City of Spokane to spend $9 million to create or rehab 67 affordable housing units

Sixty-seven households struggling to afford a home may soon find relief as housing units are built, bought or rehabilitated after the Spokane City Council approved spending another $9 million to assist with 10 developments.

The nine projects, totaling $42 million, range from constructing a 35-unit affordable housing development for seniors to acquiring a fourplex to house seniors or those at risk of homelessness. The projects are collectively expected to create or rehab as many as 149 housing units.

Except for one project rehabilitating a 17-unit building for those with chronic mental illness, the city is not funding the entirety of any of the projects, instead providing anywhere from 9-82% of the projects’ costs. Additional funding to support the projects is expected to come from a variety of sources, including additional state, federal and local grants, as well as the developers themselves.

More than $5.8 million of the funds provided by the city will come from its affordable housing fund, often referred to as the 1590 Fund in reference to the state law that allowed cities to raise sales taxes by 0.1% in order to support affordable housing projects. That fund, which brings in approximately $6 million per year, has previously supported five other projects which collectively built or rehabilitated 204 housing units, according to city spokeswoman Erin Hut.

The remaining funds offered by the city come from a federal grant from the U.S. Department of Housing and Urban Development.

The city believes its support will assist in the creation of 67 units at an average cost of around $135,000 per unit. Some of the projects will cost the city significantly more to create an affordable home than others, such as a $468,000 project to build a single three -bedroom, three -bathroom home in the Grandview/Thorpe neighborhood which will be available for a person or family earning 60% or less of the area median income, which is $41,100 for a single -person household or $58,200 for a family of four, for example. The city will provide $327,000 in HUD grant funding for that project.

“I was a little shocked we were funding a single-family home for a bit over $400,000,” Councilman Michael Cathcart said in a Monday interview.

Another project $10.2 million project to build a new four-story apartment building with 85 housing units will receive around $926,000 from the city’s affordable housing fund. A presentation to the council claimed that city funding will assist in the creation of 36 to 43 affordable units at a cost of about $23,000 of city funding per unit.

Thirty of the units partially funded by the city also will not provide new housing but will rehabilitate existing buildings.

The funding was approved on a 5-1 vote, with Cathcart voting against. He argued that city staff had not followed city code when seeking projects to fund, pointing to a lack of focus on mixed -use projects that could have included, for instance, first -floor retail, or prioritized projects that would result in home ownership.

“It’s important, because (home ownership) is how we build generational wealth,” Cathcart said. “We have to be smart about how we’re building and where, the efficiency and cost per unit. If we can do all that correctly … we can contribute to generational financial stability rather than a one-time financial support.”

One project being funded through the city’s affordable housing fund will support single-family home ownership for families earning under 60% of the area median income for seven households. The city provided $1 million towards a nearly $3.3 million project to purchase and rehabilitate seven homes that will later be sold to eligible households.

The city does have another program to assist first-time homebuyers by providing as much as 25% of a down payment for a home purchase, which has helped 19 families or individuals purchase their first homes.

However, that program was funded by expiring federal pandemic relief money, leaving the city’s affordable housing fund as the only remaining pool of money currently available to encourage home ownership for the lower -income residents, Cathcart said.