Planning Commission - Regular Meeting

All right, welcome to the special Land Use and Environment City of Olympia meeting, mini meeting. It's a Thursday, June 11th, 2026. I'm your chair. We're gonna start, we only have one committee business. I don't have to approve an agenda, it's just efficient. So we're gonna start by our introductions and we'll just go counterclockwise and then we'll do online. All right, my name is Robert Vanderpool. I'm the chair of the committee, City of Olympia.

Paul Barrett, member of the Olympia City Council, position number seven.

Tim Smith, I'm the director of the city's community planning and economic development department.

Anne Campbell, managing director of home ownership programs at the Washington State Department of Commerce.

Zachary Palmer, I am running the tech.

I'm Krista Lenson, I'm a City of Olympia housing program specialist.

All right, online. Who wants to go first?

Thank you, Clark. Hi, Victoria O'Banion. I lead Cooperative Housing Development for the Northwest Cooperative Development Center.

Clark Gilman, council member, member of the Land Use Committee.

Cool. All right. Well, we're just going to dive right in. We might have one more person joining us shortly, but we'll just go into the first question about the roles here. So, you know, what might be your organization's role be in tenant opportunity purchase or community opportunity purchase? As we go through and think about this as a policy as a city, I guess the main point is to see, what do you think your role in your organization would be? Victoria, do you wanna start? I'm sorry, I got you drinking.

That's fine. So we do help residents purchase their communities already. We do this in multifamily. Or not in multifamily. I want to do it in multifamily. We do it in manufactured housing communities. And so our role in that process is, you know, once we currently and like Chris's briefing gave you kind of a history of this. This already exists for manufactured housing communities across the state, Olympia included. I mean, we actually just emailed Krista today about a question and it's not the park is not in the city, but What we do is once we receive the notification that a manufactured housing community is for sale, and this, depending on what you guys pass, and if you do put something in statute, it could mimic this. It could deviate from this. But what we have currently is once something goes up for sale, we are notified. From there, our office does a feasibility review. So we look at, is acquisition even possible from a cooperative standpoint? That feasibility review looks really at the performance. The numbers are what's really driving the opportunity. And then our team also takes into consideration demographics of the tenants. Once we do that feasibility review, if it seems like it's a good process and a good opportunity for cooperative acquisition, then we dive into negotiation with the seller. And so we are having direct conversations with the broker or the owner of the manufactured housing community. This would be the broker or the landowner of the multifamily. And we're seeing if they would... sell to the cooperative buyer. We're not going to be the end buyer. The cooperatives is going to be the buyer. But since we've been doing this since 2008, we have a pretty successful track record and are able to work directly with those buyers and broker or sellers and brokers to have those negotiations. If we are successful in getting it under contract, that's when we actually go and start working with the residents and having conversations with them. Our role in that is to educate the residents of cooperative acquisition, educate them of cooperative business practices, educate them about the process of purchasing a commercial piece of real estate. And so we have a team of about 17 people that work with our residents and provide that kind of guidance for them. We usher them and steward them throughout the entire process of acquisition. And we are a bridge between the group of residents or the tenants and the broker or the seller. There's nothing like getting... You all know this as city folk, there's nothing like getting into a room with heavy heated people at constant debate with each other. And we found it to be extremely more effective and efficient if we provide that bridge between the residents and the selling agent. And then at closing, we also help facilitate securing financing and securing the capital staff for that acquisition as well. And then at closing, the cooperative. So during that process, we have created a cooperative business and at closing, the cooperative assumes the loan, the cooperative signs on the closing documents, and then the cooperative owns the business. Our role does not end there. NWCDC firmly believes that to own and operate a cooperative business, especially in this case, a multimillion dollar housing cooperative business, that you're going to need technical assistance. And the lenders of those cooperatives also believe that as well. And so we provide technical assistance to the cooperative for a minimum of 10 years. What that looks like is that we walk beside them. We help the board of directors navigate owning a business, understanding the financial documents that are in front of them making shared decisions what does that look like how does that how does that function um we provide guidance when they are going to do something illegal and um against fair housing it would be a violation of fair housing so we provide guidance. We connect them with property management companies. We help them navigate capital improvements in their assets that they now own. So we serve really as a business advisor. We don't own or operate. We don't make the final decisions, but our job is to walk with them and beside them and provide that business coaching to that cooperative. So that's seven minutes of what we do. I can piece apart any of those other things. I will say that we are the only agency in Washington that does this. We are the only agency that works to create cooperative businesses in housing communities like this. There are other cooperative developers, but they are pure developers in the sense of ground up development. We are developers in the sense of preservation development. For a long time, I didn't know what to call myself, but now I feel very strongly that I am developing a co-op and I can call myself a developer. But yeah, so that is what we would do.

Thank you. We need introductions. Would you like to introduce yourself?

Yeah, sorry I'm late. I had another meeting.

Oh, that's fine.

Hi, Victoria. Hi, Clark. It's Rebecca from... Thurston Housing Land Trust. I serve on the board. I have the pleasure of being the board president right now. I may have been involved with the organization since late 2022. Thank you.

We're actually on the, what might your role be in a tenant opportunity purchase or community opportunity purchase? If we want to just keep going clockwise here, kind of clockwise, I guess.

Is it?

Oh, well, you.

Would you like me to go? Yes. Okay.

Thanks, Anne.

No worries. Hello, everyone. Again, Anne Campbell with the Department of Commerce and Homeownership Programs. So the role that our organization can play is that we operate in support of the fine work that Victoria does, the fine work that the Community Land Trust do. We administer a number of programs that include capital funding, manufactured housing, closing supports, and foreclosure fairness, to name just a few. We do have a competitive funding source, the Housing Trust Fund. We also administer several direct appropriations, and depending upon the direct appropriation, that can be anything from acquiring property, to providing the funding to help build or expand on that property or to help homeowners or future homeowners become first-time homeowners. And that can be down payment assistance. That can be something that's called affordability subsidy. Had the pleasure of working with Victoria and Northwest Cooperative Development for several years. They do amazing work. That is one element of the housing continuum. As I like to tell people, What our competitive funding supports is essentially anything that creates a first time home buyer. We are agnostic on the type of construction. We are agnostic on the type of housing. It simply needs to create a first time home buyer and be sustainable for a minimum of 25 years. So that includes everything from modular construction to stick built construction. It could be a limited equity co-op. It could be land trust. It could be any of a number of of incorporation options. It can be any of a number of structural options. If in doubt, contact us and ask because we can be very flexible. We also help with direct appropriations. And sometimes what that means is that we administer the direct appropriation. So direct appropriation, for those of you who are not familiar with that particular slang, is when the legislature provides a specific amount of funding for an organization or for a governmental entity to achieve a specific project outcome. And when a direct appropriation is placed in the capital budget or in the operating budget, it is dictated by the section in which it appears. So We strongly recommend any organization, whether it is a nonprofit, whether it is a local government entity, if you are looking at seeking a direct appropriation from the legislature, make sure that you know what the terms and conditions are that you need in order for your project to be successful. Because many direct appropriations that come from, say, the Housing Trust Fund can't operate under the housing trust on requirements. The legislature has made other pathways to make it possible for direct appropriations to move forward. And I am always happy to talk to folks about what the impacts are of where it is in the budget, because ultimately we are trying to make housing and we need to make sure that funding comes through in a way that organizations can use it. Cool.

