Tehaleh developers had option to build low-income homes. They paid nearly $770k instead

Tehaleh, a 4,700-acre mixed-use development south of Bonney Lake, is taking shape. But will it be as affordable as Pierce County intended?

When complete, Tehaleh is advertised to feature “more than 1,800 acres of parks, trails, and open space, up to 9,700 homes, and 475 acres dedicated to employment uses,” as previously reported by The News Tribune.

According to contracts with Pierce County, developer Brookfield Properties had the option to build 711 “low income” dwelling units in Phase 2 of the Tehaleh development or pay a fee instead.

The News Tribune asked county officials which route the developer took.

Brookfield Properties chose to pay $768,588 to avoid building low-income units, county communications manager Bryan Dominique told The News Tribune last month.

Pierce County plans to use the money to support affordable-housing development, which could be at the Tehaleh site, though no developer has expressed interest in doing so yet, Christina Rohila told The News Tribune Monday. Rohila is a communications specialist in the county’s Planning and Public Works department.

In an email to The News Tribune Tuesday, senior vice president of operations Scott Jones said Brookfield Properties agreed to pay fees to Pierce County for each new Phase 2 Tehaleh neighborhood that didn’t include low-income housing.

“The intent is that Pierce County can use these funds to support low income housing programs within the county where it will have maximum impact for residents. Tehaleh is still a fair distance from significant job centers and is not served by public transit, both of which are critical aspects for low income households since proximity to employment and other services is important,” Jones wrote. “If low income housing is built in Tehaleh in the future, Pierce County would reimburse Brookfield based on the number of low income households built.”

Since Tehaleh’s inception more than 50% of the homes sold have met criteria for low, moderate or median income households, Jones said.

“As a best practice, all housing types and options are reviewed for viability with each new phase of development and this practice will continue as the community continues to grow,” he said.

Low-income housing targets

As of June 2023, Pierce County’s area median income for a family of two was $82,560.

According to the 2023 Tehaleh Annual Report, as of July 26% or 831 of the Tehaleh homes built in Phase 1 and 2 were considered attainable for median income households (those earning between 100%-200% of Pierce County’s AMI). Twenty six percent of homes built, or 818, were considered attainable for moderate income households (those earning between 80%-100% AMI). Thirty-nine homes, or 1.2%, were considered attainable for those earning less than 80% of the county’s AMI.

As spelled out in the report, Pierce County’s goals for Tehaleh were to have 10% of homes attainable for low-income households, 10% attainable for moderate income households and 10% attainable for median income households.

This project is the only one in the county with an affordable-housing requirement because it was a Planned Unit Development, Rohila said.

“The fee in lieu provision was instituted as part of the Phase 2 approval,” Rohila said. “The original affordable-housing requirement only required that they set aside land for the purpose.”

The fees Brookfield Properties have paid will be held in an account until they can be allocated for future affordable-housing projects, said Jordan Chames, communications coordinator with the Pierce County Human Services department. Pierce County Human Services allocates those funds through a competitive application process, and applicants are rated based on criteria like proximity to transit, affordability, local demand and cost-efficient construction, he said.

Generally speaking, affordable housing is restricted to occupancy by income-eligible households, and rents are set at an affordable level to each target population, Chames said in an email Wednesday.

Households that earn less than the area median income typically need help with housing and Pierce County uses local, state and federal funds to construct housing for families at or below 60% of AMI, he said.