Submitted by the San Juan County Housing Advisory Committee.
A local program, the San Juan County Home Fund, is playing a significant role in addressing the County’s severe shortage of affordable housing. In 2018, voters approved a 0.5% real estate excise tax (REET) specifically to help fund affordable housing. This one-time fee, which is mostly paid by the buyer at the time of a real estate sale, does not increase property tax.
San Juan County continues to have the highest median house price ($887,500) and lowest Housing Affordability Index of any county in Washington. This directly or indirectly affects everyone who lives or works in San Juan County as well as island businesses that cannot hire or keep employees because there is no place they can afford to live. Voters recognized this problem and took the extraordinary step of creating a local Home Fund, which has now been in effect for three years.
Between January 2019 and December 2021, the Home Fund distributed just under $3 million in support of local housing efforts and has already committed another $3 million. So far, some 102 rental or owned housing units have been or will be acquired, built, or rehabilitated with the help of these funds.
The Home Fund is managed by the County Department of Health & Community Services, with oversight and direction from the County Council and its volunteer Housing Advisory Committee (HAC). The Home Fund’s Administrative and Financial Plan sets priorities and establishes guidelines for administration of the program. The HAC reviews grant applications and makes recommendations to the Council on the annual distribution of awards and related matters.
There have now been three full grant cycles for the program, which seems like an appropriate time to look at how the Home Fund has been working and what it has been able to accomplish.
Home Fund Revenues
Thus far, the amount of revenue that has come into the program is more than originally projected, due to robust real estate sales, which have increased every year as shown below.
2019 $1,889,887
2020 $2,835,955
2021 $3,375,463
Total $8,101,305
Ironically, housing organizations face challenges that are compounded by the same real estate boom that has allowed REET revenue to increase. Land costs continue to rise, new construction is more expensive than ever, and the gap between what a working person can afford to pay and the cost of creating housing continues to grow. Moreover, because the majority of a project’s costs is required to come from sources other than the Home Fund, these organizations must still seek federal and state grants as well as private donations. Notably, the Home Fund has leveraged an additional $25,881,588 in non-County funding, the total cost of projects augmented by the Home Fund. These dollars likely would not have been invested in our community for affordable housing were it not for the Home Fund.
Despite challenges, a pipeline of eligible projects has emerged, and REET funding has been going out the door, taking advantage of opportunities to strengthen affordable housing projects throughout San Juan County. In its first three years, the County has approved grants to preserve existing rental housing, to construct new rental housing, to preserve permanently affordable homes, and to construct new permanently affordable home ownership homes.
Each year so far, the HAC has recommended, and the County Council approved, funding for multiple eligible projects that are ready to go, allowing more housing to be created as quickly as possible. In just three years, the Home Fund has allocated a total of $6,670,973 and facilitated projects on all three major islands (see below). As of January 2022, an additional $1.5 million remains uncommitted and available for future grants.
Home Fund Projects to Date
On Lopez Island:
• Housing Lopez received $700,836 for construction of Fish Bay Cottages six new rental units.
• Lopez Community Land Trust received $232,000 for construction at Salish Way, four new home ownership units.
On San Juan Island:
• The Harborview Apartments, purchased by the Opportunity Council, received two grants ($695,225 total), one for preservation of existing rental units, and another to remedy long-term drainage problems in the parking lot and upgrade the units.
• San Juan Community Home Trust received $80,612 to help replace roofs on permanently affordable homes in the Salal neighborhood.
• New construction funds in the amount of $1.6 million have been allocated to San Juan Community Home Trust for eight new units, Holliwalk, to be built on donated land on Price Street in Friday Harbor.
• $500,000 was allocated to fund site improvements for a parcel of land owned by San Juan County on Argyle Avenue in Friday Harbor so the property can be developed with affordable rental housing.
On Orcas Island:
• OPAL Community Land Trust received $1.75 million for April’s Grove Townhomes, a new 45-unit rental project completed in 2021.
• OPAL was awarded $1,112,300 to help purchase the Northern Heights Apartments and rehabilitate 12 existing rental units.
Members of the Housing Advisory Committee: Anne Bertino and George Zweibel, Orcas Island; Sandy Bishop and Melora Hiller, Lopez Island; and Nancy DeVaux, Farhad Ghatan and Colin Huntemer, San Juan Island.
To learn more about the Home Fund, please go to https://www.sanjuanco.com/1595/San-Juan-County-Home-Fund.