Your turn. Okay. But since I know everyone at this table except you, sir, and you, sir, do you mind reintroducing yourselves?

Yeah. My name is Zachary Palmier. I am a program specialist, and I'm mostly here just to make sure that the technology runs.

With the city. Got it. With the city, yes.

I'm with the city, too. I'm the director of community planning and economic development.

Okay. Thanks. So I'm with the Thurston Housing Land Trust. And what I imagine that the Thurston Housing Land Trust role could be if the city enacted TOPA or COPA. The thing that a community land trust does really well is owns the land and then helps ensure the stewardship of whoever it is, the entity that ends up owning the structure. So whether it be an individual home and a multifamily unit building, the thing that a community land trust does is typically owns the land and then helps maintains a ground lease with the owner of the building, whether it's a co-op or a condo association or an individual person and ensures that in perpetuity that that building is well maintained, that whoever is the owner of that is able to steward that for the time that they are owning it. And then at the time that it gets passed off to the next owner, that that next owner is purchasing it at, again, an affordable price because of the community land trust. In our ground lease, we put a resale restriction such that the value of that building is not tied to the market, but rather it's tied there's an agreement that there's limited equity or shared equity so that the next buyer can maintain an affordable price in perpetuity and that we maintain an interest in making sure that whoever is owning that is able to maintain it, do what they need to do such that any kinds of investments, public investments that are put into that are stewarded well so that in perpetuity that investment can live on and grow so that's what i imagine that we would do in a topa or copa is that we could have the role in having owning the land and helping with the stewardship thank you yeah all right and if anyone has any questions along the way outside the agenda just raise your hand or shout out right i i

I didn't catch your first name, Ms. Campbell. Anne, I got your last name. Anne, how many direct appropriations were there in life? This is very interesting to me because I did a lot of capital budget work, not in housing throughout my career, but I never realized that they had that many direct appropriations necessarily, but But Frank Chopp, of course, kind of stewarded a whole slew of projects. But like in last year's capital budget or the last couple of years' capital budget, are we talking about half a dozen? Are we talking about a lot more than that? I'm just curious.

Well, full transparency, I've worked for state government for a very long time. And the number of direct appropriations in infrastructure, in housing, in community capital facilities, in a number of arenas has grown significantly. I've only been working for commerce since 2007. And the number of direct appropriations have grown, like I said, significantly. I can't tell you an exact number off the top of my head, but under housing trust fund, I think there were only, I think I only have two under the housing trust fund statute, but under the affordable housing section, it's a lot closer to like 20, 25, something like that. But They are a necessary initial investment in many projects. And as I'm sure all of you are aware who've had any experience in pursuing any sort of competitive funding, competitive funding, and as Victoria points out here in the opportunity playbook, is part, it's how well a project is positioned to move forward within a six month period of the funding being arranged. So that means a very strong readiness to proceed. And a lot of organizations and a lot of local governments all over the state don't have the resources necessary to do the initial investment so that they compete well. And it is challenging. It is very challenging for local governments and for nonprofit organizations to put together competitive applications because it can cost several million dollars to get yourself aligned strongly. And that is very true in the multifamily world.

So this is really interesting to me because I did a lot of capital budget work for other things. So the appropriations weren't land acquisition, but they were really kind of to move those buildings forward for the actual project. Is the typical appropriation or has it been your experience or kind of across the map?

It can be anything. It can be anything that the organization needs and that their legislative sponsors put forward. It can be for design. It can be for a feasibility study. It can be for land acquisition and site prep work in order to do a bid for or to open up the local government owned property to bid or not to bid, but to receive bids from nonprofit organizations on developing that land. It can be it can be to build the structures that can be to build or provide down payment assistance for a project. It's the entire spectrum of whatever the ecosystem needs.

And just one other thing. I'm sorry, I'm on a roll here. Are different models of ownership a consideration for strengthen? For instance, I'm very interested in a co-op type model. the Swiss co-op model is kind of something I've been thinking a lot about. There wouldn't be any... Oh... I guess what I'm asking is if there's a preferred model that you see.

No, no, there's not a preferred model. And I'm happy to answer all your questions at another time as well. But no, that is not a consideration when we are awarding funds.

Well, thank you. I'm hogging up the time. I've got some other questions for later, but I'll let others ask.

It's a part of the landscape. I saw Victoria had a

Yeah, I just want to add into the direct appropriation conversation. We are fundamentally successful with acquiring manufactured housing communities and preserving them in the cooperative model because we have a direct appropriation. And we've had... I don't have it open. Since 2020, we probably had close to like $35 million. There was a direct appropriation to Northwest Cooperative Development Center to put subsidy into the acquisition of manufactured housing communities. And that is actually funneled through Anne and her unit, which is why we work together all the time. But So the money goes from the capital budget to commerce, then we actually, NWCDC does not get the award. We determine how much that co-op gets, and then we grant that award to that co-op. And it's because of that funding that we are able to preserve these communities. For manufactured housing communities, it's Well, when we initially started, we were putting about $20,000 per lot of subsidy of that rapid subsidy into the acquisition. Currently, we're probably closer to like $40,000 to $50,000 per lot. And that has a lot to do with pricing and pricing. 2020 is a long time ago now. So it's only six years. But a lot has changed. But that's where we are. We're still able to preserve them with $40,000 worth of subsidy at the end of the day. But having that money, and that's why that's on that playbook, having that rapid capital, to Anne's point, It has to be rapidly available outside of a traditional grant cycle and deployable within 120 days or so. And that is what we've set up. For manufactured housing and the state law, since the TOPA-COPA went into effect, Cooperatives now own about 3% of all manufactured housing communities across the state. Cooperatives own more than most single investor. And it's like, there's a lot of factors, but one of the big factors is that rapid capital.

