STAFF REPORT NO

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Benedict Townsend
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1 #2 STAFF REPORT NO TO: Mayor and City Council DATE: 4/11/2016 FROM: Dave Mercier, Deputy City Manager Subject: A resolution declaring the existence of an emergency with regards to very low-income housing under RCW and directing staff to develop an affordable housing financing plan to be presented to Council. Key Points: Conditions in Vancouver are indicative of a citywide housing crisis, including: o an unusually low vacancy rate (less than 2 percent); o the fastest rent growth in the nation; o high housing cost burden for very low-income renters; and o significant numbers of homeless individuals, families and children. Creating a locally controlled fund for affordable housing is a high-priority option recommended by the Affordable Housing Task Force to address Vancouver s housing challenges. Council has identified this as the first recommendation to move forward in State law allows cities to enact a property tax levy for affordable housing if approved by voters. Before a levy proposition can be placed on the ballot, the City must declare a housing emergency and develop an affordable housing financing plan for use of potential levy funds. Objective: Declare an emergency with regards to very low-income housing in Vancouver and authorize staff to develop an affordable housing financing plan. Pursuant to RCW , declaration of an emergency and development of a financing plan are required steps that would allow Council to consider placing a levy proposition to fund affordable housing on an upcoming ballot. Present Situation: At the Feb. 22, 2016, Council workshop, creating an affordable housing fund was identified as the first high-priority option recommended by the Affordable Housing Task Force to move forward in After exploring potential revenue sources for an affordable housing fund, a property tax levy was identified as the most practical and timely option. The State of Washington allows cities to enact a property tax levy for affordable housing if such a measure is approved by a majority of voters (RCW ). The maximum allowed rate is $0.50 per $1,000 of assessed value for a period of up to 10 years and funds raised must serve very low-income households. Very low-income is defined as earning up to 50% of the area median income (AMI) in Vancouver. For a four-person household, 50% AMI for Vancouver is $36,750 annually. In order to access levy capacity outside of the current levy rate and utilize additional tax levy funds raised for affordable housing, state law requires that a housing emergency declaration be made.

Staff Report 046-16 4/11/2016 Page 2 of 4 Source: March 2016 Apartment List National Rent Report Beginning in May 2015 and continuing through today, the national rental marketplace Apartment List has

2 Staff Report /11/2016 Page 2 of 4 Source: March 2016 Apartment List National Rent Report Beginning in May 2015 and continuing through today, the national rental marketplace Apartment List has named Vancouver as the city with the fastest rent increases in the nation. Year-over-year rent growth for a two-bedroom unit was 16.7% for the period of December 2014-December 2015 and 11.0% for the period of March 2015-March Several other indicators also point to a housing emergency in Vancouver, including: An estimated 11,675 very low-income renter households are cost-burdened (spend more than 30% of their income on housing costs). This figure includes 2,700 senior households. 1 An estimated 6,855 very low-income renter households are severely cost-burdened (spend more than 50% of their income on housing costs). This figure includes 1,800 senior households. 1 Household incomes are not keeping pace with Vancouver s housing costs. Median household income rose 3.1% over the last five years. In comparison, average rental costs increased by 38.3%. 2 The vacancy rate is currently 1.87%, down from 3.8% in Approximately 687 people are homeless and living in shelters or on the streets in Clark County. 4 1 U.S. Department of Housing and Urban Development Comprehensive Housing Affordability Strategy calculations based on American Community Survey estimates American Community Survey estimates and Norris Beggs & Simpson Multifamily Market Reports Norris Beggs & Simpson Multifamily Market Reports. 4 Preliminary numbers from 2016 Clark County Point-in-Time Homeless Count.

