Housing, Arts and Civil Rights Committee 8/12/26

Okay, fantastic.

Good afternoon, everyone.

The August 12th, 2026 meeting of the Housing Arts and Civil Rights Committee will come to order.

It is 2.05 p.m.

I'm Dionne Foster, chair of the Housing Arts and Civil Rights Committee.

Will the clerk please call the roll?

Council Member Rink.

Present.

Vice Chair Lin.

Present.

Chair Foster.

Present.

Chair, there are three members present.

Thank you and let the record reflect Council President Hollingsworth and Council Member Juarez are excused.

If there is no objection, the meeting agenda will be adopted.

Hearing no objection, the agenda is adopted.

We will now open the hybrid public comment period.

Public comments should relate to items on today's agenda or within the purview of this committee.

Clerk, how many speakers are signed up today?

There are currently seven in-person speakers and two online speakers.

Okay, great.

Each speaker will have two minutes and we will start with the in-person speakers first.

Clerk, can you please read the public comment instructions?

Public comment period is up to 60 minutes.

Speakers will be called in the order in which they are registered.

We will begin with in-person speakers and then move to remote.

Speakers will hear a chime when 10 seconds of their time is left.

Speakers' mics will be muted if they do not and their comments within the allotted time to allow us to call on the next speaker.

The public comment period is now open.

We will begin with the first speaker on the list.

The first speaker is Hannah Ziff, followed by Ryan Donahue and then Nathan Antonio.

Hi, I'm Hannah from Pioneer Square downtown here.

I've been asking City Council to ensure the development of the empty lots and office buildings around my neighborhood.

So I love the work that the Office of Housing is doing and I'm looking forward to seeing more of it.

I looked over the presentation and saw that there were significant budget cuts from the federal government and I also didn't see any upcoming housing developments around where I live.

Please consider forms of revenue for the city and stakeholders in order to help fund our development goals for housing, along with our investment goals in the global market.

I was wondering if you ever get matching dollars or any other assistance from the industrial or tech sectors.

Who is in charge of requesting that?

We are the demand and we are also the supply of workers and we're also investors.

So I think they'd be very keen about that.

What would be the cost if the city purchased the empty lots on Jackson in Little Saigon or the empty office building the Jack to be turned into housing?

Could this be done with low-interest loans and then be paid off as the Office of Housing recoups the costs from the home sales?

Would the municipality of Seattle consider selling government bonds for the Office of Housing?

I'm really looking forward to seeing an acceleration.

I think that the city of Seattle should be a competitor in this sector, and there's a high demand.

So thank you for the work you're doing.

All right, our next speaker will be Ryan Donoghue, followed by Nathan Antonio, and then I believe Carolyn Mahone.

Wonderful, thank you so much.

It's wonderful to be here.

My name is Ryan Donoghue.

I'm the Vice President of Advocacy at Habitat for Humanity, Seattle King and Kittitas counties.

We are actually having a party right now celebrating our 40th anniversary.

And I left that staff party to come here today to hopefully help illustrate the importance of what I have to say, which is we really, as Habitat, want to send our strong support and thank the mayor for an excellent selection to run the Office of Housing.

are and continue to be honored to be able to work with Ms. Larson on any number of different things, including the Seattle Housing Levy in particular.

We were definitely working very closely on that and continue to see the Office of Housing and Ms. Larson particularly as incredibly important partners in that work.

She's been a trusted collaborator and somebody who has partnered with organizations across the area in trying to be able to make Seattle a place where everyone can have a safe, decent, affordable place to call home.

And she will continue to represent this city well in that role.

She's incredibly well-suited to lead, and incredibly well-suited to lead the department, particularly in this moment, and is honestly the best person I could have thought of as a possibility to be able to lead this department.

I'm really happy with this choice.

Us at Habitat are really happy with this choice and we look forward to continuing to be able to have the opportunity to work with her and urge that the committee swiftly work to ratify and confirm her appointment.

Thank you very much.

Next we have Nathan Antonio followed by Carolyn Mahone.

Hello, Chair Foster, members of the Housing, Arts, and Civil Rights Committee.

My name is Nathan Antonio.

I'm a staff analyst at the Office of Housing, and I'm here to read a statement into the record that has been signed by some other staff at the office.

On behalf of the PROTEC-17 represented staff of the Office of Housing, we would like to thank you for the opportunity to comment in support of the confirmation of Kelly Larson as Director of Housing.

We would also like to thank Mayor Wilson and her team for accepting our request to participate in the hiring process.

As staff who have, ourselves, participated directly in that process, we're very grateful to have been involved, offering input at the outset, having a representative in the first interview panel, and getting a chance to meet with the finalist as a group.

Given our direct involvement in the day-to-day operations of the office, our lived experience with its culture, and familiarity with the challenges of the work.

We believe that our input and advice have helped shape the best possible outcome, and we wholeheartedly recommend Kelly to be the Director of Housing.

Particularly in this challenging time in the affordable housing sector, Kelly brings the knowledge and experience needed to overcome those challenges while also driving to greater outcomes across OHS programs services and other initiatives.

Further, because we know Kelly and Kelly knows us, we can say with certainty that she cares about staff on a very human level and wants to promote an office culture that is inclusive, constructive, and inspiring.

We have every confidence in her ability to lead and guide us and our work to success.

We hope you will agree with our assessment and confirm her appointment.

And I will just read the names of the undersigned individuals, other OH staff.

Amanda Licorice Sahali, Andrea Mendoza-Sanchez, Clarissa Ochoa, Jamie Wood, Jason Phillips, Jeremy Carroll, Jessica Gomez, Kim Lee, Mateus Tavares, Nathan Antonio, and Sandra Lake.

Thank you very much.

And next we have Carolyn Mahone followed by Councilmember James Lovell and then Daniel Malone.

I'm Carolyn Malone, still with the ongoing issues at Chancery Place apartment.

Seattle has an image problem, a serious image problem with the lack of transparency and effective communication, especially in my housing, where questionable Construction is going on, and I'm not allowed to ask questions, even when I go to the Seattle Department of Construction and Inspection.

I'm retaliated against.

The building is being gutted at 910 Marion Street, the 13 stories, being gutted with people living in it.

And the manager, Robert Hader, and police, this rogue cop, The manager refuses to give his name to me so I can file a complaint against him for ongoing harassment.

24 and 2025, an infestation of bedbugs were in my apartment for 13 months.

Then this thug, a cop affiliate, had me hauled into court in February of this year, trying to evict me.

And the case was dismissed because he didn't produce Whoever's making my stomach quiver, quit.

He didn't produce any evidence, any discovery evidence.

This is my rolling file cabinet with evidence in it.

Recently, I've been sleeping in a unit with toxin.

I believe it's some kind of cedar tree resin that causes me to wake up sick.

Yesterday was a hard day for me.

I ask City Council to come in and inspect with my presence.

The fact that none will come in just tells me they know what I say is true.

Thank you.

And I will keep returning until something is done about the harassment.

Thank you.

Thank you.

Next we have Council Member James Lovell followed by Daniel Malone and then Christina Giscombe.

Good afternoon.

As everyone knows, my name is James Lovell.

Yes, I'm a council member in the city of SeaTac, but I'm here today in my day job representing Chief Seattle Club.

We're a housing and homelessness provider here in Seattle.

And I'm here to offer our support for the mayor's selection of the very, very able Kelly Larson to lead the Department of Housing, the Office of Housing, I'm sorry.

And the word able can sound almost like a euphemism for someone who's just barely enough.

Kelly is more than enough in every way.

We've really enjoyed working with her.

She's a person of exceptional ability and I wrote down a few of those abilities.

She is knowledgeable.

I serve on the Housing Levy Oversight Committee in the City of Seattle and I've gotten to work very closely with Kelly in that time as well in other roles at my job.

She knows each of these policies inside and out and she knows what it means for operators of housing to be in the room.

She is approachable.

She is one of the friendliest people we've had in any role of city leadership with an administration that we just heard.

We face some heavy gravity in the housing world.

Kelly is approachable by residents, she's approachable by providers, by politicians.

Everywhere we go, Kelly is being approached by people.

She is equitable.

She cares about how the policies actually impact those who need housing the most.

She is capable of balancing legislative and operational priorities, and those are big challenges.

We've got a voter-approved levy.

We've got funding that's been approved by city council, funding that's been approved by all sorts of different layers, and Kelly is always capable of managing it.

She is accountable, she responds when we ask her for feedback, when she asks for feedback.

She reaches out early to let us know, hey, something is about to come down the line, here's how we can prepare for it to make sure that people stay housed.

She is adaptable and she is credible.

She is one of the most able people I've gotten to work with in my career and I strongly support Kelly's nomination for director for the office, soon to be department, no, Office of Housing.

Thank you very much.

Our next speaker is Daniel Malone followed by Christina Gizcombe.

And then we will jump to remote speakers starting with Danielle Gray.