Interesting. Well, I guess we're starting to delve into this, the discussion here. So, I mean, the, In your mind, like just an honest answer about the current landscape, your capacity as an organization, you know, what are your funding resources? How are you feeling about where we are and where we need to be going is really kind of the broad question is just to see, okay, as the city is thinking about doing this, how is the landscape for you? If you want to start, Rebecca.

Sure. Yeah. You know, I'm just going to add and bring into the room. I, as an individual, recently participated in a national incubator through UHAB, which is the Urban Homesteading Assistance Board. And they're a nonprofit that's located in New York City. And they've been supporting cooperative, affordable housing, limited equity co-ops, mainly in New York City for over 50 years, very successfully. and are now broadening their technical assistance nationally. And so I participated in a cohort. And one of the things we did is we really looked at, it was a group of practitioners, professionals from all over the country and thinking about what is the landscape, the ecosystem in our local communities to be able to do limited equity affordable co-ops. And it just really strikes me that in Olympia, there's so much of the ecosystem is here. I mean, I think that Victoria, like having the Northwest Cooperative Development Center headquartered here in Olympia is a pretty, it's a really unique resource that we have right here available to us. We now have, we are a young community land trust. And so in speaking about where we are organizationally, you know, we only have one staff person at this point in time and a very hardworking board. But through the support of the Department of Commerce and Thurston County, we've been getting some public investment. We're really growing. I feel like our capacity is increasing. I'm just thinking we do have a unique ecosystem here in Thurston County, in the city of Olympia. I was really pleased that Anne, that you were able to join. I feel like finance, being able to finance these things is, very, very important. And Victoria, I'd be really interested to hear more about what you can bring to offer in terms of what does financing of co-ops look like here in Washington State? Because when I was involved in this incubator and what I'm hearing from you have is, you know, they gave a lot of ways to finance things nationally, but what I'm hearing from peers in our community that co-ops in particular have some unique financing challenges that I'd be, I'm very interested to hear why some of the entities that will finance things in other states, what their hesitancy is to finance things here in Washington. And I also wonder, Anne, if you can maybe speak to that. And that's in a particular, in a co-op model. But I do know...

Yeah. Sorry, go ahead. Go ahead, Rebecca.

Go ahead, Victoria.

No, go. Keep going.

Well, I'm just thinking, like, I do think when we think about TOPA and COPA here in Olympia in particular, having the land trust is a really wonderful thing. You know, I feel like TOPA and COPA would be much harder to implement if there was not a land trust. So I think that that is a great thing that we have that. But I do think one thing that also when Krista, you and I had some conversations about thinking about like who would be helpful voices to have at this table. And I think the other entity, and I think Victoria, your group has done a lot of this. I'm also curious about just tenant organizing. Who else has been really active in tenant organizing? And I know that the city has done some things over the years that have really been supportive of tenants rights in the city and i've not been involved in that work so i'm not sure who are the entities that have really been bringing some you know voices to the table in that regards but that might be another another entity that would be really important i was noticing about the um fourth ave tav building going up for sale and thinking about that there's 12 units of affordable, natural, affordable housing in that building and curious, you know, if we had TOPA or COPA, what would be happening right now with that building? And curious if there is any, I mean, I'm guessing that there's not tenant organizing happening right there, but I think that that's something when we think about the current landscape and what needs to happen, who's going to fill that role. And that's not something that currently my organization is doing that work.

You guys did not tell me the tavern's for sale. We can buy it right now. Let's buy it, Victoria. Let's do it.

$1.8 million.

That's pennies. We can do that. I'll follow up. OK. Yes, let's do it. So I do have a building right now under contract in Spokane. I don't live in Olympia, otherwise I would be there. I live in Spokane, the other side of the state. And so I actually have a multifamily building under contract right now in Spokane to help prove this whole concept worthwhile, right? It's slowly falling apart, but not to reasons of the co-op model, but... We're just gonna keep plugging it away and make it happen. I think, so a couple of things, one, just so you guys all understand and have a foundation, a CLT and a co-op can cohabitate. They can live together. A CLT can live by itself, a co-op can live by itself and a CLT and a co-op can live together. So when we were passing the opportunity to compete for manufactured housing, all of us, quote, eligible organizations, the nonprofits, the CLTs, us, the co-ops, the residents, we all stood in a line together and said, you know, we will work together on our side and we will not, you know, we don't have like a, like a MOU or anything, but we're going to work together with something that has come on the market. We're not going to work in competition with each other. And I think that that would really, that would remain true. We, at the end of the day, want to preserve housing. At the end of the day, there's too much for one single entity to do as well. And so we would be working in concert with each other, which is what happens in the manufactured housing space right now. So I'm glad that you went to the UHAB training. I was actually, Sam Green and I were part of the initial UHAB training, the very first one, and we provided feedback and they have morphed it and changed it since then. So that we, based on our feedback and our experience and knowledge, I think a couple of things that are different than the outside market and what's different in Washington state. Most of the financing that happens in New York State and with UHAB is sold on the secondary market. So you have PNC Bank, you have all the acronym banks, right? They do participate in debt finance for a cooperative. They participate in debt finance typically for market rate cooperatives. And which is a different element than what we are talking about. We're talking about like these residents are coming to the table with maybe $10,000. So in a market rate cooperative, typically the residents come together and they get a large sum of financing. And then their return, what they get back when they leave the cooperative, is based on the market. So the value of the property increased by 60%, their share is going, and their return, what they can get is going to increase by 60%. In a limited equity cooperative, which is what we propose and what we support, that return is limited, which is why it's a limited equity cooperative. It's limited to 2%, 3%. It could be, and that's written into the bylaws, it's written into the corporate documents, it could be limited to 10% return. that still would qualify it as limited because it's limited. It's not market dependent. It's based on a projection and a number. So bigger banks are more interested in the market rate because the borrower, the individual people that are part of that co-op have more cash to bring to the table. The people that we're talking about are low and moderate income individuals, sometimes very low individuals who have no cash. And so the banks see that as a very high risk and they're not really interested. However, I have spoken with state and regional banks that are interested. They don't sell their debt on the secondary market. And so they are interested in holding their debt and being part of the capital stack. They are... as you can imagine, reluctant. They want to be a small portion of the capital stack to prove the concept. And by small portion, I'm talking like they want to do like 30% of the capital stack, which is fine. But then that means that I have to bring together a lot more banks and a lot more subsidy and make a lot more people fall in line and agree to be in second and last position and somebody else is in first. Not impossible. But this is also part of the reason why I'm working very hard to get this project in Spokane to work. Because if I can demonstrate that it can work, then I build confidence in other banks. I build confidence in the CDFIs. There are CDFIs that are interested in participating as well. And so all of that to say is the financing isn't actually impossible. It's there. It's going to take a minute for everybody to understand it and be really comfortable with it. But it is there. The last thing I'll say on the financing is subsidy is key and helpful. Yes, I do need subsidy wherever that comes from. But the WSFIC, the Washington State Housing Finance Commission, That is going to be the biggest friend in all of this because they do have debt financing. They are not necessarily controlled by the same parameters that the Department of Commerce is controlled by. And their financing comes at a really low cost. It typically is a 2% interest rate. And so I've raised this to them. They know that I need them to participate. But they're that this is just probably another statute that is going to have to be they're going to have to be told that they have to participate these are conversations that i'm having um down the street at the state capitol with legislatures um yeah i think that's everything thank you i got a lot of notes out of that one

