Ellensburg council revises housing revenue allocation to allow up to 30% for housing-related services

The Ellensburg City Council on Jan. 6 adopted an amended revenue allocation framework recommended by the Affordable Housing Commission to guide use of the city’s housing and related services restricted fund.

Housing and Grants Administrator Lily Fry told the council the framework governs two revenue sources: a 0.1% local sales-and-use tax approved by voters in 2017 and a 0.014% state sales-tax rebate enacted by ordinance in 2019. Together those sources generate roughly $800,000 annually, Fry said, with about 90% coming from the local 0.1% tax and 10% from the state rebate. State law requires that affordable-housing sales-tax funds serve households at or below 60% of area median income (AMI); Fry noted that is about $47,500 for a two-person household and roughly $59,400 for a four-person household under the most recent AMI figures cited in the staff report.

The Affordable Housing Commission recommended the framework be revised to allocate at least 60% for the construction and/or acquisition of new affordable housing units and operations/maintenance of new units, allow up to 30% for housing-related services, and retain 5% for reserves and administration. Fry said the change would allow the commission to consider applications for housing services programs — for example, match funding for permanent supportive housing and support for rapid re-housing programs — while keeping capital production the primary focus.

Council members asked whether the proposed framework aligns with a countywide five-year homeless plan then under development; Fry said community outreach and data analysis for that county plan are ongoing and that the city has state Department of Commerce funding to coordinate housing chapter updates and data across jurisdictions. Council members also asked for examples of what “operations and maintenance” might include; Fry said the state language is broad and Commerce has not provided detailed guidance, but that the category could include support needed to keep affordable units in service once built (for example, certain operating subsidies or maintenance-related costs tied to new units), and that specific project costs would come to council for review if recommended by the commission.

After discussion, council voted to adopt the amended revenue allocation framework as recommended by the Affordable Housing Commission. The AHC will accept applications under the new framework and continue to forward recommended capital projects and service programs to council for contract authorization.