Thank you, Chair Foster and members of the committee.

I also am here in support of your confirmation of the appointment of Kelly Larson to lead the Seattle Office of Housing.

The previous speaker took all the descriptors that exist in my dictionary, so this may be a little repetitive.

The world of affordable housing involves a bunch of idiosyncratic processes and partnerships and individuals, and Kelly Larson is well-suited to manage all that comes with that.

work involved in developing affordable housing, in operating affordable housing, and setting policy related to affordable housing is all complicated with lots of different interests that come to the table, interested in talking about it and influencing things in a certain direction.

Kelly has the right combination of experience, knowledge, affability, partnership, sensibility to be effective in this role more so than anyone else I could imagine.

So I'm so glad for the appointment and hope that you will choose to confirm.

Thank you.

Our next speaker is Christina Giscombe, then we'll jump to remote speakers with Danielle Gray.

Good afternoon, council members, and thank you for the opportunity to speak today.

I am also here in support of confirming Kelly Larson for the Office of Housing Director.

My name is Christina Giscombe, and I am the Director of Integrated Health at Plymouth Housing, and I'm here with a number of my colleagues, both past and present, to wholeheartedly support Kelly.

I've had the privilege of knowing Kelly personally and professionally, and I worked closely with her for many years at Plymouth.

Because of that experience, I can say with confidence, as can everybody here, that she is one of the smartest, most thoughtful, and most compassionate people that we know.

But she's also someone that we trust.

One of the reasons that I believe Kelly is uniquely suited for this role is her understanding of permanent supportive housing and the people who call it home.

For those who have experienced chronic homelessness, behavioral health challenges, trauma, and complex medical needs, housing is health care.

Stable housing creates a foundation for health, recovery, connection, safety, and community, and Kelly knows this deeply and believes in that.

Kelly also knows that making housing successful requires investment beyond the physical buildings.

It requires strong services, supported workforce, sustainable partnerships, and a city that understands the realities that we navigate every day as providers and as residents.

Seattle needs that perspective in its housing leadership, and we know the kind of leader Kelly will be because we've seen it firsthand.

She listens, she asks difficult questions, and she brings people together, learns from those closest to the work, and makes thoughtful decisions.

I'm genuinely excited about what Kelly can accomplish when given the opportunity to bring her intelligence, compassion, creativity, and integrity to the challenges our city is facing.

Thank you.

Thank you.

We'll move to remote speakers.

First, we have Danielle Gray followed by Natalie Quick.

Please press star six when you hear the prompt that you have been unmuted.

I would like to ask for an audit of the Office of Housing, specifically rent increases above land use covenants financial representations made by housing providers and the due diligence performed before millions of dollars and public awards are approved.

OH staff advises projects on raising rents above low land use covenant that is in the record.

Financial records, tax filings, loans, public awards, and related party transactions contain substantial inconsistencies.

In the records I have reviewed, I have found no financial justification for allowing rent to exceed covenants.

What due diligence is OH actually performing before awarding hundreds of millions of taxpayer dollars?

OH administers $350 million annually.

Seattle taxpayers also spend approximately $126 million to KCRHA.

The Seattle Housing Authority, which is an OH's portfolio, awards more than $430 million a year, including over $200 million in federal money.

This is an enormous tax-funded housing system, much of which ultimately flows to private housing providers.

Records also show a disturbing pattern of OH's treatment of the legally defined low-income tenants the system exists to serve, including efforts to silence tenants when they organize.

Meanwhile, officials are approving project cash-outs, OH's words, not mine, or what the council calls debt restructuring.

And OH's own records describe the consequences of causing a major headache.

Before approving another cash-out, rent increased, a multi-million dollar award, audit OH.

Thank you.

And our final speaker will be Natalie Quick.

Good afternoon, council members.

Can you hear me?

We can hear you.

Great.

Good afternoon, council members.

My name is Natalie Quick and I'm a co-founder of the Seattle Housing Roundtable and here today to speak to the MHA 2025 report aspect of the Office of Housing presentation today.

As you know, new multifamily permit applications are down more than 90% as of the City of Seattle's Q2 Housing Dashboard report this year, and that's down 90% again from the building boom height in 2020. We agree that MHA has been and continues to be an important aspect of the overall funding for OH, but with that in mind, revenue from MHA is now only 6% of that budget.

down from a height of 57% in 2021. Within the 2025 report, MHA brought in $47 million.

We wanted to put a little context to that number.

So there is one multi-family tower that is two senior housing buildings that was a $10 million fee, somewhat of an anomaly.

And then the rest of that money is either from townhomes, which was about $20 million, and then about three other projects.

So we just wanted to make sure there was context around that kind of anomaly in funding, which historically over the past couple of years has been around 20 to $22 million.

Thank you.

All right.

Thank you.

And there are no additional registered speakers.

Fantastic.

Thank you so much.

And as always, thank you to all of our folks who call in during public comment.

With that, we will now move on to our first item of business.

Will the clerk please read item one into the record?

Agenda Item 1, Appointment 03569, appointment of Kelly Larson as Director of the Office of Housing for briefing and discussion.

Thank you.

And I am inviting up to the table and welcoming to the table, Acting Director Kelly Larson of the Office of Housing and Nicole Valestero Soper from the Mayor's Office.

And before you begin, just to set the stage a little bit, we're not voting on Acting Director Larson's appointment today, but I am really pleased to be considering Acting Director Larson for this role.

Colleagues, the appointment packet has been circulated with council members and is included in the agenda packet for today's meeting.

Today is a chance to hear from Acting Director Larson and for committee members to ask any questions that we may have.

Our office also sent out a list of written questions to Acting Director Larson with a request to respond to those questions in writing by August 31st.

And I plan to hold a vote on her appointment in our next committee meeting after recess, which is gonna be September 9th.

As we already heard today, this appointment comes at an incredibly important time for housing and the Office of Housing here in Seattle.

We know that families are struggling with rising prices, and there are a number of challenges facing our affordable housing community, including the need to do debt restructuring, impact from federal funding loss, and our ongoing work to stem the tide of displacement for our communities here in Seattle.

I'm really proud that Seattle has led the nation in recent years on building new affordable units, and we know that OH has to continue to innovate and ensure that we are making investments that both strategically and efficiently expand and maintain our housing supply here in Seattle.

I won't say too much about Kelly because she's here, but Kelly brings 20 years of experience within the affordable housing sector and has served as OH's policy and planning director for the last five years.

She has a deep understanding of both the challenges facing housing providers and knows the history of the programs that have worked well and what hasn't here in Seattle.

Kelly, I'm excited to, well, I'm excited to hear more about you, but I'll turn it over to Nicole from the mayor's office first.

Welcome.

Hi.

Thank you, Councilmember Foster.

I'm so excited to be here to support Kelly Larson.

And good afternoon, Councilmembers.

Thank you for this time.

So Kelly is Mayor Welsons' appointee for Director of the Seattle Office of Housing for this hearing today.

Mayor Wilson led an international and intensive process to fill this role.

This was a competitive, long process.

Thank you Council Member Foster for being part of it and to many of the community members and the staff for participating in this process.

The search focused on finding a leader who could carry forward the Mayor's housing vision, create stabilization for the sector and for the staff, and throughout the process, the mayor's office engaged key affordable housing partners, community organizations, and the staff at the Office of Housing.

From that input, one clear candidate rose to the top, Kelly Larson.

I'm repeating some things that have been said, but Kelly brings 20 years of experience in the affordable housing sector and for the past five years has served as the Office of Housing's Policy and Planning Director.

In that role, she led the reauthorization of the Seattle Housing Levy, one of the largest of its kind in the nation.

She created new funding programs through Jumpstart to support permanent supportive housing and affordable housing.

She also led the multifamily tax exemption reauthorization, worked to strengthen housing operator stability, and helped the city respond to federal funding threats.

Mayor Wilson sees Kelly exactly as the kind of thoughtful, values-based and decisive leadership our city needs.

She has the experience and judgment to advance the housing agenda that we need at this time and keep this critical work moving forward.

We are confident that she will serve Seattle well and we respectfully ask for your support in confirming her appointment.

Thank you.

Kelly is here today and looks forward to answering your questions.

My turn.

Thank you for that, Nicole.

I appreciate that.

And I want to hand it over to Kelly to share a little bit.

And then colleagues, I'll be turning to you for questions.

Chair Foster, Council Member Rink, and Vice Chair Lin, I'm honored to be considered as the next Director of the Office of Housing.

I want to thank this incredible community who showed up here today.

These are all people who do critical work in our city, who have taught me so much over the years, shaped the person that I am, and who collectively support our shared cause of housing justice.

No person can do this work alone.

We develop better ideas and achieve stronger outcomes when we work in partnership and coalition with others.

In this role, that means the entire staff team at the Office of Housing, government partners, elected officials and investors, all the different workers, community partners and organizations that build, preserve and operate affordable homes and the residents who live in these homes.

