For the avid readers out there, the phrase “housing benefit district” may sound familiar. Interestingly, the promising concept from last year shares very little with the bill introduced during the first week of the 2023 session.
Last session, a bill with the same name proposed to create an optional funding mechanism modeled after special purpose districts, such as a transportation benefit district. The bill allowed a city or county to create a housing benefit district (HBD) via
ballot or councilmanic vote to levy a sales and use tax. In addition, the district could levy a property tax by ballot measure. The revenue must be used to create affordable low-income and middle-income housing and community development projects within
the district.
This year, HB 1111, sponsored by Rep. Cindy Ryu (D–Shoreline), doesn’t provide cities
with a new housing funding option, but instead creates a pilot grant program. Here’s how it would work:
- The Housing Finance Commission would create a new, pilot HBD grant program.
- A city that is selected to receive a new HBD grant would then create a HBD within a “station area.” "Station area" is defined as an area within one-half mile, including contiguous full and partial blocks as defined by the street grid,
of a major transit stop that is zoned to have an average minimum density of at least 15 dwelling units per gross acre.
- Development within the HBD must roughly be equivalent to a third market rate, a third for moderate income, and a third for low to extremely low income.
- The city would need to create a governance structure for the HBD, including a board.
- The city also needs to audit the development that occurs within the HBD to ensure it complies with the affordability requirements.
- The state also creates a HBD Advisory Board.
It’s unclear how this proposal would incentivize a city or a builder to create new affordable housing, but it does seem to create a lot of local and state procedural structure. An alternative could be for the state to simply appropriate grant funding
to the Housing Finance Commission to fund land acquisition or community land trusts, a proven structure that results in sustainable affordable housing.
Date to remember
HB 1111 will be heard in the House Committee on Housing on Thursday, January 19 at 8 am.