTED this day of 2020, at p.m.
JEFFERSON COUNTY
BOARD OF COUNTY COMMISSIONERS
Greg Brotherton, Chair
Kate Dean, Member
David Sullivan, Member
ATTEST: APPROVED AS TO FORM:
Carolyn Gallaway, Date
Deputy Clerk of the Board
Philip C. Hunsucker, Date
Chief Civil Deputy Prosecuting Attorney
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ATTACHMENT 2 — STRATEGY FOR PERMANENT AFFORDABLE HOUSING
JEFFERSON COUNTY STRATEGY `01' ),
FOR PERMANENT AFFORDABLE HOUSING ��.
Unlocking the Potential of House Bill 1590
1. PURPOSE & SUMMARY
This Strategy for Permanent Affordable Housing in Jefferson County represents the consensus
of five independent organizations in Jefferson County with the expertise and a mission to
create affordable housing and supportive services to serve local residents. This Strategy for
Permanent Affordable Housing is a blueprint for how approximately $600,000 per year in new
revenue for affordable housing could be used to create permanent affordable rental and
resident -owned housing in the initial years, and how this revenue could be managed effectively
in the longer term to create affordable housing in Jefferson County.
Jefferson County has an affordable housing crisis. High cost and limited inventory of both
owned and rental units is resulting in substandard living situations and homelessness. It is
forcing local workers to find housing in neighboring counties and commute here, and local
businesses are facing a labor shortage which is stifling local economic development. A number
of our schools are seeing declining enrollment, because families with children can no longer
afford to live here. If this trend continues without intervention, it threatens the very identity
and fabric of our community.
The lack of entry-level permanent affordable housing leaves vulnerable people stuck in shelter
and transitional housing, unable to move forward with their lives. At the same time, it denies
other homeless and vulnerable people who are even worse off from having access to those
existing shelter and transitional services, because there is no room. Rather than create a larger
parking lot for people stuck at the very bottom of the housing continuum, revenue from a HB
1590 sales tax for affordable housing can be targeted at creating first -level entry into
permanent affordable housing.
Over the course of two months of weekly meetings, five organizations — Peninsula Housing
Authority, Olympic Community Action Programs (OlyCAP), Bayside Housing Services, DOVE
House, and Habitat for Humanity for East Jefferson County — worked with staff from the City of
Port Townsend and Jefferson County (including Juvenile Services) to consider the feasibility of
using revenue from a potential new sales and use tax under House Bill 1590, to rapidly provide
affordable housing in Jefferson County. Together with City and County staff, these
organizations collaborated on strategies for maximizing the new revenue's effectiveness.
Approximately $600,000 per year would be generated under HB 1590, and could be used to
create an average of between six to ten affordable rental or owned affordable residences for
individuals and families in Jefferson County each and every year.
This is based on looking at an initial suite of six affordable housing projects that are currently in
local development (see Section 4 of this Strategy). With reliable funding, housing organizations
and developers are prepared to develop additional affordable housing projects. "If you fund it,
they will build!"
Over the next ten years, Jefferson County could see as many as 100 permanent affordable
houses and apartment units added to our local housing inventory.
Jefferson County Strategy for Permanent Affordable Housing 11/12/2020 1 of 11
2. HOUSE BILL 1590 & FUNDING FOR AFFORDABLE HOUSING
Background On HB 1590: House Bill 1590 (HB 1590) was enacted by the Washington State
Legislature in 2020. It amends RCW 82.14.530, and authorizes cities and counties to impose a sales
and use tax up to 1/10" of 1% for affordable housing. The tax equals just $1 on a $1,000 purchase.
Sales and use taxes apply to most retail sales of "tangible personal property" within Washington, as
well as purchases delivered here by Internet or mail-order retailers. Services to individuals and
businesses — things like haircuts, medical bills, consultant fees, etc. — are not "personal property,"
and most are not subject to sales tax.
The 1/101h of 1% sales and use tax for affordable housing originally required voter approval, but
under HB 1590, this revenue source may now also be approved by the local legislative body with a
simple majority vote.
At least 60% of the revenue generated by the 1/101h of 1% sales and use tax must be used for:
d) constructing affordable housing and facilities providing housing -related services, solely for
eligible households (as defined below); or
e) constructing mental and behavioral health -related facilities; or
f) funding the operations and maintenance costs of new units of affordable housing and
facilities where housing -related programs are provided, or newly constructed evaluation and
treatment centers.
