Council examines affordable housing trust fund

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With the need for affordable housing increasing while federal funding source are decreasing, the city made a one-time allocation of $1.2 million from the General Fund to seed an affordable housing trust fund. This is meant to be a source of funds that non-profit organization could use in conjunction with matching funds. Tacoma City Council delved into the topic during the Aug. 27 Committee of the Whole meeting.

Jacques Colon, the city’s 2025 strategic manager, told the council that Tacoma needs an additional 3,000 units of low-income housing. “We know this situation will only get worse,” he observed. Colon said the seed money is a step in the right direction. “You should be commended for that.”

Housing Division Manager Daniel Murillo told the council that funds raised could go directly to housing, or also to related costs. He said a big factor in the cost of construction for developers is off-site improvements, such as sidewalks and utility improvements.

The city could put a sales tax measure before voters that could raise up to $5 million a year for affordable housing. This could be used to construct affordable housing, or mental health or behavioral health facilities. It could also go toward operations and maintenance costs of new units and facilities where services are provided. This would be aimed at those earning 60 percent or less of the average median income.

Councilmember Anders Ibsen, noting that some programs are aimed at those earning up to 80 percent of the average median income, said he supports lowering the ceiling for this source of funding to those at 60 percent.

Councilmember Chris Beale said the need is greatest for those with income ranging from zero to 30 percent of AMI.

Another source of funding for such efforts is the real estate excise tax, which currently generates $1 million a year for affordable housing. Budget Officer Katie Johnston said this tax is a volatile source of revenue, as it can go up and down based on real estate market trends.

Councilmember Ryan Mello suggested assembling a task force of stakeholders to offer feedback to the council. He would be interested in seeing how much support there is for a tax increase before deciding to place it on the ballot.

Councilmember Catherine Uskha and Mayor Woodards both expressed reservations on increasing taxes on small businesses.

Within the next three months, staff will evaluate results of community input and present them to the council.

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