Chapter 2.27
HOUSING BANK
Sections:
2.27.010 Establishment of San Juan County affordable housing trust fund and housing bank.
2.27.020 Purpose.
2.27.030 Definitions.
2.27.040 Housing bank commission – Composition.
2.27.050 Housing bank commission – Powers and duties.
2.27.060 Housing bank commission – Organization.
2.27.070 Housing bank commission – Staff.
2.27.080 San Juan County affordable housing trust fund.
2.27.090 Budget and affordable housing plan.
2.27.100 Housing bank commission operations report.
2.27.110 Application and submittal standards.
2.27.120 County council authority.
2.27.130 Criteria for proposal selection.
2.27.140 Reserve fund.
2.27.150 Homeless housing task force.
2.27.160 Conflict of interest, appearance of fairness.
2.27.010 Establishment of San Juan County affordable housing trust fund and housing bank.
There is hereby established the San Juan County affordable housing trust fund. There is also established the San Juan County housing bank and housing bank commission that shall administer the affordable housing accounts including the affordable housing trust fund in accordance with this chapter. If the excise tax authorized by RCW 82.46.075 is approved by the voters, a new County department shall be created called the housing bank that will administer the programs set out in this chapter. If the housing tax is not authorized, the housing bank shall perform the duties set out in this chapter under the auspices of the department of health and community services. (Ord. 3-2006 § 1; Ord. 20-2002 § 1)
2.27.020 Purpose.
A. The purpose of the San Juan County housing bank is to provide leadership, support and funding for the development of quality affordable housing for San Juan County residents with very low, low, moderate and middle incomes through the disbursement of funds collected pursuant to RCW 36.22.178, 36.22.179, Chapter 43.185A RCW, RCW 82.46.075 and other funds and grants collected for the purpose of the development of affordable housing and aid for the homeless. All funds disbursed by the housing bank shall be distributed in a manner that is consistent with state and federal laws which may limit the use of specific funds to particular income levels and special needs.
B. Income thresholds used to develop eligibility standards for the housing programs run by the housing bank are as follows:
1. Very low income: zero to 50 percent of median income in San Juan County.
2. Low income: greater than 50 percent and up to 80 percent of median income in San Juan County.
3. Moderate income: greater than 80 percent and up to 95 percent of median income in San Juan County.
4. Middle income: greater than 95 percent and up to 120 percent of median income in San Juan County.
5. Upper income: more than 120 percent of median income in San Juan County.
C. In developing programs and supporting affordable housing projects, the County shall place a high priority on programs and projects that benefit residents of the County; that provide housing for employees to diversify the County’s economic base and provide a more balanced, year-round economy.
D. To achieve the County’s objectives, the County shall solicit the cooperation of state and federal agencies, other local governments, for-profit builders and developers, nonprofit organizations, nonprofit organizations providing affordable housing or housing-related services in the County, and similar agencies and organizations.
E. The housing bank commission shall seek to balance the affordable housing units developed through affordable housing trust fund programs among the various islands based on their population and needs.
F. The housing bank commission shall seek to provide a wide variety of housing types and tenancy options in order to meet the wide variety of housing needs in the County. In supporting affordable housing, the housing bank commission may consider proposals for ownership, cooperative, leasehold, rental and other forms of home tenancy. The commission may consider proposals for apartments, condominiums, duplexes, modular and manufactured housing, mobile homes, congregate care housing, conventional single-family detached housing, and other types of housing suitable to meet local needs.
G. To maximize the effectiveness of affordable housing programs and minimize cost in the long term, the housing bank commission may place a priority on projects and programs that provide perpetually affordable housing.
H. In order to sustain the local San Juan County economy and promote the development of a continuing local capability to construct affordable housing, the housing bank commission shall encourage local developers, local builders, local subcontractors, local suppliers and local workers to participate in competitive projects.
I. In accordance with the County’s Comprehensive Plan, the County, through the housing bank, will not directly develop, own or operate affordable housing units. (Ord. 3-2006 § 2; Ord. 20-2002 § 2)
2.27.030 Definitions.
These words when used in this chapter shall have the following meanings:
“Affordable housing” means that occupants are spending no more than 30 percent of their gross household income on housing costs. Housing costs for renters are considered to include rent and utilities, or, for owners, to include the principal and interest on the mortgage plus property taxes and insurance (PITI). Utility costs include water, sewage disposal, electricity and/or gas for lighting, heating and cooking.
“Affordable housing excise tax” means that tax authorized by the voters of the County, pursuant to the enablement and requirements of Chapter 82.46 RCW, and San Juan County Ordinance 2-2006* as now enacted or subsequently amended.
