San Juan islanders look to REET funds as affordable housing savior

Before Bridget Nyberg moved to a San Juan Community Home Trust neighborhood, the single mother of two teenagers worried her island rental may one day be out of reach.

“There was always the possibility that either the owners would want to occupy the house themselves or that it might sell,” she said. “Affordable rentals are rarely available here.”

Now, Nyberg has found stability in homeownership, made possible through the nonprofit, but her struggle to finance local housing is common.

In 2017, a county report found that almost half the resident cannot afford to buy nearly 80 percent of the houses in the county. There is also a lack of rentals, states the report; only 16 percent of the county consists of renter-occupied homes, compared to 34 percent of the state.

In 2018, the groundwork for a solution was laid when voters approved a tax to fund affordable housing projects. Local nonprofits, which already help to solve the housing crisis, are considering requesting funds to provide more reasonably-priced residences in the county.

The Real Estate Excise Tax, which passed in November, is applied to the sale of houses. The tax is expected to generate roughly $1.2 million in 2019 to maintain or build local housing for low- or middle-income residents, as well as those with disabilities.

Since late December, island real estate transactions are taxed 0.5 percent, with the buyer paying 99 percent and the seller paying the rest. Applicants can apply for funds this summer, and the recipients will be selected by the winter.

Nancy DeVaux joined the campaign to pass the REET after she retired from the San Juan Community Home Trust after 12 years in 2017. DeVaux’s work as the executive director provided a front-row view of the local issue.

“People are moving away from the island[s] because they can’t find an affordable place to live and employers are having difficulty finding the retaining employees,” she said. “In so many ways, the lack of affordable housing makes it difficult and stressful and hopefully more affordable housing will create a more stable community.”

As local organizations staff start to plan how to apply and potentially use the tax revenue, DeVaux sees the rise of a tangible solution to the local housing crisis.

“…[ REET Funds] can be used for such a broad variety of projects, including rentals and other projects people might come up with,” she said. “I think it’ll be a trigger for innovation in terms of problem-solving with rental housing and homeownership in the community.”

WILL LOCAL ORGANIZATIONS APPLY FOR REET FUNDS?

YES

OPAL Community Land Trust, 360-376-3191, www.opalclt.org, Orcas Island.

OPAL Executive Director Lisa Byers said staff plans to apply for REET funds for its 45-unit rental property on North Beach Road on Orcas Island. The site, called April’s Grove, will consist of studio, one-bedroom, two-bedroom and three-bedroom townhomes. Construction is scheduled to start in 2019.

In 2018, OPAL also began offering bridge loans through local investors for islanders who have good credit but are unable to acquire loans through banks.

OPAL Community Land Trust offers affordable rentals and homeownership on Orcas. OPAL, which stands for Of People And Land, sells and rents structures built on property the organization owns. For homeownership, staff uses grants and donations to fill the gap between the cost of a local home and the amount island homebuyers can pay. When buyers resell their OPAL homes, they use a formula to restrict the price and maintain affordability for the next occupants. Homes are newly constructed or renovated on the island; built and shipped to the island; or purchased and converted to use OPAL’s resell formula. The organization serves 105 ownership and 30 rental Orcas Island households, as well as commercial office spaces and community gardens.

San Juan Community Home Trust, 360-378-5541, www.hometrust.org, San Juan Island.

DeVaux’s successor, David Gow, said staff will apply for REET funds but hasn’t selected which project to support.

In 2018, four new homes were added to the home trust’s Sun Rise II neighborhood, which is its third affordable housing development in town. Unlike other home trust developments, this neighborhood is completely comprised of “recycled” homes that were built in Canada in the first half of the last century then barged to San Juan. Most were to be razed for upzoning, which made them available to the home trust. The organization also owns property on Price Street, which staff is considering turning into a rental development of 10-12 units and would be the organization’s first rental property.

The San Juan Community Home Trust provides affordable housing in Friday Harbor the same way OPAL does. The home trust is also a community land trust, which owns property and sells or rents structures on the land. The home trust also uses a resale formula to keep houses affordable for the next buyers.

MAYBE

Lopez Community Land Trust, 360-468-3723, www.lopezclt.org, Lopez Island.

Sandy Bishop, executive director of the Lopez Community Land Trust, said she will “most likely” apply for REET funds but is waiting to review the application criteria before making a decision.

