Bellingham moves to stretch dollars for low-income housing

The city has taken another step in its efforts to encourage organizations to build low-income housing — and stretching dollars for such projects in the process.

The decision made by the City Council in June to do so is being cheered by groups trying to build affordable housing in Bellingham, where a low rental vacancy rate and high rents make it tough to get their clients into housing.

“We can’t build this kind of housing without financial help from the public sector,” said Bill Rumpf, president for Mercy Housing Northwest, noting that costs can’t be recouped by charging tenants.

Lowering costs also would help make Mercy Housing more competitive for state housing funds, he added.

The organization wants to build the 80-unit Eleanor Apartments, 405 E. Champion St., for seniors.

“We will be charging rent from $350 to $600 a month,” Rumpf said, adding that renters would have an annual income of $14,000 to $26,000. “We do need financial assistance to do that. It’s a crucial piece.”

As it has in the past, the city could help by considering an exemption of up to 80 percent from impact and hookup fees.

What’s different, moving forward, is that the city can offer that waiver without having to pay impact fees back from other public funds, such as it did with the general fund before the recession hit in 2008, or with money from federal grants or the housing levy approved by Bellingham voters in 2012 for low-income housing.

That’s thanks to changes made by state legislators in 2012.

“It can help significantly,” said David Stalheim, block grant programs manager for the city if Bellingham, of the exemptions.

There are four projects to build low-income housing that have gone before the City Council that are eligible for the waiver.

“The logic is at that lowest end it makes sense for local government to do what we can to change the cost and profitability to build that truly affordable housing,” Bellingham City Councilman Michael Lilliquist said. “In exchange for lowering those costs, we require a public benefit.”

Of those four, a 50-unit project from Catholic Housing Services is going through permitting. An 80 percent exemption would shave $421,306 in fees from the farm-worker housing project, which is called Bakerview Family Housing.

The city already is providing about $1.5 million in financial assistance to that project, and the impact and hookup fees of $526,632 make up 34 percent of that total.

“We would give them money and take money back,” Stalheim said. “What we’re trying to do is we’re trying to find ways to stretch our own dollars that we put toward housing.”

Northwest Youth Services, which wants to build 10 units of housing for young adults on its North State Street property, would save $65,000 in impact fees alone.

“Any reductions we can have is great,” said Riannon Bardsley, executive director of Northwest Youth Services. “I know if it’s at all possible for the limited housing money that’s available to actually go toward building the housing and not toward the fees associated with it, we will be able to create more units.”

The fees go toward transportation, parks and schools as well as storm, water and sewer. An exemption from the school impact fees must be approved by the Bellingham School District. If the property is taken out of low-income housing in the future, then the property owner would have to pay the impact fees in effect at that future date.

Lilliquist doesn’t expect there to be so much low-income housing built that it would cause a problem for those funds. And if it becomes an issue, the city will take another look at the exemptions.

“There’s no way in which the city is forced to give these waivers,” he said.

Reach Kie Relyea at 360-715-2234 or kie.relyea@bellinghamherald.com.