HOUSE BILL REPORT

HB 2436

BYRepresentatives Nutley, Winsley, Leonard, Wood and May

Altering priorities and criteria for evaluation regarding Washington housing trust fund applicants.

House Committe on Housing

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (8)

      Signed by Representatives Nutley, Chair; Leonard, Vice Chair; Winsley, Ranking Republican Member; Anderson, Ballard, Padden, Rector and Todd.

House Staff:Kenny Pittman (786-7392)

AS REPORTED BY COMMITTEE ON HOUSING JANUARY 26, 1990

BACKGROUND:

In 1986, the Legislature established the Housing Trust Fund. The purpose of the Housing Trust Fund is to provide a source of funds to local governments, nonprofit organizations, and public housing authorities to assist in either the development or preservation of housing for families with special housing needs or with incomes at or below 50 percent of the county median income. Assistance through the Housing Trust Fund can be in the form of either a loan or grant or both.  The Department of Community Development (DCD) is responsible for the administration of the Housing Trust Fund.

Current law requires DCD to give first priority to applicants that request assistance that will use privately owned housing stock, including privately owned housing stock purchased by nonprofit public development authorities.  Second priority for funding is given to applicants who use existing publicly owned housing stock. Applications from public housing authorities are given second priority for funding

In awarding funds through the Housing Trust Fund, all applications are evaluated based on:  (a) the leveraging of other funds; (b)  the applicant's contribution to the project; (c)  the local government contribution to the project; (d)  projects that encourage ownership, management, and other project-related opportunities; (e) the housing will be available to low-income persons for at least 15 years; (f)  the applicant's ability, stability, and resources to implement the project; (g)  projects that serve the greatest need; and (h)  projects that provide housing for persons and families with the lowest incomes.  Requiring all applications to meet the evaluation criteria may place certain activities and projects at a disadvantage for funding.

SUMMARY:

SUBSTITUTE BILL:  Technical corrections are made to the priority and preference criteria of the Housing Trust Fund to allow access to funding for a wider variety of projects.

The Department of Community Development (DCD) can further interpret the federal definition of "rural" that is used to insure that at least 30 percent of the Housing Trust Fund assistance goes to rural areas of the state.

Activities eligible for assistance through the Housing Trust Fund are expanded to include temporary rental and mortgage payment subsidies used to prevent homelessness.

The priority for applications for projects and activities that use privately owned housing stock is expanded to include privately owned hosing stock purchased by a public housing authority.  The definition of privately owned housing stock includes housing acquired by a federal agency through default on a mortgage by the private owner

The Department of Community Development does not have to use all of the evaluation criteria when reviewing projects and activities requesting assistance through the Housing Trust Fund.  Similar activities and projects must be evaluated using the same criteria.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  The substitute bill:  (1) allows the Department of Community Development (DCD) to interpret the definition of "rural" used in awarding Housing Trust Funds; (2) expands the definition of rental subsidies to include temporary rental and mortgage payment subsidies to prevent homelessness; (3) expands the definition of privately owned housing stock to include housing acquired by a federal agency through a default on the mortgage by a private owner; and (4) allows DCD to use some or all of the rating criteria when reviewing projects for assistance.

Reference to the security deposit guarantee and low-income homeowner's stabilization act not having to meet specific rating criteria is removed.  The provision for loan assistance is moved to the intent section.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    Jeff Robinson, Department of Community Development (with concern); Mike Ryherd, Low-Income Housing Congress (with concern); and Mike Sivia, Seattle Housing Authority and Association of Washington Housing Authorities.

House Committee - Testified Against:      No one.

House Committee - Testimony For:    Changes are needed to the rating and priority criteria.  These changes will allow the Housing Trust Fund to respond to a wider range of low-income housing needs.  Language requiring the department to give preference to loans would eliminate good projects.  Projects to the Housing Trust Fund have taken the maximum amount of loans from private sources and can not take any additional debt.  The language change for loans in the intent section (substitute bill) will send the message to the department that they should make loans when possible.

House Committee - Testimony Against:      None.