The organization’s staff and volunteers are nearing completion of three, single-family cottages in Lopez Village. In 2019, it plans to remodel two apartments and begin develop a single-family home, as well as four additional housing units, for rent or to own as a co-op.

When buyers purchase a home through the Lopez Community Land Trust, they are buying a share into a cooperative like a homeowners association. Cooperative dues help to maintain the houses, like fixing a leaky roof.

Similar to the San Juan Community Home Trust and OPAL, the land trust on Lopez provides affordable homeownership by removing the land from the cost of the home. Homeowners and volunteer laborers reduce the cost of the houses by participating in the building, and like other land trusts, the resale prices are based on a formula to keep homes affordable in perpetuity. The organization also owns a 48-acre farm to foster food security.

NO

Homes for Islanders, 360-370-5944, www.homesforislanders.org, San Juan Island and Orcas Island.

Homes for Islanders Executive Director Justin Roche said the organization’s staff will not apply for REET funds. He said the county staff has noted a preference to fund permanently affordable homes with the tax revenue, which the organization does not mandate.

Homes for Islanders reduces the cost of building houses on San Juan Island by having the owners and volunteers complete 65 percent of the work. The organization also saves money by making bulk purchases on supplies and subcontracts. Unlike the community land trusts, purchasers of these homes own the houses and the land, which means they can sell them at market price, whenever they choose. However, four Homes for Islanders neighborhoods have restrictions placed by the county government to sell to buyers of lower incomes, which, in turn, reduces the resale price.

In October, Roche said 11 families moved into newly built Homes for Islanders houses, and in April, another nine did the same. In 2019, staff will focus on its Foxhall neighborhood on San Juan by helping eight families begin building and 10 more qualify for the program. Construction for those 10 houses will begin in May. Those 16 and older can help at the job site, which is typically open from 8 a.m.-5 p.m., Wednesday through Sunday.

SAFE San Juans, 360-378-2345, www.safesj.org, San Juan County.

SAFE San Juans has offices on San Juan, Orcas and Lopez to prevent and eliminate domestic violence. The staff has no plans to apply for REET funds but has previously looked into developing affordable housing in Friday Harbor.

Executive Director Kim Bryan said the nonprofit struggles to find affordable rentals for those leaving domestic violence relationships. The nonprofit has undisclosed safe homes for transitions of up to 48 hours, but few housing options after the initial break.

“In a lot of ways, [the lack of affordable housing is] one of the biggest barriers of domestic violence to help people leave a dangerous situation,” she said, adding that no matter the obstacles, the organization helps those in need.

Bryan said the board is currently focused on finding her replacement, and therefore not researching affordable housing at this time. She is leaving the organization because her husband received a job opportunity off the island.

 

Contributed photo/San Juan Community Home Trust
                                The Nickel Brothers crew and onlookers stand in front of the new home trust houses on San Juan.

Contributed photo/San Juan Community Home Trust The Nickel Brothers crew and onlookers stand in front of the new home trust houses on San Juan.

Contributed photo/OPAL
                                An OPAL house is barged to Orcas Island.

Contributed photo/OPAL An OPAL house is barged to Orcas Island.

Contributed photo/OPAL
                                An OPAL house is barged to Orcas Island.

Contributed photo/OPAL An OPAL house is barged to Orcas Island.

Contributed photo/Sandy Bishop
                                Lopez Community Land Trust volunteers Mary and Clark participate in the 2018 Salish Way project.

Contributed photo/Sandy Bishop Lopez Community Land Trust volunteers Mary and Clark participate in the 2018 Salish Way project.

Contributed photo/Homes For Islanders
                                Volunteers and homeowners celebrate Homes For Islanders most recent built at the end of Malcolm Street on Oct. 7.

Contributed photo/Homes For Islanders Volunteers and homeowners celebrate Homes For Islanders most recent built at the end of Malcolm Street on Oct. 7.

Contributed photo/Sandy Bishop
                                Lopez Community Land Trust volunteers Jim and Tom help with the organization’s 2018 Salish Way project.
                                Contributed photo/San Juan Community Home Trust
                                The final homes are added to the home trust’s Sunrise II neighborhood on San Juan.

Contributed photo/Sandy Bishop Lopez Community Land Trust volunteers Jim and Tom help with the organization’s 2018 Salish Way project. Contributed photo/San Juan Community Home Trust The final homes are added to the home trust’s Sunrise II neighborhood on San Juan.