“Director” means the professional person selected to direct and supervise the affordable housing program established by this chapter and provide professional and technical support services to the housing bank commission.
“Perpetual affordability” means housing that through legal restriction is pledged to remain affordable for each purchaser for a minimum of 198 years for households earning an annual income equal to or less than 120 percent of the San Juan County median income. Legal restrictions to enforce perpetual affordability include:
1. Continuous ownership of the land and structure by a public agency or nonprofit housing provider;
2. Continuous ownership of land by a public agency or nonprofit housing provider with a renewable land lease allowing ownership of the structure by an eligible household;
3. A deed restriction, restrictive covenant, resale or rental restriction or other contractual agreement that assures affordability as defined above. (Ord. 3-2006 § 3; Ord. 20-2002 § 3)
* Code reviser’s note: Ordinance 2-2006 did not become effective.
2.27.040 Housing bank commission – Composition.
There shall be established a housing bank commission, a citizen board appointed by the County council. The housing bank commission shall be composed of seven members, one who resides on each of the three largest islands – San Juan, Orcas and Lopez, plus one who resides in Friday Harbor, and three appointed at large by the County council.
A. Initial appointment shall be as follows: three members appointed for four-year terms, two members appointed to three-year terms, and two members appointed for two-year terms.
B. Upon the expiration of initial appointments, successive appointments shall be for a period of four years. Housing bank commission members may be reappointed on a majority vote of the County council.
C. The County council shall strive to achieve a diversified and objective membership.
D. In the event a housing bank commission member is absent from three consecutive meetings without prior approval from the housing bank commission chair, the County council may remove such member and appoint a replacement to fulfill that member’s unexpired term. (Ord. 3-2006 § 4; Ord. 20-2002 § 4)
2.27.050 Housing bank commission – Powers and duties.
The housing bank commission shall have the following powers and duties:
A. To develop and regularly update a housing plan that sets out gaols, measurable strategies and methods for evaluating program effectiveness.
B. To assess the need for housing and the demand for certain types of housing by geographic areas in the County, utilizing both secondary source materials, such as the U.S. Census and demographic data, and primary source materials, such as surveys and interviews.
C. To set clear performance standards for loan and grant applications to be considered for funding, and provide guidance and counsel to applicants that will help them achieve those standards.
D. Assist the County council to create stable, permanent funding sources to meet the County’s affordable housing needs.
E. To establish procedures for soliciting and evaluating applications for competitive grants and loans funded through excise tax funds generated by Chapter 82.46 RCW. This shall include the development of requests for proposals for competitive grants and loans that are specifically tailored to the affordable housing needs of the County as set out in the housing plan.
F. To develop criteria for evaluating the proposals for the competitive grants and loans that ensure that the disbursement money is spent for affordable housing that is durable, modest, cost-effective and perpetually affordable.
G. To review grant and loan applications and make recommendations to the County council for the award of grants and loans. Such review shall include background checks on applicants for loans or grants.
H. Provide assistance as needed to the local homeless housing task force.
I. Prepare and recommend to the County council an annual budget for the affordable housing trust fund and other affordable housing accounts, if any.
J. Prepare annual reports detailing housing bank activity.
K. Set policies and procedures for the administrative duties of the director including but not limited to:
1. Pursuing the collection of unpaid loans.
2. Monitoring compliance with conditions contained in grant or loan approvals including administrative review to ensure that funds are being spent in accordance with loan and grant approvals.
3. Handling requests for loan modifications.
4. Preparing applications to state and federal agencies for pass through grants.
5. Monitoring all pass through grants and loans to ensure compliance with the terms of federal and state grants or loans.
6. Managing the affordable housing revolving loan fund including approving applications for loans and monitoring compliance with terms of loans and enforcement actions against loan recipients who are out of compliance with terms of loans. (Ord. 3-2006 § 5; Ord. 20-2002 § 5)
2.27.060 Housing bank commission – Organization.
The housing bank commission shall elect a chair and vice-chair for a one-year term. The chair and vice-chair may be reelected on expiration of their one-year term. Within 90 days of their first meeting, the housing bank commission shall adopt such rules and procedures as they deem necessary to accomplish their function. (Ord. 3-2006 § 6; Ord. 20-2002 § 6)
2.27.070 Housing bank commission – Staff.
The housing bank commission shall recommend candidates for the position of director. The director shall have the background skills and experience appropriate to the evaluation and negotiation of complex financing, real estate transactions and public-private partnerships. The director shall serve as the primary staff of the commission and have the functions and duties described in this chapter.