They provide some of our most important feedback.

I've been privileged to work in this field for nearly 20 years.

Repeating that number again and again is a little challenging.

I started at King County working on the first Veterans and Human Services Levy.

I spent some great years at Plymouth Housing with many of these folks and have been at OH, joined here to work on the Revered Seattle Housing Levy, which is our city's foundational revenue tool for housing.

The most important work we do at OH is to invest in permanently affordable homes for those most in need, housing that is protected from profit motives.

Especially in this time we are in, we must find the right balance for our investments, preserving the homes we have and building new homes, supporting housing operations and new development, investing in rental housing and home ownership opportunities.

At its best, affordable housing provides stability for families and individuals to thrive.

Affordable homes provide consistent shelter for people to weather the many storms that life brings.

Affordable housing ends homelessness.

Thank you for considering me for this important role.

Thank you so much for that.

And, um, yeah, I think we'll just make a game out of saying 20 years now.

Um, so I'll invite my colleagues to participate in that.

Um, uh, I will first turn to colleagues to see what questions you have for acting director Larson.

I'll start, if that's okay, Chair.

Don't really have a lot of questions since we had the ability to work together for many years.

Super excited for today and for the work to come.

So one of my concerns is who is going to replace your old role as policy director because you did such a good job, and those are tough shoes to fill.

I don't expect a response, but look forward to whoever steps into that role as well.

big challenges ahead of us.

As we were joking earlier, a little bit of congratulations, a little bit of condolences.

This is going to be hard.

But as I said earlier, I can't imagine anyone else better suited to take on this really difficult role.

Most of all, I think I just value both your values and your trusted leadership, but also just your thoughtfulness and your strategic thinking.

These are really complex problems.

And I just appreciate how you approach the work and work in partnership.

and that's just gonna be so critical right now, whether it's partnership with our housing providers, partnership with us on council, partnership across with our county partners, state partners, so many different partnerships that we need to work together So again, don't really have any questions, but just wanted to say I'm so excited to have you here at the table and look forward to working with you.

Thank you so much, Vice Chair Lynn.

I appreciate that.

Councilman Burink, you're recognized.

Thank you, Chair Foster.

I think one of the beneficial things about your appointment coming before us is just the matter that we've, I know my office has had the pleasure of working alongside you for the past year, so we've gotten to know your work style, how you move through the work, and it's clear that many folks who have been involved in the work of bringing online affordable homes for our community trust in you.

And so I think just to build on some of the points that Vice Chair Lynn raised, you know, there are real challenges facing the affordable housing sector.

We've talked about them and unpacked them in this committee over the past year.

And I think just holistically wondering under your direction over the Office of Housing, what are some of the immediate short term changes you're anticipating medium term and long term in terms of addressing some of the challenges facing the industry?

That's a great question.

So our largest funding opportunity is currently active.

That is our rental housing NOFA.

We've released $110 million for preservation and new production of affordable homes.

It will be our office's priority to ensure that those investments are landing as strategically as possible in communities where affordable homes are most needed and with typologies, bedroom sizes for families and others who need them and at rent levels that are competitive in the markets that they are located in.

So our team will be working really collaboratively across all of our divisions to look closely at all the applications that are coming through and make really strategic decisions this year with our investments.

That's a real near-term choice that we have.

We also have our home ownership NOFA is in action and there are some decisions being made there and we have other investments on the horizon for debt restructuring, debt buy down coming later in the fall.

We do believe that just in talking with our community partners and our staff who are well informed on these issues that we will likely be in this position of investing in preservation and debt restructuring types of investments at a higher level than we ever have for the near term.

Can't really predict what that looks like as it is budget contingent, really depends on the fund sources we have available and at what levels.

But certainly for this year, we're continuing in the trend that we were on last year, and then we'll have to see for 2027, depends on budget.

Long term, maybe another short term, we'd like to get to a conversation about how we reopen the permanent supportive housing pipeline.

Currently, we're not funding new supportive housing.

It's very difficult for our city to address homelessness if we are not growing our supply of supportive housing.

We also need many other partners at the table in order to have success with our supportive housing projects.

Capital less so.

Long-term operating maintenance and services expenses are the most important part that those projects cost a decent amount of money to operate, as is well justified.

And we need other partners at the table to make that happen.

So we'll be interested in launching those conversations in the next several months to talk about how we get there.

Finally, I mean, I guess I'll just briefly respond to Councilmember Lynn's question, too, because human resources items have been a high priority for me just in the first couple of weeks of being in this role, and so we are moving as quickly as we can, and I'm also very interested in ensuring that the person who steps into the policy director role is able to lead us well through these challenging times.

I look forward to that process and we'll get that going soon.

Thank you so much for unpacking a little bit what's on the horizon.

And I wanna just note how much I appreciate the intention on being strategic with the investments we have in the Office of Housing.

Also in full recognition that the landscape we're working in between a really challenging economy, rising construction costs, and a quickly changing federal funding landscape makes it really challenging to be strategic with all of those variables in play.

I appreciate the focus on that and full recognition that these are unprecedented times, and I don't know how many times I can say that, or how many times I've said that in the past year.

I think to that point, and you touched on this with just the matter of preservation and debt restructuring, I think there's the matter of how the Office of Housing will be balancing the need for housing production and knowing the growing need on operations and maintenance.

So I'm wondering for you, what are some of the key metrics of how we're going to be evaluating the balance of those two?

The Office of Housing has been grounded and guided by the Seattle Housing Levy Goals for 40 years.

And those goals, which are approved by the voters, are very important to our team.

And we'll talk about this a little bit later in the next presentation.

But the achieving the goals of the housing levy, which primarily focuses on production of rental housing and production of home ownership housing, that's our North Star.

It has been for a long time.

We believe we can do both the achievement of the Seattle housing levy goals and the preservation and supportive operations of our portfolio.

Again, it does depend on what the future holds for the Office of Housing budget, but we have found ways to be creative with the resources that we have, and I think it will be likely a similar categorical split between new production, preservation, debt restructuring, and housing operations next year, this year, and last year.

it'll likely look very similar.

It depends on the competition.

The benefit of the open procurement that the office runs is that you have a lot of projects come through and we have an opportunity to meet and hear from a lot of different applicants.

And sometimes there's projects that we're not aware of that come through and they end up winning through fair competition.

So it will be important to see what those projects look like.

It's all dependent on developer and operator capacity to bring forward applications for preservation projects, which are not simple, in addition to new production, in addition to running their housing organizations every day.

It's a lot that we ask of organizations, so it depends on what comes in.

what we are proactively seeking, which is reliant on all of the data and analysis and expertise that our staff teams hold each day.

So we're going to be interested to see how this plays out this year and, again, really focusing the team on being as strategic as possible and making these decisions.

Thank you for that.

And Chair, if I may, I have one final question just for today.

Thank you.

Building on that point, you know, we go through a number of competitive funding cycles, and I am always thinking about the organizations that are embarking on their first project.

So we're talking about our community-led affordable housing projects often being put forward by community-based organizations that support a number of marginalized communities across the city.

And so for the Office of Housing, how are you all thinking about, particularly under your leadership, what kind of supports or reforms for how Office of Housing will be assisting those organizations that might be embarking in their first projects and wanting to be competitive in future funding cycles?

This is really important to me and to many at the Office of Housing.

This is equity in action through our housing dollars, and equity plays out in the Office of Housing's work and in our community partners' work at every level of the day, every level of staffing.

It plays out in terms of where our funding lands, which communities have access to our funding, which communities have access to our housing, what do our staff need to be successful, both at the office but also throughout the affordable housing sector.

We have a number of community-based projects that have applied for funding from the Office of Housing and are seeking partnerships, are seeking additional investment.

And the way that this has worked for a long time, and it's not perfect, but projects start at a very simple stage.

You just have to have an idea.

A smart person and a person who cares about their community has an idea.

to get from that idea to building and operating housing is sometimes difficult and a long haul, and it requires you to take on enormous risk and build up an organizational capacity and do a lot of work to get there.

And we've supported and seen amazing work from a lot of community-based organizations in Seattle who've achieved a number of things.

and have built incredible housing projects across the city and great organizations.

And we need to continue to do that with groups.

It is a challenging time.

It's just similar to the challenges that we face.

We are seeing more and more investor-risked intolerance in Seattle.

We're starting to see higher requirements placed on our projects, particularly in certain neighborhoods and for particular types of organizations.

And these are major investors in projects that we need to make projects a reality and that we don't control.

but what we can do is work with these groups as much as we possibly can to support key partnerships and support fair partnerships and to bring the Office of Housing Resources to support them as well when we're needed to make sure that these projects come through.

Sometimes that means coming in at a higher per unit cost because we want to support this project because it matters.

and sometimes it needs other types of support, technical assistance, work with investors, work with other public funders.

So we're here for that.

We know that there are a couple of projects in the pipeline right now lining up for investment and our team is having active conversations about those projects.

