A major affordable housing project on Olympia’s east side just hit an obstacle
The future of a proposed affordable housing project in Olympia is in question after the developer’s request for state funding failed.
Southport Financial Services plans to develop Lansdale Pointe Apartments across seven parcels at 911 Burr Road Southeast, which is south of Martin Way. The complex is expected to have 162 units, all of which will be reserved for households making 60% or less of the area median income.
About $2.65 million in local funds has been committed to the project, half of which have been approved by the Regional Housing Council and half by the City of Olympia. However, Southport’s proposal did not secure state funding in May, prompting concern from local officials who are eager to get more affordable housing built in the region.
In a letter of support, the RHC called the project a “priority” for local stakeholders that could help meet housing goals and ease the strains felt by rent-burdened households. The council approved sending the letter to the state during a Wednesday meeting.
“Successful completion of the Lansdale Pointe project will help us meet the goals of our 5-year housing plan in a manner that acknowledges and addressed these disparities,” the letter says.
In a March report, the state Department of Commerce projected Thurston County would need about 7,979 housing units by 2044 for households earning 50-80% of the area median income. Over 52,000 units would be needed by 2044 across all incomes, according to the report.
The state Office of Financial Management estimates the Thurston County area median income was $83,358 in 2022.
If finished, the project would feature nine three-story apartment buildings, a community center, a business center, a playground and a sports court, according to Southport documents presented to the RHC in January.
The site lies less than a mile from an Olympia Food Co-op location, an Albertsons and the Pacific Avenue I-5 interchange. Beau Baker, development manager for Southport, told the RHC in January that he expected the first building to be available by June 2024 and the rest by 2025.
Southport applied for nearly $28 million from the Washington State Housing and Finance Commission’s 2023 4% Low Income Housing Tax Credit program in March, according to an allocation summary. But they were not selected.
Jacinda Steltjes, affordable housing program manager for Olympia, told the RHC that there were more applications than expected this year and Lansdale Pointe failed to meet some of the commission’s selection criteria.
“The thought was that the program would be competitive but not super competitive,” Steltjes said. “We have officially entered an era where everything is very competitive.”
The commission reports it received 22 applications in 2023 for a total of $773.6 million. Yet, they only approved 9 allocations that totaled about $251.3 million.
But there still may be hope for the project to secure funding this year. Steltjes said more funding may be become available in July if it is not used for other uses in the state.
“Staff feel like there is a good opportunity that Southport may have a good chance of being funded if that does happen,” Steltjes said.
The state Housing and Finance Commission aimed for 40% of its allocations to go toward projects outside King and Snohomish counties, yet only 31% did so, according to its summary.
As such, Steltjes said the commission may still strive to reach that goal if more funding becomes available. She said the commission also prioritized funding projects that had local financial support, which Lansdale Pointe does have going for it as well.
If the project does not receive state funding by 2024, the RHC letter says Southport may lose out on nearly $6.7 million in federal resources.
The $1.325 million commitment from the RHC does not have a deadline to be used, said Tom Webster, program manager of the Thurston County Office of Housing and Homeless Prevention.
If all else fails this year, Steltjes said she understands Southport intends to apply for state funding again next year.
