King County Department of Community and Human Services officials briefed the Health, Housing and Human Services Committee on Sept. 11 about a five‑year outlook for housing capital funding, warning that previously large funding streams are nearly exhausted and capital resources could decline steeply beginning in 2027.

Deputy Director Kelly Reiter, Division Director Sunari Marshall and Chief of Capital Programs Kristin Pula said the county has used multiple funding sources — most notably transit‑oriented development (TOD) bonding and short‑term lodging tax bonds — to support affordable housing production. Over roughly the past decade the county invested about $288 million in TOD funds and used those and other sources to produce more than 5,000 affordable homes. In the past five years the department averaged about $45 million per year for affordable housing through several sources, including one‑time and ongoing funds.

Staff told the committee that most TOD and short‑term lodging bond capacity is committed or awarded: roughly 93% of TOD and 72% of short‑term lodging bond funds are spoken for. The current short‑term lodging bond round (about $25 million) and the remainder of TOD bonding are expected to be awarded by 2026. In addition, capital dollars from the Veterans, Seniors and Human Services Levy (VSHSL) have declined between levies; the current levy includes about $5.8 million for capital compared with about $28 million in the prior levy. As a result, staff projected a drop to under $6 million per year in available capital for housing beginning in 2027, unless new revenue sources or bonding capacity are identified.

Staff also flagged that development and construction costs have increased substantially in recent years — from approximately $235,000 per unit five years ago to about $475,000 per unit today in average estimates — and that projects frequently require gap funding after award but before construction starts because of rising bids and additional financing needs. The department said it has increasingly used available funds for post‑award gap financing to preserve projects already awarded, reducing funds available for new awards.

Committee members asked about coordination with cities and state partners, the role of operating subsidies to make projects viable, and the need for predictable multi‑year capital sources. Staff said the county will monitor revenue forecasts and work with partners but emphasized that the outlook requires planning for alternative resources, legislative engagement and prioritization of gap funding for awarded projects to keep them moving to construction.

What’s next: Staff will continue to coordinate with executive and budget offices on the county’s capital plan and to brief council on options; members signaled interest in exploring state partnerships and other approaches to sustain production and preservation of affordable housing.