A new regional revolving loan fund will support affordable homes close to bus or rail corridors throughout the Puget Sound area.
A coalition of public, private, and nonprofit partners has launched a permanent fund to support equitable affordable-housing options near public transit across the Seattle metro area. The money is arriving right on time.
The new $21 million Regional Equitable Development Initiative Fund (or REDI Fund) will give developers access to low-interest loans to acquire property near existing and emerging transit corridors. With future federal support for fair housing in doubt and Seattle housing costs skyrocketing, this rotating-loan fund will enable inclusive-housing developments throughout the Puget Sound region.
Spearheaded by Enterprise Community Partners, the REDI Fund also lands just after voters in King, Pierce, and Snohomish Counties approved a $54 billion transportation package to create 10 Sound Transit rail extensions and three bus rapid transit (BRT) corridors. This fund will piggyback on voters’ desires to create a more accessible Seattle region. “There’s a tremendous amount of opportunity now,” says Devin Culbertson, senior program director for Enterprise. “The revolving-loan fund is definitely a fit for the transit buildout that the region anticipates.”
The loan fund will provide capital to developers who make a commitment to create affordable housing. It works at two tiers: For every single housing development, the REDI Fund will require that 10 percent of the housing units be preserved for households earning below 80 percent of Area Median Income, or that the units be 20 percent below market rate—the lower of the two.
The REDI Fund also sets targets for deeper-affordability commitments. Some developers will be held to more stringent requirements in order to ensure that 25 percent of total units built be preserved for households earning under 50 percent AMI, and that 15 total units be built over the course of the funding round for households earning 30 percent AMI.
Further—since the whole goal of the REDI Fund is to build equitable transit-oriented development—developers will have to use the loans to acquire sites within either one-half mile of a rail station or one-quarter mile of a frequent-service bus stop.
King, Pierce, and Snohomish Counties encompass a wide range of housing markets and priorities. As a regional concern, the REDI Fund anticipates a variety of funding opportunities. The deeper-affordability goals, for example, will complement the needs of nonprofit-housing developers working under specific very-low income requirements, says Cheryl Markham, strategic policy advisor for the King County Department of Community and Human Services. “The point of the fund being flexible is that it can be used both for those nonprofit very-affordable projects and also for-profit developers making market-rate units in the building as well as some minimum percentage of affordable units.”
All told, the regional investors expect to build 500 to 700 affordable units with the first tranche of REDI Fund financing. As those loans are repaid, the funds will be cycled back into the REDI Fund for future equitable transit-oriented development opportunities.
The plan builds on prior efforts by Enterprise in the Denver and Bay Area regions. The REDI Fund combines resources from Enterprise Community Loan Fund and seven municipal, nonprofit, and private sources, including the State of Washington, the City of Seattle, King County, and A Regional Coalition for Housing. The regional conversation began with an initiative by the Pugent Sound Regional Council, which received a grant from the U.S. Department of Housing and Urban Development to investigate broad-scale equitable planning.
In one sense, the equitable transit-oriented development initiative has already transformed the Seattle region. Figuring out how the REDI Fund will work for everyone has put nonprofit and private funders in conversation with state, county, and local housing authorities. Housing affordability is a regional crisis—one that may not receive much help from the next administration—and now Puget Sound regional authorities are working in concert to address it.
“Many years ago, projects would be applying independently to three or four different governmental agencies who absolutely weren’t coordinating at the time,” Markham says. “It could take 6 years to get a project funded. So we’ve been on a slow course toward better coordination. This just takes that idea of coordination to a very different level. We’re looking not just at this year, but at our future.”
This story has been updated.