3 Staff Report /11/2016 Page 3 of 4 Four-hundred and thirty-two (432) children who are enrolled in the Evergreen and Vancouver school districts are homeless and living in motels, shelters, or on the street. An additional 1,163 students are couch surfing or living in overcrowded housing. 5 The Vancouver Housing Authority reports that demand for subsidized housing for very low-income households has increased to the point that the Vancouver Housing Authority has had to abandon traditional waiting lists, instead operating a lottery system limited to applicants with the highest needs. Before placing a levy proposition on a ballot, the City must also develop a plan describing how potential funds would be managed and spent. Staff anticipates awarding funds to specific housing projects or programs through a competitive application process that would be rolled into the existing award process for the City s Community Development Block Grant (CDBG) and HOME Investment Partnerships Programs. Funds could support acquisition, construction and preservation of rental housing and housing for people who are homeless, as well as rental assistance and supportive services. If the resolution is approved, additional administrative and financial details, including a proposed levy rate, will be presented to Council in the affordable housing financing plan at a later date (tentatively May 2016). The proposed affordable housing financing plan must be approved prior to any additional taxes being imposed (by December 2016 for a levy beginning January 1, 2017). Advantage(s): 1. Approval of the resolution completes one prerequisite (an emergency declaration) that must be completed before Council could decide to place an affordable housing levy proposition on an upcoming ballot. 2. Approval of the resolution allows City staff to move forward on a second prerequisite (development of an affordable housing financing plan). Such a plan must be developed before Council could decide to place an affordable housing levy proposition on an upcoming ballot. 3. The current timing of this process would allow a levy proposition, if approved by Council, to be placed on the November 2016 ballot. The general election during a presidential election year is likely to have high voter turnout, allowing the proposal to be voted upon by a greater share of Vancouver residents than would be expected in other upcoming elections. 4. If approved by Council and a majority of voters, an affordable housing levy could significantly increase the City s resources to create and preserve housing affordable to very low-income residents. A locally controlled funding source could allow more flexibility for developers and housing providers than currently provided by federal and state funding sources for housing. Disadvantage(s): No disadvantages for the emergency declaration. If an emergency is declared and Council or a majority of voters do not approve an affordable housing levy proposition, staff 5 Washington State Office of Superintendent of Public Instruction Homeless Student Data Reports

4 Staff Report /11/2016 Page 4 of 4 will work to address Vancouver s housing emergency conditions by moving forward on other work plan items resulting from Task Force recommendations. Budget Impact: 1. No impact for the emergency declaration. 2. If at a later time an affordable housing levy proposition is approved by Council and a majority of voters, the levy would increase the City s resources for housing available to households earning up to 50% AMI. Prior Council Review: At February 22, 2016 workshop, directed staff to take steps that would allow Council to consider placing an affordable housing levy on the November 2016 ballot. Action Requested: Adopt a resolution declaring the existence of an emergency with regards to very low-income housing under RCW and directing staff to develop an affordable housing financing plan to be presented to Council. Attachment(s): Resolution. To request other formats, please contact: City Manager s Office (360) WA Relay: 711 Amanda.Delapena@cityofvancouver.us

5 04/11/16 RESOLUTION NO. A RESOLUTION relating to very low-income housing; declaring the existence of an emergency under chapter ; and directing staff to develop an affordable housing financing plan to be presented to Council. WHEREAS, in order for Council to consider placing a ballot proposition on an upcoming ballot, RCW requires a declaration of the existence of an emergency with respect to the availability of housing that is affordable to very low-income households; and WHEREAS, a declaration of the existence of an emergency with respect to the availability of housing that is affordable to very low-income households is one of the required steps that would allow the City to put forward a ballot proposition, which if approved, would authorize an additional regular property tax levy to fund affordable housing for very low-income households; and WHEREAS, if approved, this additional regular property tax levy to fund affordable housing for very low-income households would not apply towards the existing property tax levy cap; and WHEREAS, a healthy community is one in which the basic needs of all members are met, including access to safe, affordable homes; and WHEREAS, supporting safe, affordable housing and services for very low-income households is a strategic commitment the City Council has made to meet the needs of Vancouver residents; and RESOLUTION - 1

6 WHEREAS, Vancouver currently has a lower than 2 percent vacancy rate for all rental units in the City; and WHEREAS, U.S. Census data has estimated that there are 11,675 very low-income renter households in Vancouver that face a housing cost burden by paying more than 30 percent of their income for housing costs; and WHEREAS, U.S. Census data has estimated that there are 6,855 very low-income renter households in Vancouver that face a severe housing cost burden by paying more than 50 percent of their income for housing costs; and WHEREAS, an estimated 1,800 very low-income senior renter households in Vancouver pay more than 50 percent of their income for housing costs; and WHEREAS, according to the annual Point-in-Time Count, 231 people are homeless and living on the streets in Clark County, an increase of 12.1 percent from last year; and WHEREAS, according to the annual Point-in-Time Count, an additional 456 people are homeless and living in shelters in Clark County; and WHEREAS, the State of Washington reports that 432 children enrolled in the Evergreen and Vancouver school districts are homeless and living in motels, shelters, or on the streets, with adverse childhood experiences that have profound and long-lasting negative consequences; and WHEREAS, an additional 1,163 children enrolled in the Evergreen and Vancouver school districts are couch surfing or living in overcrowded housing; and WHEREAS, the demand for subsidized housing for households earning less than 50% of Area Median Income has increased to the point that the Vancouver Housing Authority has had to RESOLUTION - 2

