King County lends Housing Authority its AAA credit rating to boost affordable housing
SEATTLE — King County is lending its stellar credit rating so people can afford to live here.
The county said Thursday it will use its AAA credit rating to help the King County Housing Authority buy apartments such as the 95-unit Corinthian Apartments near the Tukwila Light Rail Station.
On the other side of the rail station, the Authority is purchasing a 190-unit property, the “Village at South Station.”
The rules have changed for organizations offering subsidized housing around the nation, since President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010. Right now those rules prevent banks from lending to the housing authority.
The housing authority is looking to add 2,200 affordable units over six years, near transportation hubs in Tukwila, Northgate and in the Bel-Red corridor.
“So we need to partner with them, essentially yes, to guarantee, or co-sign, the loan in order that they might be able to push that housing out there,” said King County Executive Dow Constantine.
Under the executive’s proposal, the King County Housing Authority would have access to King County’s AAA credit rating, to obtain low-cost loans to develop or preserve up to 2,200 units of affordable housing over the next six years. It hopes to make offers on properties in strategic locations, such as near mass transit or high-performing schools.
“It will also provide us with the flexibility to pull money down quickly, to compete with a very competitive market to acquire additional properties,” said Stephen Norman, executive director of the King County Housing Authority.
Constantine and Norman have directed their staffs to negotiate the details of this agreement. It needs to provide flexibility for the Housing Authority to act quickly while ensuring the protection of the county’s bond rating. A detailed proposal is expected sometime this summer.
The move to extend credit to the housing authority is the latest in a series of actions the county has taken to increase the inventory of affordable housing that’s connected to high-capacity transit.
Constantine is also sending to the King County Metropolitan Council his plan to invest $48 million in transit-oriented development with mixed-income housing connected to shopping, schools and job centers.
Using legislation passed by lawmakers in Olympia, King County will borrow against future revenue generated from lodging taxes to pay for the investments.
In February, the county announced the creation of a $7 million fund for capital projects will create an additional 237 units of affordable housing, including units reserved for military veterans and the homeless.
King County has set aside an additional $10 million for services that help families and individuals remain in housing through case management, help finding employment and other services.