The affordable housing and housing -related services in a) above must serve only persons whose
income is at or below sixty percent of median income, and who are one of the following:
o Persons with mental illness
o Veterans
o Senior citizens
o Families with children who are homeless (or at -risk of being homeless)
o Unaccompanied homeless youth or young adults
o Persons with disabilities
o Domestic violence survivors
The rest of the revenue (up to 40%) can only be used for housing -related services, or the operation,
delivery and evaluation of mental and behavioral health treatment programs and services, without
the same restrictions of "eligible persons."
The law also allows up to fifty percent of the proceeds to be used to issue and service bonds to
finance the provision or construction of affordable housing, facilities where housing -related
programs are provided, or evaluation and treatment centers. Presently, bonding could generate a
one-time lump sum of approximately $5.25 Million of capital dollars up front. However, bonds
typically are issued for 20 years, and would tie up as much as 50% of each year's revenues for all 20
years. That is a very high opportunity cost in those future years. Consequently, committing to
bonds in the immediate future is not recommended. Instead, the County should only consider
bonding after a long-term strategic affordable housing plan has been developed with public input,
and there is broad public consensus on what project(s) would be funded.
Jefferson County Strategy for Permanent Affordable Housing 2 of 11
Estimated Annual Revenue From HB 1590: A future 1/1011 of 1% sales and use tax for affordable
housing in Jefferson County would behave the same as an.existing 1/10th of 1% sales and use tax for
chemical dependency or mental health treatment services under RCW 82.14.460. The County has
administered that sales tax since 2005.
In 2019, revenue from the chemical dependency and mental health sales and use tax was $612,000.
That was before the COVID-19 pandemic and its effect on the economy. In 2020, the chemical
dependency/mental health sales tax is trending to generate $591,000-$598,000 by year's end. In
future years, the sales tax is expected to generate around $600,000 or more per year.
If a sales tax under HB 1590 for Affordable Housing is enacted in Jefferson County, the soonest the
tax could go into effect is April 111 of 2021. The County would actually begin receiving its revenue in
June (there is a two -month lag). During 2021 (June -December) we would expect the County to
receive $350,000-$370,000 for affordable housing. In 2022 and every year thereafter, the County
would receive a full 12-months of revenue for affordable housing, or about $600,000 per year,
depending on the economy. Over time, this amount would likely rise, as the annual value of retail
sales grows.
3. HOUSING CHALLENGES & PROGRAM OBJECTIVES
In 2017, Jefferson County declared a State of Emergency regarding the Availability of Affordable
Housing for Low and Very Low -Income Households. Since then housing prices in Jefferson County
have continued to rise much faster than inflation, and the availability of rental units has remained
at historic lows, and appears only to have gotten worse.
The declaration in 2017 was based in part upon reports from HUD indicating more than half the
renters in Jefferson County (1,680 of 3,425) are cost burdened, paying more than 30% of their
household income for housing costs, and one in four ( 895 of 3,425) are severely cost -burdened,
paying more than 50% of their income for housing costs. According to OlyCAP, there were less than
600 units of subsidized housing and the waiting list to rent one exceeded 2 years. There is a severe
lack of multifamily dwellings in Jefferson County when compared to the demand.
According to the US Census 12.7% of Jefferson County lives in poverty, as does 16.6 % of the City of
Port Townsend compared to 11.8% for the entire United States. An Assessment by E.D. Hovee listed
the median home price in Jefferson County as $311,000 in 2015. According to a current (October,
2020) posting on an on-line real estate site www.realtor.com, "Recently Sold Homes in Jefferson
County, WA have a median listing price of $415,000."
No new apartments have been built in Jefferson County since 2010. Additionally, 40 apartment
units have been converted to condominiums since 2005. While a small number of condominium
units have been built since 2010, their price has escalated sharply — a 100% price increase between
2015 and 2020, according to the County Assessor.
Jefferson County Strategy for Permanent Affordable Housing 11/12/202C 3 of 11
Despite the current resources and ongoing local efforts, there is a demonstrated need for
additional funding for affordable housing as well as for facilities, services and programs benefitting
vulnerable and low-income populations.
