Bellingham hopes to lure more builders to low-income housing program

A program to create more affordable housing in the city could get revamped to make the incentives more attractive.

The City Council will hold a public hearing on the home ownership program at 7 p.m. Monday, Feb. 23, at City Hall, 210 Lottie St.

Under the program, which began in 2004 and has been renewed several times since, builders were allowed to put more houses into a given space, potentially boosting their return on investment. The builder in turn would sell only to people who made less than 80 percent of the area’s median income.

Only two projects — a total of 17 homes at Matthei Place and 2939 Lafayette St. — were approved under the program. Both were by Kulshan Community Land Trust, which met a program requirement to keep the homes permanently affordable. Kulshan homes increase in value at a rate of 1.5 percent a year, which is typically less than the market rate.

According to city staff, requiring permanent affordability could have been one reason why the program was used only twice, and by only one organization. Proposed changes would reduce the affordability requirement to 50 years and allow 25 percent of the homes to be bought and sold at market rates.

“In general, a healthier community and development is one where there is a mix of incomes,” wrote David Stalheim, the city’s block grant programs manager, in a Feb. 11 memo to Mayor Kelli Linville.

Other changes proposed:

• Make the program itself permanent, rather than renewing it every two years.

• Projects must be within 1/4 mile from a bus stop or urban village.

• New design standards.

• Streamline the process by no longer requiring City Council approval.

More information can be found in the agenda for the Monday, Feb. 23, meeting at cob.org/meetings.