Meets with local housing organizations
Representatives from local housing organizations — including the Methow Housing Trust (MHT) — took advantage of a visit to the valley by Washington State Department of Commerce Director Mike Fong to describe the special needs and pressures associated with providing affordable housing here.
Fong met with MHT Executive Director Danica Ready, Housing Authority of Okanogan County (HAOC) Executive Director Nancy Nash-Mendez, Economic Alliance Executive Director Roni Holder-Diefenbach, and Commerce Community Engagement Specialist Soo Ing-Moody last week. He toured MHT’s projects in Winthrop, seeing the 16 one- to four-bedroom homes already completed at Cascade Meadows South, and the site where the trust will be building 24 more houses at Cascade Meadows North starting this summer.
That land is also the future site of HAOC’s Wildrose Apartments, which will provide 22 rental units. The apartments grew out of a partnership between HAOC and MHT to develop a mixed-income community and provide work force housing for people earning a lower proportion of the area median income (AMI). AMI is set by the federal government. In March, AMI for a two-person household was $66,000 per year.
Fong, who was appointed to the post by Gov. Jay Inslee in April 2023 and started last May, is visiting counties across the state to learn about housing and other needs.
The Department of Commerce has clearly been listening to rural communities to understand their needs and economies, and has already adjusted some programs, Ready told the Methow Valley News. The recent CHIP grant (Connecting Housing to Infrastructure Program), which helps pay infrastructure costs and connection fees for affordable housing developments, allowed MHT to waive connection fees to town sewer and water at Cascade Meadows North.
Openness to change
Ready said she was impressed by how well-informed Fong was, and by his openness to innovative ideas that could support the creation of additional affordable housing in rural areas.
Existing requirements of Commerce grants often pose barriers, particularly in rural areas. A small organization like MHT would have to hire someone for grant administration and reporting, Ready said. Requiring bids from contractors for excavation and construction also presents a hurdle, since the bid process is time-consuming and could mean working with firms from outside this area, which would be less cost-effective in the long run.
By working with local contractors who are familiar with soil and other construction conditions in the valley, MHT has developed a process that allows its homes to be built very efficiently, Ready said. Because MHT homes follow standard plans, builders and electricians can work quickly, she said.
Another Commerce requirement to pay prevailing wages — which the state sets for an entire county — can make it difficult to pay wages that match the local economy, Ready said.
But in the Methow Valley, people in the “missing middle,” such as teachers and other professionals, struggle to afford housing. Even at 200% of AMI, it’s hard to compete, given the high prices and extremely limited inventory in the Methow, Ready said. The median price for a house in 2023 was $663,000, she said.
Although the majority of the housing trust’s buyers earn less than 100% of AMI, MHT is trying to serve the needs of the valley by going up to 150%. The state sets the limit at 100% for eligibility for its funding programs, Ready said.
“Fong really gets that — he has seen other communities with the same problem,” Ready said.
Commerce is seeking feedback to understand the needs of rural affordable housing providers, particularly in areas like the Methow, where the housing market and economy are influenced by urban buyers who earn higher wages or are looking for second homes, Ready said. But policy and statutory changes at the state level can take a long time, so these conversations are part of the long game, she said.
The $8.5-million grant HAOC recently received for the Wildrose Apartments is another example of how Commerce has worked to meet the needs of rural areas, Nash-Mendez said. The project will have units for people earning a higher percentage of AMI than Commerce typically funds.
When HAOC asked Commerce to waive the standard $5-million cap for grants, the authority “boldly decided to show the actual need of the community,” where housing costs are so much higher, Nash-Mendez said.
Expanding funding sources
MHT has relied on a core set of private donors to fund its homes — which has allowed the trust to be more efficient and build more quickly — but MHT is seeking more flexibility for state funding to supplement those donations, Ready said. MHT is building about 10 houses a year to keep up with demand.
MHT follows a community land-trust model, where the trust owns the land and sells houses, leasing the land the house is on to the homeowner. Homeowners agree to sell their homes at a restricted price to keep them affordable in perpetuity.
Federal grant requirements are typically not appropriate for rural areas because they require a much higher density, Nash-Mendez said.
The partnership between MHT and HAOC grew out of a discussion several years ago about ways to create a mixed-income neighborhood. The agreement allows each organization to draw on its strengths — MHT’s efficiencies in preparing infrastructure so that the land would be shovel-ready when it was transferred to the housing authority, and HAOC’s staff and experience managing rentals.
The unique partnership between the housing trust and housing authority to create a mixed community has attracted interest from other communities in Washington and beyond, Nash-Mendez said.
The sale of the land for the Wildrose Apartments from MHT to the housing authority was executed at the end of March. HAOC anticipates securing the final funding and starting construction on the Wildrose Apartments in spring 2025.
