Plans for a new permanent supportive housing project for low-income residents took another step last week after Thurston County pledged $3.5 million for the project.
The project is expected to provide about 70 units of permanent supportive housing on property along Franz Anderson Road by 2026, said Tom Webster, manager of the Thurston County Office of Housing and Homeless Prevention.
The completion of the project would mark a major milestone in the county’s efforts to build more affordable housing for vulnerable residents. Many of the expected occupants are already waiting for the project at a nearby and recently established tiny home village.
On Tuesday, the Board of County Commissioners unanimously approved an interlocal agreement with the cities of Lacey, Olympia and Tumwater to collectively fund the permanent project.
The agreement indicates the county will provide $3.5 million in American Rescue Plan Act (ARPA) funding. Meanwhile, the City of Lacey has pledged $3 million and the City of Tumwater has offered $275,000 from their respective general funds.
These contributions will be managed by the City of Olympia, which already spent $825,547 in ARPA funds on the acquisition of the property in 2022. Thurston County paid the same amount when it partnered with the city on that acquisition.
The City of Olympia has contracted with the Seattle-based Low-Income Housing Institute to develop the property earlier this year. Webster said construction is expected to start in fall 2024 and should be completed by early 2026.
Webster estimated construction may cost about $25 million while briefing the board on the matter last Monday. He said LIHI plans to leverage local money to apply for funding from competitive sources to make up the difference.
“The local leverage really makes this a highly competitive project because the Washington State Housing Finance Commission and Department of Commerce do look for local commitment,” Webster said.
LIHI is expected to cover operating costs with the income generated by the units, meaning additional local funding should not be necessary, Webster said.
The City of Olympia plans to disburse the funds from the local jurisdictions to LIHI on a cost reimbursement basis, according to the agreement. If LIHI cannot find the funding to complete the project, the agreement says the parties can withdraw and the funds will not be spent.
“Nothing happens until they actually secure those additional funds,” Webster said.
During the Tuesday meeting, Commissioner Tye Menser asked Webster why LIHI, which is already involved in similar projects, was chosen for this project.
“We would like it to be more competitive,” Webster said. “For this specific opportunity, LIHI was the only developer that applied.”
The Franz Anderson Tiny Home Village, which is next to the permanent project site, opened in September. It was originally intended to house people relocated from an RV encampment on Ensign Road, but it now houses people who were living along Interstate 5.
That change in direction resulted from the village being integrated into Gov. Jay Inslee’s Rights of Way Initiative last summer. That initiative was designed to clear homeless encampments along I-5.
Keylee Marineau, the county’s Homeless Response Program Manager, told the board on Tuesday that five encampments along I-5 have been cleared and “hardened” with boulders as part of the initiative. The five sites include ones by Lilly Road, Pacific Avenue, Sleater Kinney Road, Wheeler Avenue and the City Center exit.
Marineau said the state is still working to clear another encampment near Wheeler Avenue by the end of November. The residents at that encampment are expected to go to Franz Anderson Tiny Home Village and the New Hope Village at First Christian Church in downtown Olympia.
Those who live at the Franz Anderson Tiny Home Village will eventually move into the permanent supportive housing project once its complete, Webster said. The village will later be converted into more permanent housing, he added.
Amanda Smith is a dedicated U.S. correspondent with a passion for uncovering the stories that shape the nation. With a background in political science, she provides in-depth analysis and insightful commentary on domestic affairs, ensuring readers are well-informed about the latest developments across the United States.