So we'll be excited to see what receives funding this year.

Thank you so much for that response.

And thank you for answering my questions and for being before the committee today.

And thank you to the mayor's office for bringing forward this appointment.

Thank you.

Thank you, Chair.

Thank you.

Excuse me.

Thank you so much, Council Member Rink.

And I will turn to my questions and I'll build actually a little bit off of that conversation that you started, Council Member Rink.

You know, one of the things that I hear sometimes from our providers, and I know that you have this experience and we see this as folks who are coming through our funding rounds and because of the, gaps in financing, they are sometimes coming through the Office of Housing funding rounds, maybe it's two, three, several times in order to complete their funding stack for their projects.

And we know that the state also has a role and obviously we have a great partnership and the state funding coming into organizations is also part of how many of our partners are getting funded.

So with that as preamble, I'm curious to hear if there are strategies or innovations that you're thinking about as you step into this role for how we approach that process so that we can perhaps make it more efficient for partners or cut down on the amount of time that people are waiting to complete those stacks.

Yes, and I've had some really interesting conversations in the last couple of weeks with some key leaders in the community.

Smart folks have been doing this a long time, good ideas.

Your office as well have brought forward some really interesting concepts.

I think that essentially what folks have asked for, and we've been requested to do this for at least a year, maybe two years, is to get to a more advanced level of planning for pipeline so that there's more certainty for developers out there and that they are properly allocating resources to redevelopment and permitting and design in time for Seattle resources to come through for their project and other resources to come through.

It's a very reasonable ask.

In order to achieve it, I believe we need to have strong predictability of our fund sources and strong management of our short-term loan program.

So we are interested in getting there.

The team is working really strategically right now on analyzing our short-term loan obligations and looking ahead at what we can possibly do within our current means, within our current budget, to be creative and be able to offer more certainty to developers as they plan into the future.

We definitely want, it's always a balance.

You want to make sure the pipeline is still robust and that projects are moving forward and ready to go.

You want to have high competition coming through.

And it makes a lot of sense to also provide more certainty to these developers so that they understand where they are on the line, providing tiering or some sort of better understanding of how much time they need to wait before there will be funding available.

So the team's looking at a few concepts.

There are a few ideas in play and we'll be interested to see how that plays out.

I think I just was talking with some folks about this today and I said, let's reconvene later in the year when we kind of understand what 2027 looks like, but we're interested in pursuing some of these ideas.

Thank you for that and I appreciate your openness and not just openness but the commitment to continuing to make our processes work better to partners and being responsive there even within the confines that we all are operating in.

So thank you for that.

And it turned to sort of a related question.

I know something that I care about a lot and that I know you care about and it always stands out whenever I'm talking with you is the focus on the people who we are serving.

And I think that's something that sounds really obvious, right?

But can sometimes get lost when we're talking about units and production goals in those pieces.

And that is something I just really appreciate about you.

And one of the things that I see as a challenge in our city sort of across the board is the accessibility of affordable housing and where we're able to locate and build affordable housing.

And I'm curious if there are thoughts that you have on the role for Office of Housing when it comes to supporting and continuing to grow our investments in affordable housing in diverse geographies around the city, because I think that's really key to having the cross-class, multiracial city that we want to be.

Chair Foster, have you been a spy in my office today?

There have been so many conversations that are very lined up with your questions.

We were just talking about geography earlier today too.

This is very much on our mind.

We have consultant work underway with the UW Housing Futures Center where we're examining, we've had a longstanding siting policy that helps to determine where affordable housing lands throughout the city.

We're in the midst of really re-examining this and what our priorities are in terms of geography and placement of investments.

We've started to make some change in this regard with more public site utilization, and we actually purchased a site in South Park to actively site some affordable housing in a part of the city where we did not have any investments.

We have Fort Lawton on the horizon, which is another place where we have not had any investment.

Other areas of opportunity though across the city, the team is really interested in looking at how we back a change like that with data and evidence and then move toward implementing that at the right pace.

This goes back to some of that pipeline planning conversation.

Many of our providers have pipelines and sites lined up that they've invested resources in.

and as we started to talk about this change of geography and prioritization, there are concerns because a lot of the times sites are purchased in areas where land is least costly.

That doesn't always overlay with areas of opportunity.

So we have to balance and make sure that we're working closely with our investees around the sites that they have and the sites and locations that we want to see more affordable homes.

so more to come there but there's a lot of work underway and we have some preliminary information we can share with you all about what UW and our team has found and there's more work coming.

Thank you for that.

And I look forward to hearing that preliminary information and excited to hear the alignment, even just day of, of these conversations.

And then I wanna turn to another part of the role leading the Office of Housing, which I think about our affordable housing providers and we often go straight to the Office of Housing, but obviously our affordable housing community intersects with many different parts of city government, whether that is SDOT, whether that is the public utilities, City Light.

There's just so many roles that our local government plays when it comes to supporting the production of housing and supporting the production of affordable housing.

So I wonder if you can speak to the way that you see your role as Office of Housing Director to collaborate with other city departments in order to help make sure that we are bringing affordable housing online.

This is very important.

And it is very easy to point out all of the areas of mismatch and misalignment, and it's not simple to identify solutions.

However, I have built strong relationships with many departments in my time at the Office of Housing.

I work closely with a number of the directors and senior staff at some of these key departments.

and there's a lot of willingness and interest in more collaboration and thinking through how we work better to support our projects.

There's work underway that we are collaborating on with the mayor's office and other city departments to try and improve these processes, but we do see this play out more regularly than it should.

And I'm just thinking of some of the folks who've spoken here today and some of the stories they've brought forward to us on their developments and how difficult it can be to move a project through certain types of permitting and review in the city.

and how costly it can be.

And oftentimes the cost will fall to the Office of Housing to cover.

So it's in our best interest in order to try to achieve cost savings and stretch our precious housing dollars as far as possible to improve this coordination.

So we'll definitely be working on this.

It's a high priority for the team.

Thank you for that.

I really appreciate that.

And I see the same challenge that you see there in terms of the cost impact to affordable housing providers at a time when we wanna make sure that we're making it easier and that we're being supportive of people to bring that housing online.

So I'm gonna ask you a final question and then I'll go back to colleagues to see if there's any final comments or questions from folks.

But just going now, just to the personal sort of side, what does it mean to you to step into the role of leadership and OH director at this moment?

I just keep coming back to, I can't believe I'm here.

This wasn't on my bingo card.

I am so honored and privileged to be able to have had such different jobs and work with so many different amazing people in the course of my career and learn from so many different folks.

Being at the Office of Housing has been so great.

It's been a real stretch for me when I first came to the office.

I had to learn a lot.

And that was rough, but also kind of fun.

And I've continued to learn from my colleagues at the Office of Housing and the areas of work that were not super familiar to me.

And I know I have more to learn.

so I'm looking forward to that.

I'm looking forward to continuing to work with all the staff teams at the office in different ways than I have in the past and to do the best I can to support our staff teams and our providers through whatever challenges we have ahead.

I do have a lot of experience in this realm, thinking to Daniel's comment about idiosyncratic, all the funding systems and structures and rules and regulations that we operate within and I know there's folks behind me who have so much expertise in all of these different rule sets that we have to find a way through.

I'm looking forward to continuing to find creative ways to work with within our city departments, just as we talked about, with other funding partners to try and improve our coordination collaboration and do better with what we have and try to improve transparency.

We've made great strides in the last couple of years.

We have really changed the way that we report.

on our investments.

We have this new great dashboard.

We have a great map of all of our investments.

We'll keep looking at ways that we can tell the story of the Office of Housing and all of the work of our great partners to the public and to our elected officials.

Thank you so much for that.

I appreciate that.

And colleagues, I will turn to you to see if there are any final comments or questions, and otherwise we will be moving on to our next item of business.

All right.

Thank you so much, Acting Director Larson.

We look forward to, well, you're going to be at the table again in five minutes for the next presentation, but we look forward to having you back in September to vote on your confirmation.

Thank you.

And thank you.

I was going to say Nicole.

Thanks, Nicole.

All right.

We will now move on to our next item of business.

Will the clerk please read item two into the record?

Agenda item two, Office of Housing presentation on annual reports for briefing and discussion.

All right, fantastic.

So we are gonna welcome our continued presenter, Acting Director Kelly Larson, and then we are gonna have some staff from the Office of Housing join us at the table.

And as we're getting them set up, I will just share a little bit of preamble and context for folks here.

So the Office of Housing, as we know, completes annual reports and presents those to council.

We know that right now our housing providers are facing many challenges in the city.

and today we have an opportunity to hear from OH progress on our housing levy, progress on our investments and our work to continue making Seattle a more affordable place to live through the investments at the Office of Housing.

So every year OH presents on our annual investments in housing levy, the mandatory housing affordability, religious lands and MFTE.