So financing challenges for cooperatives. Second, everything that Victoria just shared, I want to take it a step further though, and this is kind of getting into the nitty gritty of how governmental financing works and to a similar degree, how lending institutions that hold their own debt, how that works, depending on how they're organized. But it boils down to the type of funds and what they can and can't allow because cooperatives, the limited equity cooperative and not limited equity cooperative, the cooperatives in general are organized as corporations. They could be an LLC, they can be an escort, they can be any sort of thing. But what it boils down to is they are a for-profit entity. Not always, but they are generally speaking for-profit entities. Most of the state statutes that govern how affordable housing monies can go out do not list for-profit entities as an eligible organization. Now, the way that the financing works for the vast majority of affordable housing is it goes through a nonprofit organization and then it is assigned, it's assumed and assigned, very capital A's there, to a corporation that is strictly for that particular project. Ostensibly, the nonprofit still is on the hook for all of the requirements, but the assignment assumption goes to the corporate entity. But again, that is only available if you are using the type of state funding that can be paid for or that can pay for, say, loans or can be assumed and assigned. So it's taxable versus non-taxable bond proceeds. When we are dealing with banks, and I'm using that term broadly, that includes credit unions, that includes CDFIs, that includes everything. When they are holding on to their own debt, and one of the reasons why they are wanting such a small share of the debt is because they have to abide by the banking laws that are established by the Department of Financial Institutions when it's a state-chartered bank or by the feds if it's a federally-chartered bank. So proportionally speaking, there's only so much that their portfolios can absorb. And that is unique to each organization. I completely concur with Victoria. There is a lot of interest in it because they know that these are relatively safe investments that have a halfway decent return on them. And it's great for their communities that they serve. But they have to keep in mind the regulatory requirements they have to abide by. Um, let's see here. Uh, and then last but not least, certainly, and this is especially true when we're talking about like for that tab building is that when you are dealing with. State money and, and while the housing finance commission is technically a state agency, it is very specifically held separately so that it's debts are not contributed to the state. It's think of it as sort of a quasi banking institution. But when you're talking about like direct appropriations through the capital budget or you're talking about funding that comes from a state program through a state agency, many times those buildings will be required to be brought up to current code. And that's not just current code that's on the books with the city. That's whatever that program's current codes are. So like Housing Trust Fund has something called the Environmental Sustainability Design Standards, which is kind of a takeoff on LEED, if you will. So that adds another cost to have of existing buildings. That cost is something that is eligible for payment by the state. It's a reimbursable expense, but it is an expense that just adds to the over cost of the development, if you will.

Interesting.

That's why a direct appropriation is better.

From the right section in the budget. Correct, correct. And to point, to really knock home Victoria's point, and I have testified to the legislature to this effect, the opportunity to compete to purchase program, which is a phenomenal step forward for manufactured homeowners rights, is a 70-day window. So I want you all to think about this. Think about your neighbors, okay? If you haven't been talking with them, if you haven't been meeting with them regularly and built up a really good relationship, do you think you could get all of the neighbors in your neighborhood in 70 days to agree to disclose their personal finances and agree to purchase your neighborhood in 70 days? I barely know my neighbors. And it's a ridiculously short period of time for a very sophisticated and highly emotive process. And so Victoria's organization getting those direct appropriations means that while all of these purchases are happening over the spectrum of the year, that when they come time to closing, they send us information, we verify that they've dotted all their I's across all their T's, which is fairly simple since it's Northwest Cooperative Development. And then we are able to meet them at the closing table and escrow and sharing that money without having to wait for that competitive equal opportunity funding program that like HTF has and several other programs have, which are mandated by statute.

Go ahead.

No, I was just gonna say, so direct appropriation for statewide, we need it. Like that's something that I will be advocating for. I think if you're talking about councilmatic or city funding and funding sources, 1590, 1406, All of those funding sources can be used. However, we need those funding sources to be flexible in the sense that we do not have to have site control. It's when we have to have site control that that limits our ability to use it because we can't have site control and then wait for nine months. to close, I have to be market competitive. Even if I'm offering them $100,000 more or have a better offer on the table, six to nine months for cash on hand, I just killed the entire deal. And so this is actually commerce. Thanks, Anne. We did get money from the housing trust fund to with just a concept without project identified. If that can be part of funding sources, if the concept can be approved, that gives us the ability to actually use it. You say we have to have something under contract and the money used in 12 months or we give it back. fine. I am very much okay with that and support that idea. But it's having that site control that really limits our use of subsidy in a competitive grant cycle.

I guess that kind of leads into what I was going to ask, like the feasibility issue. So like locally, one of the issues that the feasibility of TOPA and community opportunity purchase locally is as we're writing a policy, right, as we are looking at that as a city, you know, how, you know, it got brought up, site control got brought up 70 day time periods, like, you know, in your mind, You know, in order for us to be feasible as a city, one of the things I think about quite often is the timeline in which the city establishes or works on these things. I know there are timelines in state, there are timelines with other funding, but if the city is going to get involved in writing an ordinance, right? I wonder quite often what can we, you know, without consulting our city attorney about how long we can legally do that, right? I often wonder what is the, in your mind, the feasibility of us, like what would the city need to definitely include if we're going to be writing out an ordinance or a policy? Be kind of the question.

Is it even necessary to have an ordinance and a policy? I mean, would be another question.