Revenues required to support the direct and indirect expenses of the director and additional staff as may be deemed necessary shall be derived solely from the affordable housing trust fund. Annual administration costs of the fund shall be held to the minimum required to efficiently and properly administer the housing trust fund, but shall not exceed 10 percent of revenues received in any year; provided, that no more than six percent of recording fees collected pursuant to RCW 36.22.179 may be used for administrative costs for the homeless housing program. Nothing in this section would preclude the County from contracting with an individual, organization, or commercial bank to provide any or all of the administrative functions of the housing bank commission. If the affordable housing excise tax is not approved by the voters and there are insufficient funds in the affordable housing trust fund to hire a director, nothing shall prevent the director of health and community services from performing the duties of housing bank director. (Ord. 3-2006 § 7; Ord. 20-2002 § 7)
2.27.080 San Juan County affordable housing trust fund.
A. There shall be established in the County treasury a proprietary fund titled “San Juan County affordable housing trust fund.” Deposited into this fund shall be all revenues, except revenues from the federal government and from private donors, that the housing bank is authorized to receive. Funds from private and federal sources shall be held in special accounts separate from County or state funds. The housing trust fund shall include revenues received from the following sources:
1. Real estate excise taxes generated under RCW 82.46.075 if approved by the voters of San Juan County. Such funds must be expended in conformance with San Juan County Ordinance 2‑2006*, RCW 82.46.075 and state and federal laws.
2. Recording fees collected pursuant to RCW 36.22.178. Such funds must be expended in conformance with RCW 36.22.178 and state and federal laws.
3. Recording fees collected pursuant to RCW 36.22.179. Such funds must be expended to accomplish the purposes of Chapter 43.185C RCW and in accordance with RCW 36.22.179 and state and federal laws.
4. Grant and loan funds received from the Department of Community, Trade and Economic Development pursuant to Chapter 43.185A RCW. Such funds must be spent in accordance with the requirements set by the state of Washington.
5. Interest earned from investments of the fund.
6. Other funding sources as they become available and acceptance of such funds is recommended by the housing bank commission and approved by the County council. Any funds expended from additional sources must be spent in conformance with state and federal laws, this chapter and the contractual requirements attached to the receipt of the funds.
B. Expenditures from the affordable housing trust fund shall be tied to a particular revenue source and spent in accordance with the applicable requirements as set out in subsection (A) of this section. All expenditures shall be made in accordance with the legally adopted County budget. Excise tax funds shall be spent in accordance with expenditure plan set out in San Juan County Ordinance 2-2006.* The annual budget, submitted for public hearing, shall be based upon recommendations of the housing bank commission and adopted by the County council. (Ord. 3-2006 § 8; Ord. 20-2002 § 8)
* Code reviser’s note: Ordinance 2-2006 did not become effective.
2.27.090 Budget and affordable housing plan.
A. Based on the goals and objectives of the County’s housing element and the County’s most recent housing plan, the housing bank commission will prepare an annual budget and affordable housing plan for the coming budget year. The budget and affordable housing plan will include an estimate of the number of affordable housing units needed for each of the principal islands of the County.
B. The annual budget and housing plan shall be adopted by the housing bank commission and shall be subject to approval by the County council during the adoption of the annual budget for the County. The plan may provide for contingencies and may be amended following a public hearing by the housing bank commission and approval by the County council.
C. Prior to any action by the housing bank commission to adopt an annual budget, the housing bank commission shall hold at least one public hearing. A draft plan shall be available for public review 10 days prior to the date of any housing bank commission public hearing.
D. The housing bank commission may adopt its recommended budget by a majority vote at its next regular housing bank commission meeting following the public hearing.
E. Notices of housing bank commission meetings or hearings on the annual draft or final budget shall be published in the legal newspaper of the County at least 10 days prior to the meeting or hearing. (Ord. 3-2006 § 9; Ord. 20-2002 § 9)
2.27.100 Housing bank commission operations report.
As part of the housing bank commission’s preparation of its annual budget, the housing bank commission shall prepare and submit to the County council by January 31st of each year an annual operations report summarizing the previous year’s activities, including at a minimum:
A. Inventory of the status of the particular projects approved for funding in the prior year’s annual budget. Each project shall be linked in the report to its funding source;
B. Housing bank commission recommendations regarding changes in the affordable housing development objectives contained in the prior year’s annual expenditure plan; and
C. Any recommendations by the housing bank commission for amendments to the County’s Housing Element, Unified Development Code or other County regulations related to affordable housing. The housing bank commission shall also forward such recommendations to the planning department for inclusion in the regular review and update of these plans and regulations. (Ord. 3-2006 § 10; Ord. 20-2002 § 10)
2.27.110 Application and submittal standards.
A. One or more application deadlines for competitive grants and loans shall be established by January 30th of each calendar year.