Housing in Jefferson County represents a continuum, from homeless encampments, to homeless
shelters, to transitional housing, subsidized apartments and affordable rentals, entry and affordable
home ownership, on through the full range of market rate housing we see in real estate listings
today.
Market rate
Market rate ownership
Affordable rental r
Affordable
ownership
rental
Transitional
housing
Emergency housing
shelter
■ • i ■ ■ 6.:
Housing options at the bottom of the continuum require full support subsidies by non -profits and
government programs, which decreases as you move up through the continuum.
Typically, you like to see people move through and up the continuum stepwise, as people's financial
stability and well-being improves.
A major problem in Jefferson County today, is the staircase is broken. While upper end market rate
housing is being built, mostly, that is all that's being built. It tends to be homeowners hiring
contractors to build their dream, or developers building speculation homes targeted to the upper
end listing market rather than creating inventory that is open to all levels of potential home
buyers. Hence, there is a shortage of entry- and mid -range homes, and home price increases are
reflecting the shortage.
The table to the right shows median home prices for
Washington State. The Jefferson County Assessor states
it also accurately reflects home price trends in Jefferson
County.
As previously noted, no apartments have been built in
Jefferson County in the past decade. Additionally, rental
housing is being converted into owner -occupied
condominiums, and Air B&Bs.
Median home price in Washington
7ho .d,
5450
5a01
5350
$3x
5250
5200
5350
5200
51'
So
1"5 1997 1999 2x1 2003 2005 2007 2009 2011 ',.._ =015 2017 2019
Washington Office of Finance Management
Jefferson County Strategy for Permanent Affordable Housing 11/12/2020 4 of 11
Housing options in Jefferson County are scarce and costly. We see families who are trying to live
here, needing to resort to actively marketing themselves on bulletin boards and on-line, trying to
encourage a potential landlord or seller to pick them over others, to rent or buy.
The broken housing continuum has its greatest impact on vulnerable populations. In 2017, OlyCAP
changed its homeless shelter model from a Winter Shelter model to a Year -Round Shelter, using the
summer months to do case management to move people out of homelessness, into transitional or
permanent housing. The first summer was very successful, and they were able to move eight
individuals out of homelessness. As the inventory of affordable housing has gotten worse, there is
no housing into which to move Shelter residents out of homelessness. Consequently, the Shelter is
full, and continues to serve the same individuals year over year, and there is very little opportunity
for new people to come in out of the cold.
Bayside Housing Services provides transitional housing for people who have been homeless or are
facing homelessness. Of the last 100 people Bayside transitioned from its facility in Hadlock to
permanent housing, all but 5 had to be placed outside Jefferson County. In addition, there is a
backlog of vulnerable people waiting to get into Bayside's facility, but can't, because Bayside cannot
find homes for their current clients to move to.
4. INITIAL FOCUS: BREAKING THE IMPASS BY CREATING ENTRY-LEVEL PERMANENT HOUSING
The lack of entry-level permanent affordable housing leaves vulnerable people stuck in shelter and
transitional housing, unable to move forward with their lives. At the same time, it denies other
homeless and vulnerable people who are even worse off from having access to those existing
shelter and transitional services, because there is no room.
Rather than create a larger parking lot for people stuck at the very bottom of the housing
continuum, revenue from a HB 1590 sales tax for affordable housing can be targeted at creating
first -level entry into permanent affordable housing, which hopefully will enable people to continue
to move up from there. This borrows from the insight gained through the housing first model: if
people have stable secure permanent housing, they function better, are better able to take care of
themselves, pursue employment and advance themselves through training and education, plant a
garden, and better, more fully integrate with society. The picture below, a graphic borrowed from
another jurisdiction, illustrates the concept of this Strategy.
Key Area of Focus for Rental
and Affordable Housing
Non -Market Housing
Emergency Supportive Soci
Shelters & Housing and C p
Transitional Hous: t
Housing
Low to Moderate Income Households
up to 60%ol Median Househord Income
-►
Jefferson County Strategy for Permanent Affordable Housing 5 of 11
Some Examples of Candidate Projects: County and City staff asked local public and non-profit
housing providers as a group to identify projects that would fit and implement this Strategy, and
that were projects of a scale that revenue from a HB 1590 affordable sales tax could conceivably
fund. The purpose wasakwo-fold: to test whether a sales tax could actually rest ". in meaningful
affordable housing projects, and also to begin to prime the pump with these organizations to
develop additional affordable housing projects in Jefferson County.