Yeah. So I would just say that the necessity slows down the self. So, I mean, there's manufactured housing communities that were not purchased by a cooperative or by a CLT or any other agency, for sure. But, A, we knew that they were being sold. And so it slowed that process down a bit. It allowed... supporting agencies, Department of Commerce, our eligible organizations, just to be aware of it, and to create a roster of like, who are the affected individuals, right? Who should we be looking for and looking out for moving forward? That doesn't happen right now. First off, fourth off tab is actually not online. There's not a public listing that I can find right now. So like, I don't know Like me sitting in Spokane does not know that that is for sale right now. So it also created a database of sold properties. So that was helpful. So I would say that those are the two reasons why you would want to put statute in place.

Victoria, can I have you just amplify a little bit? On the first one, I think you're talking about notification. And that was really the first plank when Miles and Sam came and spoke to us a few years ago on the same topic. So could you describe what would be or what have other local governments adopted as the notification requirements?

Yeah, so... There's not. There's not another good state COPA in Washington on the books. No municipality has a good one. The best one that we have is the manufactured housing community one. The first year that we did it, we got it wrong. It was not good enough. And truthfully... both the sellers, us as the buyer representing the cooperative, the Department of Commerce who manages the process, all agreed that we got it wrong and we collectively went back and corrected it. So it's still not perfect, but it has all of the kind of elements that you need in that notification. So I would start just copy and paste from there. It's going to be Good enough, it is widely accepted, and nobody is throwing a fit right now about it. The other element that, and I've seen this in other states, the other element that is essential in a topocopa is that it's managed by somebody that's a third party, a neutral third party. If we didn't have the Department of Commerce actually managing the notifications, tracking them, following up on them, There is no teeth in the statute that anybody would have any thing to do about. Do you have to pay for that FTE in the Department of Commerce's place? They're paid for. And is it two or two and a half?

Well, the whole program has more than that, but that's not how the funding is.

comes across but yeah it's not a one-person job yeah it's it's not a one-person job it's you have i think you in olympia you guys could maybe do one person but i would plan on doing two managing that process and the notifications that is i feel like that's the one of the single most critical elements of the whole thing um The other element is that that notification is delivered to the residents. It's delivered to the, in our case, the Department of Commerce, who is managing the process. And then the Department of Commerce distributes it to eligible organizations, which is ourselves, the city, municipalities, nonprofit organizations. Yeah.

And as much as I agree with Victoria that the updated version of the statute is better than the first one, it still has issues. And as the head of that particular department, I would say have the folks who would be implementing this be part of your overall discussion. And I do think that the city should have it in policy because it makes it very clear that the prioritization for the city and it makes it very clear the intent.

Mm-hmm.

Duly heard. Clark, do you have any more of that or you think you're good?

I'm glad to have you run through the bigger prompts and then I'll be part of the conversation about that.

Well, I guess, I mean, we started to get to the city's role and how the city can support. We talked about having potentially one or two FTEs, right? Talked about third party talking about creating a stature at the local level in ordinance. But in order to ensure the program is successful, what do you see as the city's support? I'll start with you, Rebecca. What is the thing that you think that the city could be the best at? partner in this?

I'd say don't start, please start with Victoria or Ann, because they have more experience than the land trust. I would, yeah.

Ann?

No, that's, where would I start? What would the city's role be? You know, I would reflect that question back to you. As a state agency, we have to tailor our approaches for both densely urban areas as well as very, very rural communities. And so we have a broad approach to reflect that diversification of populations and approaches. I would very much make it clear that the city, the stance of the city. So for example, on the notice of opportunity to compete to purchase, number one, first and foremost, it is not a first right of refusal. And that is where a number of organizations and individuals are disappointed, for lack of a better term. But you can't force someone to sell their property to an organization or a human being or whatnot. You can make a space for that to be considered, but you can't force them to do it. You can certainly incentivize them to do it. Making sure that the approach is equitable to both the property owners as well as the residents. Have a robust education campaign, again, for both of those parties, not just one centered on the tenants. And being certain that when you're administering it, and this is the hard part, because the notice of opportunity to compete to purchase by statute, by law, the owners of these communities are supposed to provide very specific information and then send that same information to commerce and to each of the residents in their communities. And the reality is, is that people in the communities will get some interesting piece of information that doesn't have everything in it. And what we get is what actually is required by the statute. Now, it's entirely possible that this is purely a mistake on the part of the owners of the communities and their property managers. It could not be. But we have a tool on our website that gives a template to the owners of these properties to their property managers that says, this is the information that's required. They can fill it in and populates, and they can use that to notify all of their tenants. The other thing that we have learned is that there needs to be an expiration date on this notice of opportunity purchase. Because right now we have a number of organizations that thought that, oh, we'll just issue one and it will be open in perpetuity. And so they won't have any interest in actually selling their property, but they just want to have that regulatory burden checked off. And I don't even need to describe to you how traumatic that is for the residents because of the uncertainty there. So having either an expiration date or a mandatory re-upping of it at a cost because otherwise they'll just do it. If it's free, they'll just do it to keep that door open. And that is absolutely their prerogative. Again, it's their property. They can do with it what they want within legal limits. And Be even handed in that enforcement and know that there can be some unintended consequences. So my team is amazing. My team wants to make sure that the tenants are very clear on what their rights are. They want to make it very clear they know what their options are. They want to make it very clear to the owners on what their requirements are as well. And so it was brought to our attention that when we notified the owners that their announcements were inadequate, that we were actually taking away a route for tenants to stall or otherwise halt the sale of their communities. And there isn't a similar sort of helpful correction that can be done in the other direction. And that hadn't even occurred to us because we're trying to provide the best customer service both to the owners as well as the tenants. So that's what I mean by being very thoughtful and including your staff who would be implementing this in these discussions and being very deliberate in your choices city on what you want as your outcome.

Everything Anne said, correct, agree.

All right. Do you want to answer? I know that you're a newer organization.

Yeah. I don't know that I have anything more to answer. One thing I'll just like, is I don't know when it might come up. Something that I learned from my UHAB cohort, there were a few people from representing that came from the city of Chicago. And it's my understanding that Chicago right now has a couple pilots going on. And so they're doing TOPA, but just in two different distinct neighborhoods. And someone in my cohort had developed like this beta tool. It's not actually published, but it was an online tool so that people, both owners and tenants in these pilot communities could interface with this tool And they could find out, you know, was their property in the pilot area? If it was, they could say, well, I'm a resident or I'm an owner. And then it would, it would provide them a bunch of information, like here's your rights, here's some templates, here's some forms, here's some timelines. And so I could imagine that if the city was going to do TOPA or COPA, having some of these, these tools available, both to residents and to owners to be able just to get more information, I could imagine something like that being helpful.

on the education line.