OH will be presenting and completing the MFTE report in September So today's presentation will cover the other three reports, as well as insights from statements of legislative intent that OH had due to counsel earlier this year.

So colleagues, I will have the team at OH introduce themselves and present.

And then I ask that you hold your questions until the end.

so that we can have a robust conversation after we receive all of the information from the office.

I know I am looking forward to discussing the progress that we have on our housing levy in particular given that we've seen such an increased need in our community and also learning more about some of the pivots that the Office of Housing is making to ensure that we are incentivizing the right kinds of units to come online.

So I think it's going to be a fantastic conversation.

With that, I will pass it over to the Office of Housing and ask that our presenters please unmute and introduce yourselves and begin when ready.

I have been thoroughly introduced and I will hand it over to Nathan, please.

Hello, I'm Nathan Antonio.

I'm a policy planning and data analyst in the Office of Housing.

Hi, good afternoon, Amanda Licorice Sahali.

I'm a home ownership specialist at the Office of Housing.

Hey there, Maria DeWeese, strategic advisor with the policy and planning team.

Great, we have such a good crew who's here and many others who perform all the important work and contribute to these reports and presentations.

Many thanks to our OH team for being here and for those who are standing us up to get here.

I'll start with an overview of OH annual reports and context for what we faced in 2025. Then Nathan will provide a comprehensive view of OH investments as he covers the 2025 annual investments and housing levy report.

We'll also discuss the 2025 MHA Annual Report, and Amanda will highlight MHA achievements for homeownership.

Finally, we'll share how OH has implemented some creative solutions in this challenging economic and budget landscape.

And throughout the presentation, we'll incorporate some of the information from the two statements of legislative intent that we responded to this year.

SLIOH003SA, which requested updates to the Seattle Housing Investment Plan and SLIOH004SB, which reported on operations stabilization funding.

So we'll start with an overview of 2025. We provide four annual reports, the annual investments and housing levy report, mandatory housing affordability, religious lands, and multifamily tax exemption.

Reports are typically due in June and report on the prior calendar year.

This year, already noted MFTE will come in September.

Today we'll be speaking to our annual investments and housing levy report and the MHA report.

The religious lands report is available on the OH website for those who are interested.

All the projects that access that density bonus are also reported in our annual investments and housing levy report since these projects on religious lands require OH funds.

The Investments in Housing Levy Report is a comprehensive view over the course of the year of what OH has been doing.

It incorporates all our major programs, rental housing, operating maintenance and services, home ownership, homelessness prevention and housing stability services, and home repair and weatherization.

It reports on how funding from the Seattle Housing Levy, Jumpstart Payroll Expense Tax, MHA, and other public funding has been spent.

Historically, OH has always achieved its housing levy goals.

Achieving these goals is very, very important and continues to serve be our North Star.

Here you can see the two primary funding sources for the Office of Housing spanning the period 2024 to 2030. The left bar shows the spend plan for the Seattle housing levy with $138 million budget.

Rental production is the largest category and I will note that is rental production, both new production and preservation.

So that comprises 78% of levy funds.

OMS follows at 13%, home ownership at 6% and homelessness prevention at 3%.

The right bar shows jumpstart payroll expense tax with $142 million annual budget.

Rental production and OMS are both at 46%.

So you see a different type of split in this fund source.

Home ownership is at 6% and homelessness prevention 2%.

For other fund sources, our 2026 projection for MHA is $20 million and all other sources is $43 million.

This bucket of other sources includes a variety of sources including state weatherization grants, interest earnings, federal home funds, program income, local option, and more.

The Seattle Housing Levy remains foundational to OH's budget and Jumpstart has become a major fund source for OH that is increasingly needed for OMS and creative capital and stabilization strategies.

OH has always prioritized investments for those who are most in need and the housing levy requires that at least 60% of total levy rental production and preservation and OMS funds serve households with the lowest incomes or those earning less than 30% of area median income.

As of 2025, OH has committed 51% of our levy funds, or $102 million, to homes for households with extremely low incomes.

As future rental investments and OMS commitments are made, this percentage will continue to rise to meet the requirement.

2025 was a challenging year for affordable housing.

We saw federal funding withdrawn, which was a loss to our region of about $25 million for emergency housing vouchers.

We experienced a reduction of new continuum of care operating support over the last several years, and of course the threats remain on the horizon.

This created tremendous uncertainty in the sector, especially for supportive housing.

Operating costs such as insurance and materials and labor to maintain and repair homes have continued to rise.

Inequality has continued to grow, increasing homeowner household incomes continue to push Seattle's area median income upward, which in turn raised the income-restricted rent limits beyond what many low-income families can afford.

With all this, our local funding sources are strained to address multiple challenges.

Through these challenges, OH is committed to our mission of permanently affordable income-restricted rental housing and home ownership.

It's the foundation of our work, and it's achieved through direct investment, policy, and regulatory requirements, such as inclusionary zoning.

In Seattle, approximately 7% of all housing units in the market and 15% of occupied rental housing units are income and rent restricted.

There are other cities like the city of Boston that achieve much higher percentages and certainly cities in Europe are striving for higher amounts here, and this is an interesting new metric that we are looking at at the Office of Housing.

We believe a healthy stock of income and rent-restricted homes throughout Seattle is the foundation of affordability for low-income individuals and families and allows our city to continue to be diverse and inclusive, making it possible for people of all incomes to live equitably and access opportunity.

In 2025, we responded to the challenges we heard from our providers with creative solutions to preserve and prevent loss of units from our affordable housing portfolio as much as we could, shifting focus toward the long term financial and physical sustainability of our buildings.

I'll hand it to Nathan.

Hello again.

Once again, my name is Nathan Antonio.

I'm an analyst in the Office of Housing.

In this section, I'll be presenting information about our 2025 Annual Investments and Housing Levy Report.

The 2023 Seattle Housing Levy has a seven-year period running from 2024 through 2030, and we have now completed two years and are in the third.

OH is on track to achieve our 2023 housing levy goals.

In just the two year span of 2024 through 2025, we have invested to build or preserve 1,646 affordable rental homes, which is about 47% of our 3,516 unit goal.

We've also provided OMS supports for 712 units or taking us to 62% of our seven-year goal of 1,156 units.

And we have invested to build homes and assist 126 homeownership households, which puts us at 34% of our seven-year goal.

Moving on to rental housing, our rental housing program funds production and preservation of rental housing that will serve low-income Seattle residents at or below 60% of area median income, or AMI, for a minimum of at least 50 years.

In 2025, over $133 million was awarded through this program.

These awards went to four new buildings with 550 units, nearly half of them being two-bedroom family-sized units.

as well as eight capital preservation projects with 782 units in total, and nine buildings received new debt restructuring loans, which we will discuss in more detail later in the presentation.

The Operating Maintenance and Services, or OMS, program provides operating and services subsidies for buildings that serve extremely low-income and formerly homeless residents.

These subsidies help pay for necessary operating expenses, such as maintenance and repairs, basic utilities, supportive services for residents, as well as staff wages, and they are sorely needed to supplement the low rents paid by these residents with extremely low incomes.

Subsidy awards are made for a minimum term of 20 years to demonstrate the city's commitment to supporting these deeply affordable homes in the long term, which is critical to securing other leveraging funds and keeping people housed.

There were three new OMS subsidy awards made in 2025. Two were finalized for the 2016 housing levy, so they were like the last two that we made under the previous levy.

Those projects total 204 units, and their combined first year commitment is about $2,250,000.

The other was a preliminary commitment that would be the first under the 2023 housing levy to the first PSH project to come online with 120 units and $3.6 million in support in that first year.

OH also has, or had, $17.9 million in ongoing subsidy commitments in 2025, supporting about 2,400 units, almost all of them, permit-supportive housing.

Moving on to home ownership.

The home ownership program funds the development of new resale-restricted, permanently affordable homes that will be sold to low-income first-time home buyers at affordable prices to be maintained for a minimum of 50 years.

It also includes funding for down payment assistance, again, also for low income first time home buyers, as well as foreclosure prevention.

In 2025, $15 million was awarded through our home ownership program for 105 resale restricted permanently affordable homes.

This includes two surplus city owned sites in the Rainier Valley Affordable Home Ownership Initiative, which together will have 24 new two bedroom homes.

Alright, moving quickly now into homelessness prevention and housing stability services.

This program funds services and financial assistance to prevent homelessness, as well as to rehouse individuals and families after experiencing homelessness.

It also supports affordable housing providers in helping residents build skills and connect with other services that, again, help them stay housed.

In 2025, 900 households participated in homelessness prevention and rapid rehousing programs funded with 2.5 million housing levy dollars.

OH also provided 3.1 million in resident services funding to 12 affordable housing providers that together served about 4,200 households.

And lastly, we have the Home Repair and Weatherization Program.

This program assists homeowners at or below 80% of AMI with critical health and safety repairs to preserve their homes.

The Weatherization Program focuses on energy conservation, indoor air quality, and reducing utility costs for renters and homeowners.