B. Recommended awards shall be announced not later than eight weeks after the application deadline.
C. Each request for applications shall include a criteria-based weighting system that is consistent with the housing bank’s current housing plan.
D. Applications shall include at a minimum:
1. A profile of the organization applying, including history, experience, financial statements and capacity of staff and board;
2. A detailed description of the proposed project, including beneficiaries, site description and demonstrated consistency with current County plans and codes;
3. A detailed description of project financing including development budget, operating budget and permanent and interim financing. (Ord. 3-2006 § 11)
2.27.120 County council authority.
A. The following actions of the housing bank commission shall require approval by the County council:
1. The annual budget;
2. The affordable housing plan;
3. The 10-year homeless housing plan recommended by the local homeless task force;
4. The award of competitive grants and loans.
B. If the County council elects not to approve the annual budget, the affordable housing plan, the 10-year homeless housing plan or the awarding of grants and loans, it must reject the item in its entirety and remand it back to the housing bank commission with specific recommendations for reconsideration. The County council shall have no authority to amend the budget, plans, or awards.
C. The housing bank commission shall make a recommendation for a housing bank director. The final selection of a director shall be made by the County administrator and confirmed by the County council. (Ord. 3-2006 § 17; Ord. 20-2002 § 12)
2.27.130 Criteria for proposal selection.
The housing bank shall give priority to applicant projects that:
A. Meet the standards and goals identified in the request for applications;
B. Provide durable housing that is cost effective and financially viable;
C. Are sponsored by a nonprofit organization(s) that have the demonstrated ability, stability and resources to implement the project;
D. Provide perpetual affordability;
E. Leverage support from other sources, including private donations, private investments and other grants and loans. (Ord. 3-2006 § 12)
2.27.140 Reserve fund.
A. A reserve fund shall be established to provide for the monitoring and compliance of grant and loan terms. It is the objective of this reserve fund that the interest earned from it will fund monitoring and compliance activities after tax revenues in support of the housing bank expire.
B. The fund shall be capitalized by a percentage of the grant or loan award deemed by the housing bank commission to be sufficient to carry out the perpetual responsibilities of monitoring compliance with grant and loan terms. (Ord. 3-2006 § 13)
2.27.150 Homeless housing task force.
The County council shall appoint a local homeless housing task force to perform the duties set out in Chapter 43.185C RCW. The task force shall include at least three members of the housing bank commission, as well as at least one homeless or formerly homeless person and a representative of a private nonprofit organization with experience in low-income housing. The local homeless housing task force shall prepare and recommend to the County council a 10-year homeless housing plan for San Juan County. The local plan developed by the task force shall be consistent with the guidelines set out in Chapter 43.185C RCW. (Ord. 3-2006 § 16)
2.27.160 Conflict of interest, appearance of fairness.
A. “Conflict of interest” is defined as the possibility or appearance of the possibility (not just the actuality) of a private benefit, direct or indirect, or the creation of a material or personal gain or advantage to the member, family, friends or associates who hold some share of a member’s loyalty.
B. Any member who believes that he or she has a conflict of interest on any matter before the housing bank commission must, as soon as the chair introduces the matter, announce that he or she has a conflict and promptly leave the room. The particulars of the conflict must not be discussed.
C. A member who believes he or she may have the appearance of a conflict but who does not believe that an actual conflict exists, nor that his or her ability to reach an unbiased conclusion is in any way compromised, should at the opening of the discussion disclose the apparent conflict and declare that he or she does not believe himself or herself biased in any way, and ask if anyone present would object to his or her participation in the matter. If there is an objection and the housing bank commission will have a quorum without the member, the member should step down and leave the room. If there is no objection, the member may remain and participate in the matter.
D. If a member has not disclosed any appearance of a problem but is challenged from the floor and the challenge has no basis in fact, the member should so state and may decline to step down. A member is not obligated to accede to groundless challenges. However, if there may be an appearance of conflict, the member should respond in accordance with the instructions given above.
E. A member who has questions about participation in any matter before the housing bank should direct those questions to the chair who may, if necessary, call upon the director for a decision. The director, in turn, may call upon the prosecuting attorney for advice. The member, however, should begin the inquiry with the chair.
F. A member’s absence due to possible or actual conflict of interest or an appearance of fairness problem may not submit written comments to the chair on the topic which is the subject of the conflict or appearance problem. If such comments are submitted, the chair shall refuse them.
G. Housing bank members are encouraged to participate in local discussions on legislative matters affecting housing and to obtain as broad an understanding as possible of the general public’s views. However, housing bank members are cautioned not to offer opinions outside of housing bank meetings on any quasi-judicial housing matter before the County. (Ord. 3-2006 §§ 18, 19; Ord. 5-1994 Att. A(5). Formerly 2.26.060.)