An aerial photo of Downtown Bellevue
The City of Bellevue has been slower than King County at creating affordable housing using sales tax proceeds. (Credit: Jelson25, Creative Commons)

Funding for an affordable housing project for domestic violence survivors moved forward with unanimous approval at Bellevue’s most recent city council meeting. The new facility, to be renovated and serviced by LifeWire, will provide 25 affordable housing units for women and children at risk of homelessness. Bellevue’s $1.6 million contribution, combined with King County’s $4.3 million award towards the project, will cover renovation costs before the facility’s expected opening later this year.

However, the city had made $6 million of its designated affordable housing funds available in this Request For Proposals (RFP) process, and this was the only project (out of three applicants) that received funding. Therefore, approximately $4.4 million of the city’s funds remain on the table for 2021 and will not be allocated for at least several months’ time.

Bellevue’s current funding for affordable housing is a result of a housing bill (HB 1590) passed in the 2020 state legislative session. The legislation provided King County and other local jurisdictions the authority to levy a 0.1% sales tax to fund affordable housing and supportive services for people making less than 60% area median income (AMI). Additional stipulations included:

  • At least 60% of collected funds must be spent on the construction, acquisition, maintenance, or operation costs of an affordable housing facility.
  • No more than 40% of funds may be spent on the operation of behavioral or housing-related services.
  • Funded housing must serve particular at-risk populations (listed below).
A list of eligible populations that funds collected from HB 1590 taxes must serve. (City of Bellevue)

The law also provided a mechanism for cities to preempt taxation from the county by voting to pass their own local tax instead. Back in October 2020, this proved to be quite the popular option – at least eight cities, including Bellevue, chose to preempt County action through the passage of their own 0.1% sales tax.

This gave these cities more control over how the collected funds could be used, but came at a cost: with cities going it alone, significant funds were made unavailable to King County, who intended on using collected revenues specifically for deeply affordable housing (less than 30% area median income) and bonding to speed up delivery via King County Executive Dow Constantine’s Health Through Housing initiative. At the time, city staff estimated that Bellevue’s tax would net approximately $8 million per year in funds that could stay in Bellevue, but King County Director of Community Services Leo Flor noted that this would deprive the county from implementing its full approach.

Flor also highlighted the speed at which the entire County could act compared with individual jurisdictions each going it alone. By planning with a regional focus, King County could act at scale and utilize efficiencies in ways that a piecemeal, city-by-city approach could not provide. And this seems to have been borne out in practice: King County, which has used its HB 1590 funds to acquire hotels and convert them to permanent supportive housing units for people experiencing chronic homelessness, estimates that 1600 units of deeply affordable housing countywide will be operational by the end of the year. The closest facility to Bellevue, the Silver Cloud Inn in the Overlake neighborhood of Redmond, is moving forward as expected despite significant backlash from misinformed neighbors.

In contrast, Bellevue’s allocation of its HB 1590 funding has been markedly slower, with separate months-long RFP processes for the city’s behavioral services and construction/operation portions of funding. And although the city did receive substantial requests for its behavioral health funding last summer – $3.3 million in requests for approximately $1.6 million in available funds – this winter’s RFP for construction & operation funds saw only three applicants seeking a combined $3.1 million from an available $6 million. Since only one of the three projects was actually eligible for the funds (staff noted that the other two applicants were still five to nine years away from full construction!), this led to the aforementioned $4.4 million surplus that is still looking for projects to fund.

Timeline of Bellevue’s allocation process for HB 1590 funds. Human Services funds were awarded at Council’s August 2, 2021 meeting. Funding allocations for capital & operation have been approved by Council, with formal action to come at a February meeting. (City of Bellevue)

This certainly does not reflect a shortage of need for deeply affordable housing in Bellevue. Numbers from 2017 point to a citywide deficit of nearly 4,000 housing units for people making less than 30% of area median income. More recent figures that would reflect the impact of the COVID-19 pandemic do not currently exist, but city staff will be returning later this year with a new Housing Needs Assessment that will have updated numbers. Adding in the pressures created by a projected influx of Amazon workers moving into the city in just a couple years’ time, it’s imperative the city use the excess funds as quickly and strategically as possible to support affordable housing.

Staff, Council remain optimistic about program’s future

Mayor Lynne Robinson. (City of Bellevue)

Both City Council and staff floated different options for what could be done with the city’s unexpected surplus. When Council voted to go it alone with HB 1590 funds, a universal refrain was Councilmembers’ desire to foster a positive relationship with King County and maintain a commitment to a regional approach. To that end, Mayor Robinson has suggested donating excess funds to A Regional Coalition for Housing (ARCH), a partnership organization between King County and East King County cities that supports affordable housing development in the region. This would grant King County some renewed authority over how these funds could be allocated.

“It’s so hard…to see this funding available and to be anxiously wanting to provide funding for these projects, but we’re just beginning. It’s a process, and I appreciate the work we’re doing. I hope going forward we can move faster on funding other projects.”

Bellevue Mayor Lynne Robinson.

An alternative proposal (or one that could be used in conjunction with the Mayor’s suggestion) came from Councilmember Zahn, who highlighted points from the city’s updated Human Services Needs Assessment presented earlier that evening. Citing the need for behavioral health services in Bellevue and near-universal support from her Council colleagues on the importance of behavioral health funding, she suggested that some of the surplus funds, originally intended for capital projects, could instead be redirected to investments in behavioral health services. Because the city is required by law to spend no more than 40% of collected funds on behavioral health and supportive services, this would not be a viable option for the entirety of the city’s surplus. However, it could still provide a home for several hundred thousand dollars in excess funds that might not otherwise be used at the local level in the near future.

There also exists the option to let the funds roll over into next year, retaining their earmark as capital projects funds. Since staff ascribed the meager application rate to lack of developer awareness of Bellevue’s program at the time, they expressed confidence that applications will increase in the future with increased awareness. This increased notoriety, combined with Councilmember Robertson’s suggestion of keeping a continuous RFP open (instead of the limited-time RFPs previously utilized), might indeed increase the application rate to desirable levels. However, formal decisions on how to spend the excess funding will have to wait until the end of the first quarter of the year. In the meantime, staff are evaluating the implications of each option and intend to present these, as well as a wider discussion on Councilmember priorities for HB 1590 funds, during a Council study session in a few months’ time.

Although certainly important, this excess work highlights how the city going it alone has provided additional tasks for a planning staff already with a lot on its plate. During discussions around creating a local eviction moratorium last summer, staff noted that legal scoping and fact-finding might take away man-hours from HB 1590 work – work that wouldn’t need to be conducted if the city had elected to stay within the larger County proposal. With further important planning work coming later this year around the Wilburton and Bel-Red light rail stations and the long-delayed upzone plans, which have limited housing growth, staff may have to strike a delicate balance between different projects to meet desired deadlines.

As Councilmembers and staff repeatedly noted, the city still finds itself early in the process, so it’s certainly foreseeable that funds collected at the city level will make a significant difference in Bellevue’s affordable housing availability over the long-term. However, looking at what King County has been able to accomplish with speed and urgency in the same time frame, it seems Bellevue will need to act with renewed vigor to make their solo venture seem worthwhile.

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Senior Eastside Reporter

Chris is a UW Environmental Sciences graduate who moved to Bellevue in 2015. When he's not busy being an urbanist fox on the internet, he's working on the Eastside to support efforts reducing greenhouse gas emissions and going to city council meetings to denounce the hegemony of automobile infrastructure. Follow him on Twitter at @Deutski1.