In 2025, over $458,000 was provided in home repair loans and grants to assist 87 low-income homeowners, and $8.6 million in weatherization grants were made to serve 403 single-family homes, as well as eight multifamily buildings with over 900 affordable apartments in them.

I want to thank Nathan for all the amazing work he does on these reports.

It's incredible.

So it's great to also have you come here and present all this information and be here for all the technical questions that surface.

Next, we're going to speak about MHA and 2025. MHA is Seattle's inclusionary zoning program where certain new developments must offer on-site affordable housing or pay a fee in lieu.

In 2025, OH received $47 million in MHA payment contributions, nearly doubling the amount we received in 2024. We awarded, for example, on the screen, $26.7 million of MHA for the Beacon Crossing development, 125-unit building located near the Beacon Hill light rail station.

In 2025, there were also 86 MHA on-site performance units committed I'll share a few key takeaways from the MHA report.

To date, MHA funds have been awarded to over 4,600 affordable units.

343 MHA performance homes have been built with another 255 committed.

Development in low-rise zones has been reliably steady over time, comprising about one-third of total payments since MHA was adopted.

Many believe that future townhome development will shift from low-rise to neighborhood residential zones, which were up-zoned in 2025 without MHA requirements.

This is another big potential change on the horizon.

Although we have both MHA commercial and MHA residential, commercial development only accounts for about one in every $10 of MHA payment contributions.

And now Amanda's gonna share more about how MHA supports affordable home ownership.

Thank you, Kelly.

Hi, my name is Amanda Laker-Sahali.

I'm a home ownership program specialist at OH.

I get to talk a little bit more about how MHA is creating permanently affordable home ownership units across the city.

So far, $16 million in MHA payment funds have been used to build 75 homes in projects in neighborhoods like Finney Ridge, South Park, Capitol Hill, Beacon Hill, and another 38 homes in the pipeline.

These projects were awarded through competitive NOFA rounds to stewardship partners and each home is sold to income eligible first-time homebuyers.

The steward stays connected to the homes and the homebuyers for the life of the home.

Instead of paying into MHA, a private developer can opt for MHA performance and provide an affordable home as a part of a market rate development.

These MHA performance homes are built right alongside the market rate units with equivalent fixtures and finishes.

To date, only three MHA performance homes have been purchased at an affordably calculated sales price.

However, we have 11 more homes in the pipeline.

MHA Performance Homes are created in developments that would be out of reach for low-income home buyers and help diversify neighborhoods.

For example, the Olive Development is a 21-unit townhome project in Ballard built by Shelter Homes with a unique design, covered parking, and covered parking.

Two of the 21 homes will be sold as MHA performance units, each with three bedrooms and two bathrooms.

Currently, the affordable sales price for a three bedroom townhome is $359,000.

The other 19 units in the project are listed at between 849K and $979,000.

OH and the developer will partner with Habitat for Humanity, who will serve as a long-term steward and identify the income-qualified families who will ultimately purchase these homes.

These MHA performance units will create real access for families that would otherwise have been priced out of this development.

And with that, I will turn it over to Maria to talk about some of the other creative solutions that OH has implemented.

Thank you.

My name is Maria DeWeese.

I'm a strategic advisor with the policy team at OH.

In this section, I'll be discussing some creative solutions OH implemented in 2025 to address emergent challenges.

Last year, the annual NOFA included a funding category for debt restructuring on properties that were experiencing significant performance challenges.

This funding helped nine buildings to avoid foreclosure and restored long-term positive property cash flow.

We did this by paying down the debt on these buildings and by doing that, we were able to adjust the rents down to more affordable levels to serve lower income households.

This was a win-win for both the property owners and the residents and ensures that we can keep serving those most in need of affordable housing, people in the 30% and 50% AMI levels and at rents that they can afford.

We also underwrote to right-size operating costs to reflect the current cost environment and replenish building reserves.

Some properties also required additional capacity from a third party consultant to improve building performance.

And this was an important and necessary step to preserve the Office of Housing's investments in affordable housing.

The Office of Housing also funds our partners operating maintenance and services needs.

The first item on the slide has to do with workforce stabilization.

These dollars support compensation for staff who work at permanent supportive housing properties.

In 2025, this funding supported wages and benefits of 936 PSH staff working in buildings throughout Seattle at 11 different organizations.

These workers are vital to ensuring resident wellbeing and housing stability.

They serve our vulnerable neighbors and support safe communities through case management, connecting residents to resources, and are often on call at all hours.

We know these jobs have had high turnover, so the Workforce Stabilization Program is intended to address those staffing retention challenges.

The Office of Housing has also responded to sector-wide challenges by providing urgent operating support grants, called UOS for short, to our affordable housing partners to fill the most critical operating gaps.

In 2025, OH released $26.2 million in flexible funding for things like maintenance and repairs, rent assistance and insurance costs, and OH scaled awards based on the housing provider's portfolio size.

22 organizations were funded with an average of award of $1.2 million.

The funding can cover expenses between July 2025 and December 2027. You can see on this chart that the bulk of US funding will be used for maintenance, rent assistance, insurance, and capital needs.

OH also recently released an RFQ for consultant contracts for $1.7 million to fund portfolio preservation planning work.

This initiative is intended to help us understand ongoing needs and gaps in the portfolio and plan for future needs.

Consultants will help our housing partners with tailored individual approaches that address their unique organizational needs and circumstances.

The consultant work is expected to begin this fall and winter and will continue through next year.

Looking ahead, the Office of Housing also released our annual NOFA of at least $110 million for the rental housing program.

Funding is available for three categories, new production, rehabilitation, and acquisition.

And we anticipate releasing another NOFA later this year for debt restructuring and preservation of the current portfolio.

Thank you so much for hosting this discussion today and we look forward to answering your questions.

Thank you so much.

We really appreciate the entire Office of Housing team for all of the work that you do.

I know we've got a fantastic group of folks in front of us, but I know there's many more who worked on the work over the years in the presentation, so just want to express my gratitude to each of you.

I'm going to start with some questions that I have, and then I'll turn to my colleagues here on Council, and then I may come back with a few more questions here at the end.

I want to start with slide 11, if you don't mind.

So it's great to hear that Office of Housing is on track and that's how I take slide 11 when I'm looking at the percentage.

Let me wait till it gets pulled up here.

There we go.

Great.

So, you know, in the first two years of the housing levy for 2024 and 2025, building or preserving 47% of the goal.

But I also am curious, I know in previous conversations that I've had with OH and I think earlier this year in committee, it was my understanding that we were gonna need, we would possibly need up to $40 million a year in PET dollars for us to reach our housing levy goals.

Is that still the case?

We are not quite ready to answer that question.

We started to have some conversation on the team about how we can look at the modeling that we did, what has occurred in years one and two of the housing levy, what we anticipate might be ahead.

There are a few reasons that this is happening.

It was really interesting to see, thanks to Nathan's work, that this trajectory of spending on the housing levy is very similar to what occurred in 2016. the staff team is very interested in achieving goals and they often front load work and investments in the early part of the housing levy cycle both because you have that goal in mind you want to achieve the goal also because it only gets more expensive every year thereafter The other piece at play here is that at least one of the projects that we funded with the housing levy is a partial award.

So we sort of counted units, but it's not fully funded yet, and it will hopefully come back through later in the cycle.

It's a supportive housing project.

So again, one of the projects that's waiting for other resources to come through so that it can become a reality.

But we do have other major projects that are in process, the Lake City Community Center, the Mount Baker redevelopment, where we are waiting to see fund assignments, and those are really significant investments for our office that will likely make a difference in terms of levy allocation as well as PET utilization and leverage of other sources.

So we'd like to come back to you on that question.

I'm not sure when we'll know more, but we'll get back to the team and come back to you on that.

We are, I think, also looking at, we want to be measuring several aspects of what we modeled versus what is actually playing out.

So unit typology, project typology, per unit costs, total development costs.

So those are some other things that we're hoping to look at and bring back.

Thank you.

That's helpful.

I look forward to that.

And I think it's good to see, you know, again, it's good to see the 47% unit goal piece there.

And I totally understand the front loading.

We see that across the board with our levies.

And, you know, we know that costs have been rising.

So I think that certainly makes a lot of sense.

I do want to make sure that we get that follow-up information around the levy goals and the PED dollars.

I totally understand things have continued to shift, but want to make sure that we are tracking that.

And I want to, maybe I'll turn now to slide 18, I think it is, and just say, I think this is, wait till we get there.

Maybe it's not that one.

Well, we'll use this one, but I think you had maybe on a different slide in the corner, a number around the 2026 MHA projections.

And I've lost what slide that is, but it's slide six.

Okay.

Slide six has that we're projecting 2026 MHA revenue at 20 million.

and we know that in 2025, that revenue was 47 million.