7 abandon traditional waiting lists and operate a lottery system limited to applicants with the highest needs; and WHEREAS, household incomes are not keeping pace with Vancouver s housing costs, with average apartment rent increasing 38.3 percent over the last five years while median household income increased by only 3.1 percent; and WHEREAS, according to data from the national rental marketplace Apartment List, Vancouver is experiencing the highest year-over-year rent increases in the nation; and WHEREAS, workers whose only affordable housing options are far from employment centers face long commutes with associated pollution, congestion, and transportation expenses; and WHEREAS, the Vancouver Affordable Housing Task Force concluded nine months of deliberation about policies to promote housing affordability with a set of priority recommendations that included the creation of additional local revenue sources that assist in the delivery of affordable housing to very low-income households; and WHEREAS, as a condition of receiving federal funding for very low-income housing, the City of Vancouver administers an affordable housing program with citizen participation, including preparation of five-year strategic plans, performance measures and outcomes, and annual action plans; and WHEREAS, RCW authorizes a city to impose additional regular property tax levies to finance affordable housing for very low-income households when specifically authorized to do so by a majority of the voters of the taxing district voting on a ballot proposition authorizing the levy; and RESOLUTION - 3

8 WHEREAS, RCW authorizes a city to assist in the development or preservation of publicly or privately owned housing for low-income persons by providing loans or grants of general municipal funds to the owners or developers of the housing, including loans or grants to finance the acquisition, construction or rehabilitation of low-income housing, and to provide rental assistance and other supportive services, to low-income persons. NOW, THEREFORE, BE IT RESOLVED BY THE CITY OF VANCOUVER: Section 1. The recitals set forth above are adopted as findings supporting the action of the City Council in adopting this resolution. Section 2. Findings. The City Council makes the following findings and declares as follows: A. Affordable housing for very low-income households, including the homeless, other persons with special needs, families and seniors, often requires a commitment of City funds for development or preservation, or other forms of assistance. B. Very low-income household means a single person, family, or unrelated persons living together whose income is at or below fifty percent (50%) of the median income, as determined by the United States Department of Housing and Urban Development (HUD), with adjustments for household size, for the county where the taxing district is located. Fifty percent of the median income is $36,750 for a four-person household in Vancouver according to 2015 income limits from the U.S. Department of Housing and Urban Development. C. An emergency exists with respect to the availability of housing that is affordable to very low-income households in the City of Vancouver. RESOLUTION - 4

9 Section 3. Very Low-Income Housing Administrative and Financing Plan. A. The City Manager or designee shall prepare a Very Low-Income Housing Administrative and Financing Plan ( Plan ). The Plan shall cover the period commencing in 2017 and continuing through 2024 with an annual review; shall specify the plan for use of potential funds raised under a levy authorized by RCW ; and shall be consistent with either the locally adopted or state adopted comprehensive housing affordability strategy, required under the Cranston- Gonzalez national affordable housing act (42 U.S.C. Sec , et seq.), as amended, pursuant to RCW B. The Plan shall be presented to City Council prior to considering the placement of a very low-income housing levy proposition on an upcoming ballot. C. The expenditure of potential funds raised pursuant to this resolution shall be as set forth in the Plan, which must be adopted by City Council prior to any additional property tax levy being imposed pursuant to RCW The Plan should be done in coordination with the Consolidated Plan and Annual Action Plans required by HUD for expenditure of HOME and CDBG funds for the benefit of very low- income housing and community development needs in the City. Section 4. Severability. If any section, sentence, clause or phrase of this resolution should be held to be invalid or unconstitutional by a court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the validity or constitutionality of any other section, sentence, clause or phrase of this resolution. ADOPTED at regular session of the Council of the City of Vancouver, this day of, RESOLUTION - 5

10 Timothy D. Leavitt, Mayor Attest: R. Lloyd Tyler, City Clerk By: Carrie Lewellen, Deputy City Clerk Approved as to form: E. Bronson Potter, City Attorney RESOLUTION - 6

Proposed Vancouver Affordable Housing Fund

Proposed Vancouver Affordable Housing Fund May 2, 2016 Council Workshop Peggy Sheehan, Community and Economic Development Programs Manager Carrie Lewellen, City Treasurer Overview Background Housing needs