Together, the organizations quickly found consensus on a list of six examples of the kinds of
permanent housing projects that a HB 1590 sales tax could fund. These six examples are displayed
in TABLE 1 on the next page, and summarized in more detail in ATTACHMENT 1. The projects were
already in different stages of development.
The examples feature a variety of housing types:
• a rental boarding house with 6 rental units,
• supported apartments for young adults 17-24, with 5 one and two bedroom units,
• affordable home ownership for individuals and families, either through a community land
trust, or through down payment assistance and title covenants, and finally,
• supported crisis dormitory housing to stabilize at -risk 12-17 year olds in preparation for
rapid return to permanent housing.
Populations served would include:
• Low income people at or below 60% of area median income (AMI), including low wage
workers;
• Individuals and families;
• Veterans;
• Senior Citizens
• Domestic Violence Survivors
• Persons with Behavioral Health or Other Disabilities
• Families with children at risk of homelessness;
• Young Adults 17-24 years old, who are homeless or at risk becoming homeless;
• At -risk Youth 12-17 years old, who are homeless or at risk becoming homeless.
Please see TABLE 1 on the next page for more information about these initial examples of projects
that could quickly use and leverage revenues from HB 1590 to create permanent affordable
housing.
Jefferson County Strategy for Permanent Affordable Housing 11/12/2020 6 of 11
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Relation to the Local Five -Year Homeless Housing Plan: In 2019 Jefferson County adopted its
local five-year homeless housing plan "Making Homelessness a Singular Occurrence" pursuant
to Chapter 83.185C RCW. The local five-year plan (the Plan) includes an assessment of the
housing affordability crisis in Jefferson County similar to that described here, and describes the
extent of homelessness and existing available services. The Plan lays out six objectives and
actions to meet them, to help reduce homelessness in Jefferson County.
This Strategy for Permanent Affordable Housing was developed in reference to the Five -Year
Plan as a fundamental touchstone. This Strategy helps carry out a number of the Plan's
objectives and implementing actions.
One key objective in the Five -Year Plan is "Objective #6: Supportive Efforts Aimed at Ending
Homelessness." The Plan lists 15 actions geared to meet that objective. This Strategy for
Permanent Affordable Housing, and the project examples it lists at up to 60% AMI, are aligned
to carry out 6 of those 15 actions:
• "Increase funding for affordable housing for those under the 50% of the AMI,"
• "Increase work force housing units for those between 50-80% of the AMI,"
• "Increase market rate rental units,"
• "Increase youth hostel/boarding rooms for ages 18-24,"
• "Create a Host family network for Youth," and
• "Build houses for those earning between 30-80% of the AMI."
Implementing this Strategy would also target carrying out key provisions of the Five -Year
Homeless Housing Plan.
S. PROCESS, AWARDS, POLICY DIRECTION, MANAGEMENT & ACCOUNTABILITY
How should $600,000 per year of funding from an affordable housing sales and use tax under
HB 1590 be managed and awarded to benefit the community?
Revenue would be received by the Jefferson County Treasurer and deposited in a County
dedicated affordable housing fund. All expenditures from the fund would be for affordable
housing, and subject to direction by, and prior approval of, the County Commissioners, who
would retain oversight and ultimate accountability for the use of the funds.
For administrative efficiency and maximum transparency, it is recommended that the County
Commissioners harness the existing Housing Task Force and Joint Oversight Board, both of who
meet in open public meetings, to help with vetting as affordable housing projects are
recommended through an annual Request For Proposals (RFP) cycle, described below.
Jefferson County Strategy for Permanent Affordable Housing 11/12/2020 8 of 11
To support the Housing Task Force and Joint Oversight Board and provide technical expertise in
the RFP process, the County Commissioners should appoint a separate Technical Evaluation
Committee. It would be composed of individuals with technical expertise in affordable
housing, development, finance, and related fields, and who are independent of any local
housing organizations and projects. The Technical Evaluation Committee would help county
staff draft an RFP that would get vetted through the Housing Task Force and Joint Oversight
Board. They would also conduct the technical evaluation and scoring of all proposals, which
would carry forward throughout the same vetting process, up to the Commissioners.