Yeah. I would just like put a pin in that you, my professional recommendation is that you don't just do TOPA or COPA, but you do TOPA and COPA. Because technically, Rebecca couldn't purchase because she would be a COPA, right? That's a community. The only COPA is a cooperative. And honestly, as a cooperative developer in the realm, that's not the solution for every tenant group. And so we would want to make sure that the housing authority, that a nonprofit, that anybody could come in and also work to preserve those units of housing.

And Victoria, in riffing off what you're just saying, it's my understanding too, right? There can be instances where the community organization comes in and might do the purchase because they're able to say, put together the financing more quickly with the long-term goal that they are eventually, they're just holding it temporarily and they are going to turn around and sell it.

Absolutely. Yep. Yeah. There's a lot of effective models that actually do that, that would provide... There's a model in Baltimore right now that it is a co-op. It is a property management and asset ownership co-op that is going in and buying the multifamily buildings, keeping the rents low, subsidizing the rents. And then the idea is that co-op... is a property management, asset management company. It's a landlord. That co-op will eventually roll those over to the tenants. But they're just going in, and they have access to capital. And so they're just going in and buying. So that would be a community in the COPA that was buying these to preserve them. I just want to put a pin also in the tenant organizing. And this is lessons learned from doing this in tenant organizing for almost 20 years, since 2008. Tenants, one, get really confused no matter what you tell them. They're going to get really confused for the most part. And then two, We have found that if we go in and start talking to groups of residents before we know if it's possible for them to even do this, before we know, really have any clear picture of the outcome and the trajectory of where acquisition is going, we create a really awkward, false sense of hope. I have no idea how many emails. This is not my job anymore. I pass this job on to somebody else because it fills your inbox. But there are residents that will email us on a daily basis asking us, how's that negotiation? Do you know anything more? Do you know anything more? Can we purchase our community? Can we purchase it? And we've signed an NDA. I can't tell them anything. And so... And then they call the Department of Commerce and Randy and Nicole at the Department of Commerce who manage the process will call us. They're like, do you know about this resident? Yes, Randy, we know about this resident. And then they'll call somebody else and then they'll call us and we'll be like, yes, we know about this resident. We can't do anything about it. And so we have no clear answers. So as we're talking about tenant organizing and helping to communicate, we have to be very careful about protecting the hope and not putting in false hope into residents. That's, I think, the last thing that anybody wants to do. It can be done. It just has to be done with care and strong coordination. Like, truly, there is a... A strong coordination now between the Department of Commerce and the Attorney General's Office and other advocates and us for the residents and manufacturing housing communities, we would want to make sure that that is established for multifamily in Olympia.

So let me just add on to what Victoria said, and you did a magnificent job on that. There are two things at play here. Well, three things. There is the uncertainty that people would be facing, which is very scary. There is the fact that this is commercial real estate, not residential real estate. And commercial real estate is handled very differently than residential real estate is. One of the folks who is the topic of this particular subject was very frustrated with the fact that the community was being sold for quite a bit above the tax assessed value. And so we had a conversation about commercial versus residential real estate and ultimately the fact that owners can sell their property for whatever they choose to sell it for. But one of the ways that this kind of hope can be protected and that some of these questions can be either offset or otherwise ameliorated is by providing prospective tenants, or excuse me, prospective owners, whether they are looking at becoming a cooperative or a member of community land trust or what have you, is have them take, or not have them take, but strongly recommend that they participate in like first-time home buyer classes that they, I would say, take a look at what the Washington Homeownership Resource Center has. It's a nonprofit organization, and they have a whole roadmap to homeownership that is free for anyone to take a look at. They have housing counselors, but I would look very much at partnering with that for anyone who would be interested in becoming a, going from a tenant to an owner, just to get them familiar with that process even if it's only academic because that will help to avoid some of the well what's going on what's going on because people are anxious and rightfully so but because this is commercial property negotiation the the relative transparency of residential transactions isn't there and is thurston county unique

in washington state for not having its own um non-profit that is helping first-time homebuyers not necessarily um the the and i know it's different now too since there's so much more that's available virtually and you don't really have to walk in a door anymore but well but it's very helpful because of those interpersonal relationships and um

No, because we have so many. We have 39 counties, right? And only a handful of them are large. And I would say 13 counties are probably medium-sized. Y'all would know better than I do. But I try to funnel everybody to the Washington Homeownership Resource Center because they cover everything from first-time home buying to foreclosure. And they have incredibly well-trained staff to help with talking people through that in a variety of languages, in language that is very accessible to them. Um, it's, you know, home ownership is passionate of mine. So I'm like, well, heck yeah, Thurston County should have one. But the reality is that there are so many things that the County has to provide the various cities have to provide that if there are state federal resources that we can lean on, then that is probably a better use of everybody's time and monetary investments. And I am a resident of Thurston County, just so y'all know.

I will add that the class that Anne is talking about is something that we would want to see the cooperative members take anyway. Part of what we do and how we talk, even to our manufactured housing, is like, Stabilizing your rent is one thing. Stabilizing your budget and getting control over your credit score and your own personal finances is another thing. Like, great, we stabilized your rent. We stabilized your housing costs. That doesn't just magically make your individual household budget better, right? It doesn't make your credit score better. So we are actually working with a group in Pierce County to have our residents and manufacturing housing communities take the credit classes. There's a whole slew of classes that housing counselors can offer. First-time homebuyers is one of them. But we would encourage people to take those classes.

It's actually a prerequisite in order to qualify for many first-time homebuyer programs.

In y'all's experience, I mean, I was a first-time homebuyer and I took a class, but I lived somewhere else and I did it in Clark County. Are those courses for individuals typically free? Yes. OK.

Interesting. I was just talking to Christa over here about the last part being the initial approaches of policy design. We kind of went over a lot of that already, right? But I'm just going to, since with the remainder of time, I'm going to, I guess, leave it to my councilmates if they have any other questions or if there are anything with running along these lines. Go ahead, Clark. Right on it.

Thank you, sir. A couple of questions. First, sort of about what the success or the track record has been. I'm wondering about what the success has been in manufactured home communities of holding housing costs. How have those... I'm assuming it's the same as somebody buying a home, but I don't know if you have... balloon payment kind of initial financing that, you know, things different from a regular home mortgage. So just for, that's my first question is how much does this stabilize rent increases or mortgage increase sorts of costs?