And so I just wanna make sure we get a little bit more information on that stream and it's my understanding that there was some projects that completed in 2025. So that might've been more of an outlier number.

If you can speak to that, I think that'd be helpful.

We've talked about the difficulty of projecting MHA as it relies so much on the real estate cycle that is also difficult to predict.

There have been some conversations in the city budget office around improving our predictions of MHA revenue and they're ready, I think, for a little bit more accuracy, but it's really difficult for us to to really hit that number right, I think.

Yeah, you heard the commenter earlier talking about some of the larger projects that came through in 2025 that contributed these higher payment amounts, and that is true.

That's also happened in other years where you've seen different types of development activity that have contributed higher amounts of MHA.

So this is difficult.

We feel this is a very conservative projection.

This is the 20 million is where we landed for housing levy modeling as well to attempt to project our leverage of other city sources.

It's just conservative and I don't have a better answer on that at this time, but the city budget office is aware of this issue and they've been tasked with trying to identify some better methods too.

project MHA.

Okay, I think that's helpful.

And then I think it's my understanding, are we at seven million in the door of this year for MHA?

So the last number I saw was just over nine.

Got it, thank you.

I trust that your numbers are more recent than mine.

I think we had looked at maybe the close of Q2.

That's right, it's always changing.

Yeah, that's helpful.

And it may be different than nine now, but that's the last number I saw, I believe.

Got it.

And I think it's, I ask, I know it's something we've had conversations about in the past and I think it's one of the things I just have my eye on with the sort of a concern around the changes in the market and the way that the changes in market rate housing could potentially impact MHA revenue.

just as is seeing that permits are down and we have a lot of work to do I think as a city to make sure that we are supporting our affordable housers with the work that you've already outlined today and to make sure that we're continuing to grow the market rate production and to strike the right balance for us as a city.

So that's certainly something that our office continues to be invested in and we look forward to ongoing partnership with Office of Housing on that work.

I want to turn now to the, I want to say it's one of your last slides and comments and colleagues, I've just got two more questions and then I'll be turning to you all.

If we can go to the 2027 NOFA.

Let's see here.

Maybe it's the last slide.

I think this is where we were talking about this.

Maybe it was just in your comments at the end.

I believe that this NOFA that's out right now does not include any PET dollars.

And so can you just share more about, and I think you mentioned the plans for a second NOFA later on in the year.

Can you share more about what we might anticipate to see there and how that represents the learning that you've done over the last year with the stabilization investments?

Yes, so we've had There's always, and as these are unprecedented times, thank you, Councilmember Reink.

This is a very challenging year for the budget and doing the best we can to plan for mitigating potential cuts and also continuing to support the existing pipeline and investments that we need to make now.

So I think it's a constant battle to strike the right balance.

There's a sequencing that happens where we release our notice of funding availability in June and we have to make our best assessment of available funds at that time to release publicly.

So we released 110 million in June that included the housing levy and some MHA funds.

We've also clearly stated that we have 26 million of Jumpstart PET funds that are in a federal mitigation fund hold.

and we have a $6 million Jumpstart payroll expense tax rental assistance obligation and a $5 million Jumpstart payroll expense tax reparations obligation.

We have been released $20 million to commit to debt restructuring and or the current open NOFA.

So that will be, we'll see what comes in with this current NOFA and then advertise the proper amount of Jumpstart payroll expense tax available for the debt restructuring offering a little bit later in the fall.

Thank you for that.

And just want to make sure I got the comment at the end.

I think it's really helpful that the 20 million could go either towards the existing NOFA that's open right now based on what applications come in and the projects, competitiveness, demand, or it could go into the debt restructuring later on this year.

That's right.

Fantastic.

Thank you for that.

I really appreciate that.

And colleagues, I will turn to you for questions.

Vice Chair Lynn, you're recognized.

Thank you, Chair.

I've got a few questions.

So one, and we've spoken about this before in terms of our goals and describing the goals in terms of units versus people or bedrooms.

And just wanting to, again, I'm excited that there has been this ongoing effort to have larger family-sized units and don't want sort of previous sort of goals that were just based on units to sort of hold up that work or, you know, inadvertently for us to be sort of dinged by the fact that like we're serving more people with larger units, but it's, you know, maybe less units than a studio.

So could you just talk about the latest of any efforts with other funding partners, state partners, to start to transition how we talk about our goals.

What would we need to do to start to kind of have a a transition like calculator that shows here's how many people we thought we were gonna serve in terms of 3,100 units, how many were studios versus how many people we can serve with multi-family units.

and if there's anything we need to do in terms of like the upcoming state legislative session to sort of have something in sort of state priorities to also kind of recognize that units sort of inadvertently prioritizes these studios.

We have had some conversations, it's not as current as some of our other conversations, but we have spoken with some of our other public funding partners about this challenge.

And you'll note in the actual report, so this is a high level summary that's been provided, but in the reports we do talk about bedrooms funded, correct Nathan?

Potentially how many people could be housed, yes.

So that is an improvement that's been made.

So we reported the bedrooms as well as the potential number of people that can be housed with these resources.

We're trying to bridge, so moving from a pure accounting of units to more talking about the actual people living in these homes.

And perhaps this presentation will look different next year when we talk about the high level, maybe the numbers will be different.

Our colleagues at King County have also started looking at this differently because when you do a per unit cost on a three bedroom, it's very different than a per unit cost on a studio.

But when we talk about it per bedroom, that's really different.

And so there are smart folks kind of uncovering these things bit by bit.

And we're engaging with them in a variety of different groups.

So Nathan participates in a public funder data group that's been talking about how to improve data, how to be more strategic.

There's a lot of different conversations that they've had on this topic.

but we could do more about how this plays out intentionally.

I can't think off the top of my head with the state things that could change, although I've seen some things that have cropped up over time where there have been unintentional consequences when we've set thresholds by unit numbers.

And if a project changes to be three bedrooms, then it falls below that threshold and can't achieve the benefits of, a state program, for example.

So that's definitely on folks' minds.

They are aware of the challenge.

I think folks are interested in trying to make that better, but more to come there.

Okay, great.

Well, if there's anything that we can do to help support that transition with talking to our county colleagues or any of our state colleagues, certainly would be happy to support that effort.

Another question, so talking about sort of the, you know, the up zone to neighborhood residential, which doesn't have MHA, and now, you know, we can, builders can build very similarly in terms of what they're allowed to do in NR versus some of our LR, especially like LR1.

I'm just wondering what, if anything, you're hearing from market rate developers.

I'm wondering if you've heard anything from SDCI, from the permitting data, if they've started to notice a shift yet, or just want to keep an eye on that.

And so certainly could SDS DCI, but just wondering if you've heard anything.

I think from the conversations we've had this year, many of us were saying, let's see what happens in 2026 for sure.

And then perhaps into 2027 and keep close tabs on it.

I think it's similar to what we talked about with affordable housing providers.

You have a lot of sites that are in play and underway and all developers are pipeline planning and is now starting to react to different changes that the city's made, so it seems like we'll start to see that sometime in the next year, but that's a good one to watch.

And then I'm going to ask a bigger picture question, just about the housing market in general.

I think we've seen rents flatten, which is great, maybe even going down a little bit.

We've seen job losses, which I think is relieving some of that pressure on our housing market.

So it's not great to have job losses, but the silver lining is maybe a little bit less pressure on rents.

And I think as we look to this longer pipeline, I think it's important for us to keep in mind what's happening in the market rate side of things, just because it can really influence whether it's things like MHA payments or just things like competition, especially at the 60% studio level.

and also they say just a little bit concerned about a potential downturn in the economy and what that could look like for our housing market, and that's hard to predict, just kind of thinking back to what happened in 2008. So this is a, you know, and we can take this offline and talk more later, but I'm just wondering how much, you know, you are sort of hearing from sort of market rate participants.

Obviously, we've been hearing a lot about, you know, the permits being down and the difficulties of building.

And I do think partially, In my mind, it's the cost to build, but I also think partially what is holding back developers is sort of the uncertainty in the economy, the uncertainty in the job market.

I think when Amazon was just hiring and people knew rents were going to continue to climb, it was sort of easy.

to bake that into your pro forma and be confident that like, hey, it's expensive to build, but we know that we're gonna be able to lease up because so many people are moving here.

I think it's a difficult time right now with the economic uncertainty and again, the job market for developers to be confident.

And so again, so just big picture, I guess I'll just sort of make one last sort of comment and sort of observation.

which is we've increased our affordable housing investments so significantly over the past few years, which is wonderful.

And I think we're finally, you know, I think because of how long it takes to build housing, you know, we didn't sort of feel that impact immediately.

But I'm hoping in the next, you know, coming couple years that we will start to feel the impact of these significant increases in our investments.

and at the same time there's sort of this less pressure from the economy.

But anyway, just any sort of observations about in general what's happening in our housing market or our economy or sort of how that might influence some of your thinking or some of our investments?