To guide the RFP process, and prior to the first round, the County Commissioners should adopt
a Resolution establishing clear strategic guidelines for the intended use of the funds, such as
what niches of the housing continuum to focus on, the kinds of projects or uses that they'd like
to be eligible, and targeted populations. The Resolution would be developed with input from
the Technical Evaluation Committee, Housing Task Force, and Joint Oversight Board, and would
be updated periodically in future years, as changing conditions warrant.
The Joint Oversight Board and Housing Task Force were created through a 2018 Interlocal
Agreement (ILA) between the County and the City of Port Townsend to facilitate County/City
coordination on solutions to our shared housing problems. The Joint Oversight Board (JOB)
includes one elected representative of the City Council and one elected representative of the
County Commissioners. The two elected officials select three members of a Local Homeless
Housing Task Force to join them on the JOB. The JOB recommends to the County
Commissioners the budgets and expenditures out of Fund 148 (Affordable Housing) and out of
Fund 149 (Homeless Housing), as well as affordable housing goals.
In January of 2020, Amendment No. 1 to the ILA was executed by the County and City to
include revenues for affordable housing authorized by Substitute House Bill 1406.
It is recommended that the County work with the City to propose an Amendment No. 2 to the
ILA, so that the County can utilize the existing JOB and Housing Task Force structure for HB
1590 as described above. It is recommended that projects utilizing HB 1590 revenues be
vetted and recommended through an RFP process that is separate from that for the existing
recording fees. This is to recognize the different requirements for use of the two funding
sources under State law, the unique nature of capital projects to build affordable housing, and
to allow the HB 1590 revenue to be utilized in a separate strategic fashion, pursuant to an
affordable housing strategy Resolution adopted by the County Commissioners as described
above.
We are confident in this model, after two rounds of successful RFPs administered by County
staff, using the Housing Task Force and Joint Oversight Board. They successfully gave input on
the RFP itself, and helped vet and rank the resulting proposals. Funding recommendations
were made by vote of the full Housing Task Force and then the Joint Oversight Board, prior to
consideration and final award by the Board of County Commissioners.
Jefferson County Strategy for Permanent Affordable Housing 11/12/2020 9 of 11
Under the existing model, after Commissioner approval of award recommendations, County
staff prepares contracts with project sponsors, and presents the contracts for subsequent
approval by the County Commissioners.
County staff administers the contracts, and reviews, approves, and processes all invoices to
ensure they are consistent with each contract, prior to payment, which also gets approved by
the County Commissioners.
6. CONCLUSION
This Strategy for Permanent Affordable Housing in Jefferson County represents the consensus
of five independent organizations in Jefferson County who provide affordable housing and
supportive services to serve local residents, along with County and City executive staff. In
examining existing gaps in the housing continuum in Jefferson County, the group determined
that revenue from a HB 1590 sales tax for affordable housing should be targeted at creating
entry-level permanent affordable housing. This is the core principal of this Strategy. Further,
the group determined that the community is well prepared to effectively use the
approximately $600,000 per year in new revenue generated under HB 1590 to create
permanent affordable rental and resident -owned housing in Jefferson County.
We found consensus on six sample projects that are currently in development as worthy
prospects for putting the funding to immediate use. We sincerely hope the community will
submit additional affordable housing projects by the time an actual Request For Proposals is
issued.
In the initial years of funding, we recommend the funding be strategically used to break the
logjam at the entry steps to affordable rental and owned housing, so that low-income and
vulnerable people currently stuck in shelter and transitional housing can move into permanent
housing, and so lower wage workers can afford to live and work in Jefferson County.
Jefferson County already successfully administers Fund 148 (Affordable Housing) and Fund 149
(Homeless Housing) using the Joint Oversight Board and Housing Task Force under a County -
City Interlocal Agreement. This existing structure can be harnessed and adjusted to administer
revenues and expenditures for affordable housing under HB 1590, by amending the ILA,
appointing a Technical Evaluation Committee, and periodically adopting strategic guidelines to
ensure the HB 1590 funds and projects are best targeted to meet current community
affordable housing needs.
ATTACHMENT 1: Examples Of Local Projects That Could Be Funded To Create Permanent
Affordable Housing In Jefferson County
Jefferson County Strategy for Permanent Affordable Housing 10 of 11
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