After a tense deadline last summer at the Highland Village apartments and nearly a year of wading through bureaucratic red tape, Bellevue has committed itself to the preservation of 76 below-market units.
The Bellevue City Council voted 4-0 to contribute $2 million from the city’s housing fund toward the King County Housing Authority to help purchase the property.
The 86 families (and 85 children in local schools) of the Highland Village apartment complex were faced with an eviction notice last year, which told the residents to be out by the beginning of October. A developer, Intracorp, had sights on the property for market-rate condominiums. The residents, by-and-large, are near the 60 percent area median income level. Many of the residents speak English as a second language.
According to the King County Housing Authority’s own guidelines, the area median income for a family of four is $90,000. Highland Village was charging residents well below market rent, but many complained at the time that the standard of living was dismal and sometimes dangerous.
King County, the City of Bellevue and multiple nonprofits teamed up to save the complex, purchasing it from the developer for $20 million.
Rents will not increase in the near future and significant repairs will be made soon, the King County Housing Authority said.
“This is about a community coming together,” said the housing authority’s Executive Director Stephen Norman after the purchase. “So don’t stop. Government does best when the people tell government what they should do. Nobody has to move. All the notices to vacate are ‘muerto’ (dead). Nobody’s rent is going up.”
Dan Stroh, Bellevue’s planning director, said the developer could have made more money by developing the property, but had a change of heart when the need for the housing was revealed.
Intracorp, the developer who purchased the Highland Village property, sold it for below the appraised value to the housing authority. It had planned to raze the current 12 buildings and erect 87 townhomes selling for between $650,000 and $900,000 each.
While the property was appraised in the past and reported in other media outlets as worth $14 million, a recent third-party appraiser valued the 4.48-acre property at $22 million.
Mayor John Stokes thanked the developer for being fair at the council meeting.
“The developer was willing to leave some money on the table,” he said. “He allowed it to be purchased at a reasonable price.”
That being said, buying existing housing which needs significant repairs at $20 million a pop isn’t the best way to allow lower-income families to live in Bellevue.
“This resolution completes an action that shows the city can be nimble when it comes to dealing with these issues,” said Deputy Mayor John Chelminiak. “But paying $2 million is not a sustainable way to deal with affordable housing.”
The $2 million comes from Bellevue’s housing trust fund, which gets $412,000 each year from the city’s general fund, and an additional $500,000 from loan repayment (largely from nonprofit housing groups like Downtown Action to Save Housing and Imagine Housing) each year. Bellevue has had that fund since the early 1990s, but the Highland Village assistance does comprise a good two years worth of funds for that amount.
“The rents will help pay some of those costs,” Stroh said of the residents. “But there is a significant gap between market rate and the rent.”
Stroh said some emergency repairs were made when the property was purchased last summer, but more substantial repairs to make the facility more livable will be undertaken as well. He said federal tax credits are one of the biggest boons to entities working with affordable housing, and Highland Village will be no different.
“Our lesson has been learned,” Stroh said. “We have to get out in front of these things.”
The 4-0 vote (councilmembers Kevin Wallace, Jennifer Robertson and Lynne Robinson were not in attendance) comes just a week before a significant vote on the city’s affordable housing strategy.
The council will vote on that plan to improve the housing situation in Bellevue next Monday, May 22.
“We’ve looked for housing strategies under every rock,” Stroh said. “We are looking at implementing new pieces, but there’s not a lot of mystery in terms of new strategies about housing.”
Elements of the housing strategy, which is expected to be passed, includes helping people stay in existing affordable housing, creating a variety of housing choices, creating more affordable housing, unlocking housing supply and prioritizing state, county and local funding for affordable housing.
This is concurrent with a city effort to spark affordable housing for artists and to work on affordable housing tied to a homeless shelter in the Eastgate area.