Olympia one step closer to putting the Home Fund sales tax increase on the ballot

The Olympia City Council is poised to place a sales tax increase, intended to alleviate homelessness, on the February 2018 ballot.

The idea for the Home Fund has been before the city more than once — and this summer the council discussed its intention of placing the measure on the ballot. But on Tuesday, the council discussed for the first time how the Home Fund would be managed and how the estimated $2.3 million collected each year could be spent.

Keith Stahley, the city’s director of community planning and development, presented a draft of the Home Fund’s plan to the council at a Monday evening work session. A resolution to place the Home Fund measure, a 0.1 percent sales tax increase, on the ballot will go before the council next week.

The goal is to move the most vulnerable people off of the streets and into housing. The Home Fund wouldn’t provide traditional low-income housing or affordable workforce housing, Stahley said.

Other services, such as daytime warming centers, also could be paid for using the Home Fund. They’d be used to identify the people most in need of housing services, Stahley said.

If the measure passes in February, the city would begin to receive revenue next September. The city would collect an estimated $774,000 over the course of four months next year, and $2.3 million per year in the years following.

But the city should be able to expand that amount to between $4.5 million and $5 million using matching funds, Stahley said.

Under the draft plan, 65 percent of Home Fund revenue would go to increasing the housing supply. Twenty percent would go to operational costs and providing services — including mental health and addiction services. Seven percent would go to shelters, and 8 percent would go to implementation.

Stahley said the city of Olympia wouldn’t be taking on the role of landlord or service provider if the Home Fund measure passes. Instead, entities would apply for home fund money through a competitive grant process.

In the case of housing production and preservation projects, funding would be awarded as half grant, half loan. The loan would be secured by the property, and repaid to the Home Fund with 1 percent interest over 10 years.

Any housing created through these projects must be available for at least 30 years to households making 60 percent or less of the area’s median income. Currently in Thurston County that’s $32,100 per year for one-person households, $36,660 per year for two-person households, and $46,980 per year for four-person households.

Services, such as supportive housing, would be paid for by grants.

Under the proposed plan, both nonprofits and for-profit firms would be eligible for this funding — but any project would have to be approved by the Olympia City Council.

The state law that allows Olympia to enact a Home Fund-style sales tax levy also limits who may benefit. The Home Fund would be able to provide housing to the following groups: persons with mental illness, veterans, senior citizens, families with children that are homeless or at risk of becoming homeless, unaccompanied homeless youth or young adults aged 25 or younger, persons with disabilities, and domestic violence survivors.

Home Fund projects wouldn’t be limited to Olympia city limits, under the proposed plan. The idea is that if there’s a project in Lacey, Tumwater, or unincorporated Thurston County that would benefit Olympia residents, the Home Fund could chip in.

The draft plan garnered a positive response from the council. Councilwoman Julie Hankins, who chairs the city’s Ad Hoc Committee on Housing Affordability, said she believes the plan will make a difference.

“I feel like we’ve come up with something that can really work,” Hankins said.

However, Mayor Cheryl Selby said Tuesday night that she’s concerned about “letting other cities off the hook for not taking care of their populations.”

Many of Olympia’s elected officials, including Selby, said Tuesday that they’d like to prioritize early intervention to ensure that local youth don’t enter a lifelong cycle of homelessness.

“Where do we intersect with someone’s life before they become homeless, or begin a cycle of homelessness?” Selby asked.

This story was originally published October 18, 2017 at 5:30 PM with the headline "Olympia one step closer to putting the Home Fund sales tax increase on the ballot."