So it's kind of a hard comparison for manufacturing housing because manufacturing housing, the person owns that house and then the cooperative owns the land. But I will tell you, It's an amazing number. And so what I will tell you is that we have a property in Meade, which is north of Spokane. They purchased in 2016. They purchased for $4.5 million in 2016. They're going through a refinance because it's a 10-year loan with a 30-year AM. So they're going through a refinance right now. They just came back with their appraisal. And that park is now valued at over $16 million. Wow. So that is an amazing return for them. That is preservation at its finest. They have a $16 million asset and they have $3 million worth of debt. That's like chef's kiss. Gorgeous. Their housing, one of the residents purchased her home in 2014. right as they were purchasing the park, she purchased her home for $25,000. She put all of that on credit cards because that's how manufactured housing is purchased. She put $25,000 on a credit card. Not a good idea, but that's what she had to do. She also, a couple years ago, refinanced her home. She got a credit union to hold the debt at a lower interest rate. Great. Part of that was that she had to get an appraisal on her home. So basically the same time period, her $25,000 home is now worth $160,000. So she also really great. Good job. Like really like did a solid investment there. Part of the reason why the assets are like increase in value. And this is, this is, Harvard Joint Center for Housing Studies did a study on manufactured housing communities. And this just demonstrates this and proves this. When the cooperative owns it, they operate on a cost neutral basis. And so their operation, their cost to operate just keeps going down and down and down because they're able to control those costs. They're able to anticipate costs that are coming up too. They're like, oh, two years from now, we have a major capital improvement that needs to get done. So they incrementally raise the costs that they each contribute so that they're putting money in savings. So their costs are tight in general, The asset is cared for in a way that it's not cared for in an investor-owned community. When you live there, you care about it. When you don't, it's really easy to forget about the problems that the asset has. So those assets are being fixed on a more regular basis. So you have a higher value asset at low cost of operations. And so from an appraiser's valuation perspective, it's a really solid asset at the end of the day.

And just to confirm, that translates into a lower lot rent and whatever sort of assessments they have for a repaving. I'm asking if it beats being in a market rate apartment where they just did a 27% rate increase after COVID, right?

That same park that I'm talking about, those residents are paying $380 a month.

That's what I'm talking about.

So, yeah, because I need you to toot your horn a little bit here. So the answer to the original question is there is kind of a balloon payment, but that balloon payment is is factored in. And when it is refinanced, they get very similar terms after that to keep those monthly payments low. There is, of course, no control over property taxes. There's no control over the cost of insurance if it goes through the ceiling. But the community, because it gets mandatory 10 years worth of assistance and guidance in regulating itself by Victoria's group, sets itself up so that unlike a privately owned or corporately owned community, that it foresees those infrastructure improvements that it needs to do and will set aside and budget for those infrastructure improvements And as the value of the community increases, that increases their credit worthiness to lenders. And Victoria was instrumental in passing a bill last year that extended the ability to take chattel property and remove that so it became part of the land. So Victoria, would you talk a little bit about that and the impacts that it has had to communities?

Yeah. So in manufacturing housing, she had to put her home on $25,000 on a credit card. It was either that or it would be financed with like a personal property loan, like you do your car. For five years.

Like five years. Five years.

Yeah. So like Anne said, I was like, well, we can stabilize these communities, but they really can't replace their homes. They can't afford that. So I did pass legislation that now allows the residents to change the title of their home from personal property to real property exclusively in manufactured housing communities that are owned by the cooperative. And then over the past year, I've been working with Fannie Mae to make sure that their loan product can be available here in Washington. And that's why those residents are taking the home buyer class and the credit worthiness and all these classes. They're taking all of these classes because they are preparing to be able to transition their debt into a traditional mortgage. They also will qualify for down payment assistance because on paper, they've never owned a home. The thing that they own is a glorified RV. And so they're also going to be able to qualify for down payment assistance. and get themselves out of $25,000 of debt that's at a 14% interest rate, get down payment assistance and get a loan, even at a 6%, our terrible 6% that we have right now or six and a half that everybody is sad about. We have people in manufactured housing communities that are at like a 14 to 20% interest rate. So yeah, I think like to Anne's point though, Even in multifamily, we have these levers to pull. And really, it's in any shared equity, community land trust or cooperative. We have these levers to pull to be able to stabilize that asset, stabilize those units of housing, and then work with those individuals to provide opportunity for them to create wealth. The property that I have in Spokane under contract, it's an SRO. So it is folks that are at 50, 30% AMI. They are thrilled. They are thrilled that their share loan, because their share loan is a lot of subsidy, But they were so thrilled at the idea that after a single year, if they left the building, that they would leave with $200. And that would be their equity. That's all they would earn. They were thrilled with that. And to me, that's deep empowerment. That's deep telling these forgotten individuals, we can do something to help you here, to preserve this unit of housing, to give you an opportunity to build up. And that's what happens in a community land trust and in a limited equity cooperative.

One other related question, then I'll yield. And that's in the projects that have been successfully converted so far, what sort of a percentage of public investment does it take to make it rather than a market rate into a long-term affordable project?

30 to 40% is what we need of subsidy. If the market changes, it can go back to the 20% that it was before. The SRO that I have under contract, it's 50% because that's really low income individuals. Rule of thumb, 30 to 40. If I have 30 to 40%, if my capital stack is subsidy, What that does, though, that effectively serves as the down payment for my traditional lenders. My traditional lenders see that subsidy as the down payment so that their debt is only 60% or 70%. And they're much more interested in that conversation.

So I want to also add to this, because this is a question that we get a lot with traditional housing trust fund, is that that initial public subsidy stays in the property. And so it stops being a dollar figure and becomes a percentage. So as the property increases in value, that subsidy also increases in value at 15%. It stays at 15%, whether the property is a million dollars or whether the property is $16 million. It's still gonna be 15% of that is subsidized. And that subsidy carries over through subsequent homeowners in the community. It is what helps make that community affordable for folks. That's one of the terms, permanent affordability, because it carries over. It occurs to me, one of the things that we haven't disclosed is the funding that Victoria's organization uses that they've received through the Housing Trust Fund, that pot of money comes with a requirement that those communities be uh affordable for what is it 50 years 40 years 50 years something like that 40 years 50 years i don't even know because they're never not going to be affordable so it's not it's not a number that i'm deeply concerned about and but but that's reinforced with covenants that is really with contracts so that public investment just grows exponentially over time

And to Anne's point, the other thing that I point out is this is a one-time subsidy. We're not coming back every year to... This is not permanent supportive housing. And permanent supportive housing has its role and its place and all of that. This is a one-time subsidy. And so while 30% may feel steep, it isn't when we think about the preservation of 40 years. It's pretty... cost effective and efficient to do things like this.

30% for 100 units for 40 years. That's a bargain. Yeah.