The one item you didn't mention is vacancy, and in the city right now, the last measure we have, citywide vacancy is around 6%.

There's a lot of high cost housing markets that are very jealous of that.

It's also a measure of sort of what's happening in our market.

There's been a very significant building boom of a similar typology of apartment, and we are at the office trying to react to that.

Can I just make sure I understand?

So 6% is a little bit higher than these other high-cost areas.

Correct.

And that is sort of a good thing to a certain degree for renters because it means there's some supply there and a little bit helps with the rents.

Is that kind of correct?

Correct.

So there's a little bit more choice for renters on the market right now.

And even though we hear from renters, it doesn't feel like there's a lot of choice and it doesn't feel like it's affordable or accessible to them.

So I do want to say that by the numbers that we see on these reports, there are 6% are vacant in the city.

and I think the other part of that is that generally investment seeks a rising market and perhaps we are not there today in Seattle.

So that's something to be watching.

There are other factors at play as well.

I was just hearing from somebody who had a conversation about how challenging insurance is. and that Seattle in particular is facing challenges around insurance because of perception, real, perceived, all these things.

So there's a lot that plays into those types of decisions around risk tolerance for insurers and investors.

and it's hard to put your finger on exactly the thing that is going to make the difference, right?

For us, what we control at the Office of Housing is the way that we spend our funds.

And so this is what we were talking about with our team to ensure that we are investing in affordable housing that is truly below market and that will compete in this current time that we're in where we have 6% vacancy.

We have a significant number of 60% studios that are open and waiting for tenants.

So we want to see much lower affordability levels below 50 AMI, below 40 AMI, below 30 AMI.

That requires deeper investment from us upfront capital.

It may require operating that we didn't necessarily plan for.

And then also family-sized homes.

More competition for family-sized homes at lower income levels, that's always needed.

We've heard time and again that our developers that build those Those buildings, the family size homes and the lower income units go fast.

And these other typologies, studios at higher income levels are not renting up as quickly.

Now it depends on neighborhood.

There are a lot of other factors at play, but this is what we're looking at.

What are the things that we can control to respond to these market conditions that we're in?

And we're looking at as much data as we can, trying to be better about that.

We've improved significantly and we're trying to just keep up to date, make sure that we're looking at the most current data to make these decisions.

applications.

Thank you.

Just one last sort of question, maybe more of a comment.

You know, I appreciate the thinking going into sort of your siting policy, thinking, you know, how do we make sure that we are investing sort of, you know, in areas that we haven't invested in previously while also being mindful of the pipeline, right, where people have already sort of bought properties and, you know, not wanting to and leave our developing partners sort of in the lurch because we've shifted.

It takes so many years for them to plan and they make such significant investments.

And then when we make changes, that really is hard for them to pivot so quickly.

So I appreciate sort of the long-term thinking there.

And I guess it is sort of a question of given how we kind of rely upon our partners to go out and identify sites and in some ways are more of a passive waiting for people to bring us projects.

And that's going to result in, I think, certain lower cost areas rising to the top.

How do we change to be a little bit less passive, a little bit more proactive in developing that pipeline.

I don't know if you have any gut thoughts or reactions.

Yeah, absolutely.

I mean, that is the goal of the work that we are doing now, is to get to a more active stance on what geographies do we want to see investments from the Office of Housing land and why.

and so that is very much the origin of this effort.

That's what the team is taking on.

We have some early indications that there's some great opportunities in different neighborhoods to make better investments and try and land some investments.

We've been talking to our colleagues at Social Housing PDA and they're really interested in striving for investments in places that the Office of Housing has not invested in areas of opportunity as well.

So we definitely want to get to that and that's part of our goal.

So we're talking this year, it would be great if we could pull this off for the 2027 NOFA where we are providing more active guidance or threshold criteria priority points for certain types of geographies that's on the horizon potentially.

This year we for the first time did not require market studies because we haven't seen the benefit of those and instead our team is taking on review of data, market data, sub-market data to help inform and provide analysis and backing for particular projects in neighborhoods around what they're bringing forward for their rent levels and their bedroom sizes and if that's gonna be competitive in that area.

So it's both of those things.

where do we need housing, but also how should it be built to be competitive in that neighborhood?

So we're trying to kind of improve on both of those fronts at the same time.

Thank you so much, and thank you, Jer.

Thank you so much, Vice Chair.

I really appreciate those questions, and I feel a lot of alignment, I think, in the spirit of where you were heading.

And I think on both the previous questions around the need to make sure that we're doing strong investments and partnership with OH, strong investment, or not investments, but partnership with market, and also so exciting to hear about the siting work.

I think that's an opportunity to really build on where we're here and be responsive to what we're hearing from folks.

And I know that obviously we have the Montlake property now and we have the property that we're in the Central District that will be affordable homeownership.

and I'm looking forward to more opportunities to build on those kinds of acquisitions and support innovation and place-based development in high opportunity neighborhoods.

I think that's fantastic.

I do wanna ask one final question before we wrap up here, which is just to go back to some of the points that were made around the studios and the gaps in the market.

There was a, maybe this is a comment, but something I've heard from our partners was around the real challenges that folks have had on filling those studios, in part because of the fact that when we have those studio units that are around 60% AMI, in particular, they struggle to compete and attract folks because of the affordability level.

And a story that I heard that I thought was a really exciting example of responsiveness from OH was in some of the debt restructuring, being able to invest and buy down the cost of those studio units.

And I wonder if you can speak to that because I think when we hear debt restructuring, it's maybe for some folks here, we're like, yes, but I think sometimes there can be like a, wait, what do we mean?

And it's looked like a couple of different things in the way that you've responded to our partners over the last year.

So can you speak to that particular approach please?

Yeah, so this phenomenon of vacancy in 60% studios has been happening for a couple of years and increasing in concern.

And we've tried several approaches.

So we provided significant rental assistance and the federal government provided significant rental assistance.

We offered operating stabilization grants that went to organizations and they were able to sort of target within their project portfolios where those funds should land.

We've also provided additional urgent operating stabilization support, again, to the organization as a whole, and they decide where those funds go.

The debt restructuring is different.

It's a tailored approach specifically for one building, and it permanently changes the project for the long term.

and is responsive to some of these conditions that we're experiencing right now for projects that have not been open for very long but are really struggling to lease some of these projects.

So they've been a 60% studio.

We're able to underwrite those lower, down 50, 40, 30 AMI.

It depends on the project and many of those are still underway now but it's a deeper impact for a single project and a longer term investment and it's much more in line with the way that OH typically invests in projects and our partners but it is also a new strategy and the team is continuing to learn from that.

It'll be interesting to see which projects come through this year but we've heard from our partners that there is interest in continuing this approach and that they have still more need with their portfolios to address some of these issues of the mismatch with incomes and rents and just the realities of different sub-markets.

Thank you for that.

Okay, final, final question.

When we talk about the debt restructuring work, the rental subsidies, the various approaches that OH has taken and that you've reported back to us, I wonder if you're able to sort of share any early understanding of one of these strategies being the better bang for our buck or the most effective, or whether we're seeing that this is a challenge in our affordable community that requires an ongoing multi-pronged approach when it comes to how you're approaching the operating subsidies and restabilization of the sector.

I think we're still learning.

I like both and I think with the housing levy and our jumpstart spend plan that you saw earlier in the slides, having an array and a diversity of spending categories to cover the full ecosystem of needs is really important.

and we need to do capital investments and we need to support operations.

It's good when we can directly allocate funds to a project for a specific purpose.

It's more in line with our practice and what our office is really, it's our bread and butter.

So that's really what we're accustomed to doing.

I think the debt restructuring shows a lot of promise.

It's gonna be interesting to see how those current awards play out.

in these initial years, and then again, what comes through.

But that's, I'm kind of, I think staff, just from the few conversations I've had with our staff team, there's a bit of a lean toward debt restructuring investments, I think at this point, as opposed to more operating stabilization grants, just because we know exactly where those are landing and what they're achieving in specific buildings and for specific apartments.

So that's my initial answer.

Thank you for that.

And I know we have a lot more work to do in this space, and I look forward to continuing to partner with you and your office and the fantastic and smart staff team there at the Office of Housing on this work.

We know that the operating and maintenance needs were something that, as we talked about earlier in this year, we've seen across the country be a gap, right?

Because we've invested in production, but we haven't invested concurrently in preservation and stabilization.

So I know that Office of Housing is not alone in the need to be responsive to what's happening in community.

And I look forward to continuing to work and learn alongside you as well as our colleagues around the country.

And with that colleagues, unless I see any further hands, just gonna check on my screen quickly here.

Okay, fantastic.

That is, thank you all so much for joining us.

We really appreciate you.

Is there any further business to come before committee today?

Alright, seeing none, this concludes the August 12th, 2026 meeting of the Housing, Arts and Civil Rights Committee.

Our next scheduled meeting is on September 9th.

Thank you all so much.

It is 3.53pm and we are adjourned.