Zahilay’s $1 billion workforce housing initiative approved by Council

November 12, 2024

The King County Council voted Tuesday to approve a plan to create a $1 billion Regional Workforce Housing Initiative, a bold step forward in addressing the region’s housing crisis. Introduced by Councilmember Girmay Zahilay, the Regional Workforce Housing Initiative directs the Executive to develop an implementation plan that utilizes the county’s excess debt capacity to partner with housing agencies and developers in creating permanently rent-restricted, multiple-unit housing for the region’s workforce – in other words, priced to be affordable to working class families.

“To properly tackle the housing crisis, we must use every tool available to us to act urgently and aggressively,” Zahilay said. “Today’s vote is an investment in the workers who power our economy, who deserve sustainable and affordable housing close to where they work.”

Recent data from King County’s Regional Affordable Housing Task Force showed that more than 124,000 low- and moderate-income households are cost-burdened in King County – meaning they spend more than a third of their income on housing – with communities of color and renters disproportionately likely to be severely cost-burdened.

“As local developers focused on delivering attainably priced multi-family housing to underserved communities in King County, we strongly support Councilmember Zahilay’s motion to establish a regional workforce housing initiative,” said Peter Nitze, president and CEO of Nitze-Stagen. “The County continues to suffer from a lack of housing affordable to residents earning 80% or less of the area median income (AMI); and current market conditions – specifically, elevated cost of borrowing, historically high operating costs, shrinking housing subsidies, and declining revenues due to economic vacancies – have led to a dramatic reduction in new development, further exacerbating this crisis. Now is the time for the County to leverage its strong credit and $9 billion of debt capacity by partnering with mission-aligned developers who, with that support, can provide sorely needed workforce housing rapidly and cost effectively.”

The approved legislation will consider which income levels to target with the new housing – including at or below 50% of area median income (AMI), at or below 80% AMI, and at or below 120% AMI. The Affordable Housing Task Force set a goal in its five-year plan to eliminate cost burdens for all households earning 80% of AMI or less. The implementation plan will include an estimate of how many units could be built with $1 billion debt financing and the mix of income levels that would make this model sustainable.

The motion also prioritizes fair labor practices, including prevailing wage rates and the utilization of King County’s priority hire community workforce agreement program in development of the housing.

“Affordable, quality workforce housing is a critical need in King County,” said Heather Kurtenbach of Ironworkers Local 86. “This motion has the potential to bring hundreds of jobs to our region and help union members afford to live close to where they work. By supporting ironworkers and others who are pivotal to our workforce and daily life, we can build stronger and more vibrant communities for all. We appreciate the opportunity to work with Councilmember Zahilay on this proposal and hope to see support grow for his legislation.”

Since the introduction of the proposal in September, Zahilay has worked with stakeholders to amend the motion to explore the possibility of a revolving construction loan fund that could be used to build and sell housing units to income qualified homebuyers. Further amendments include prioritizing historically and currently underrepresented developers, transit-oriented development, and fair labor practices. The motion also calls for the Executive to analyze the potential effects on the County’s financial standing, such as its strong bond rating, and opportunity costs that could negatively affect the County’s work meeting low-income housing needs.

The implementation plan is due back to Council by June 15, 2025, along with the necessary legislation to put it into action.

ADDITIONAL QUOTES:

Patience Malaba, executive director of the Housing Development Consortium: “Workforce housing is a vital part of addressing King County's pressing housing needs. By leveraging public-private partnerships and focusing on permanently rent-restricted homes, this initiative paves the way for sustainable and inclusive development that meets the diverse needs of our workforce. It recognizes the importance of proximity to jobs, which is crucial for both reducing housing instability and supporting economic growth. As housing providers and developers, we are committed to working alongside King County to create affordable housing solutions that ensure our communities remain vibrant and accessible to all.”

Robin Walls, president and CEO of the King County Housing Authority: “The King County Housing Authority strongly supports the Regional Workforce Housing Initiative. We know from 25 years of experience that leveraging King County’s bonding authority is effective. This initiative has the potential to make a significant impact, by connecting public, private, and nonprofit partners, leveraging our shared development expertise, and creating more affordable workforce housing across King County.”

Nicole Grant, IBEW Local 46: "We need bold and urgent solutions to make sure that working people in King County have access to affordable housing. Councilmember Zahilay's plan will help support our working families by providing a blueprint for sustainable and affordable workforce housing that allows us to live in the comfort, dignity, and stability that we all deserve. IBEW is proud to support this legislation, and we need this investment in our workforce now more than ever."