And I'll just close by saying I'm in support, and I think it's a wise idea to just start with the Washington Manufactured Housing Community Language. And Anne's list of bullet points about communication and education, I think, are super important to consider. And I think we have a particular challenge if we're going to be an early adopter in this communicating that This is somewhere between nonprofit and for-profit housing, and that not all affordable housing has to be managed by a nonprofit organization. So I'm really grateful for everything you've all shared tonight. Thanks.

You know, I feel like one other thing that we haven't brought into the room, that's something, Victoria, when you were mentioning at the very beginning how community land trusts can be layered in, and it's not a critical element, but can be layered in, And I feel like something we haven't brought into the room to make sure everyone knows that when a community land trust is involved, a community at this, something that's unique to Washington State is that Washington State recognizes and will remove the community land trust does not have to pay property tax. And so that it ends up that the owners of the building also have reduced property tax, which helps in their long-term affordability just because it brings their taxes down. I mean, the As a city you're still getting some property taxes, but for long term affordability, it can make the difference for owners to have that decrease costs.

And that's true in in cooperatives as well.

yeah.

yeah sorry quick question so when Sam who worked at the Northwest cooperative development Center does some work for us prior on this topic. we talked about how a certain unit size or unit count would be ideal in terms of a cooperative. So I guess I'm curious. I know, Victoria, with your experience with manufactured home communities, if there's a certain size to become an effective cooperative, if you all have thoughts about if we were to do a pilot or if we were to start with a narrower scope for a policy, Like, is there kind of a characteristic of a building or a unit count that would be more kind of a sweet spot for us to start in?

The unpopular opinion. There's a valid reason why really anything less than 12, maybe 10 units is not feasible. And it's not feasible and it's not going to work because then you're talking about 10 people that are financially responsible for all of the debt and all of the operating costs. What if five of them work for the bread company and the bread company goes out of business? What are we going to do? That's a lot of weight to carry on a small number of people. And so the quadplexes out there are going to hate me. And I just don't think that it doesn't pencil. It puts a lot of responsibility on a small amount of people. For our manufactured housing communities, one of our lenders will not allow for anything less than 25 units. We have to seek an alternative lender if there's a property that we're putting under contract in Tacoma, and there's 19 units. And for valid reasons, we feel like it's going to be OK. And we had to seek an alternative lender. So wealth even gives me a bit of the ick of like, oh, that's really scary. But that's also a common number of units. It's either 12 or 16. 16 would be my ideal. But if I if we're looking for like baseline for me, it's 12.

Victoria, in your experience, and maybe this is mixing models and shouldn't be in a topocopa discussion, but for smaller buildings, and I'm especially thinking here in the city of Olympia, where it's wonderful that with the, I feel like there's been things that have happened for tenant protections, but I've also heard that it's making some challenges for small landlords. And so I'm hearing that there's some small landlords that are starting to look at selling buildings because they are not able to keep up with some of the standards that now they have to fulfill. So if we have small landlords that have, say, duplexes or quadplexes or something that are going to sell, and if those units are really too small to make as a co-op, but if there was a scattered site co-op, that it was one co-op that umbrellaed several duplexes, right? So you had, say, five duplexes that now make 10 units under one co-op. Like, is there a way that that can fit into this model? And maybe that doesn't work with TOPA and COPA because of the size of the unit.

No, I think yes, yes, yes is the answer to that. And also you can have a scattered type CLT and do that too. Like you could condo those quads and triplexes and duplexes and do that. So yes, I think that if you're looking at a pilot, my personal opinion would go 16 plus. 16, you can give me 200 residents and I can still organize them. There is no maximum, there is for me right now, there is a minimum. Rebecca, to your point, though, if that is successful, there can always be adjustments to that. And we can go down to a duplex. And we can get creative. We can do a scatter site community land trust. We can do a scatter site cooperative. We can use Baltimore's model. And we can have an entity out there that is purchasing them, preserving them, and then over time, essentially being a holding company, over time converting them into cooperative ownership or over time selling them to the scatter site CLT or the scatter site co-op. So yes, there's Nothing, and that even is true for a single family home. Like, we can go down to a single family home on that, right, on that model. So nothing's out of the picture, but if you're looking at a pilot, my personal preference would be 16 plus.

And I want to point out a couple of things. Number one, what you've described completely and utterly doable. Utterly doable under housing trust fund, utterly doable about a number of things. What many people do not understand or do not know is that a fourplex, anything up to a fourplex, so a single family home, which could be a townhome or a standalone home or a condo or what have you, a single family unit, a duplex, a triplex or a quadplex are all underwritten the exact same way under Fannie Mae and Freddie Mac. So if you are a first time home buyer and you are looking around at properties, You could, in theory, buy a fourplex if your finances allowed for it. And your income would be looked at not under commercial real estate, it would be looked at under single family real estate. That's how Fannie Mae and Freddie Mac look at it. So when... One of the things that if I were looking at this, I would look at an opportunity like that where small landlords are trying to offload and look at it like, okay, is this suited for a community land trust? Is this suited for selling on the open market for a first-time home buyer who could do, because we also have a program called Acquisition and Rehab, which is where We give money to nonprofits like Community Land Trust and they buy the property. They rehabilitate the property, which is tech speak for remodeling. And then they sell it and they can sell it and they can retain the property, which is how you end up with these scattered sites, Community Land Trust. Or they can sell it to someone and have it be in their portfolio as a permanently affordable property, but they're not holding on to it. There are a couple of different ways to do it. And Victoria, you surprised me because I would have thought the floor would have been like 25 because I don't know that I would be comfortable with one as small as like 10 for exactly the reasons that you pointed out. My background is also as an underwriter. But there are a bunch of different options. And I think that we have a place in our communities for small landlords and that we need to be mindful of what they need in order to be successful. Um, but absolutely what you're describing, if, if somebody wants to offload their portfolio and I have a friend who. I think she lives in Olympia, not Lacey, and they do have several rentals and they are thinking as they are getting older of, of divest divesting themselves. And, and it would be fabulous to see that go into like a community land trust portfolio. We also have housing authorities that are divesting themselves of their single family residences or their duplexes in Pierce County specifically. And they have arranged a sales pipeline through one of the local nonprofits where the existing renters get the first opportunity to buy those homes and the nonprofit goes in and acquires them and rehabs them. So there are a bunch of different approaches that can be done and be done very successfully. Thank you for bringing that up.

I just want to say the idea of a pipeline portfolio is like the most ideal situation. Like if we can have a pipe, like if somebody wants, if you have, if your friend and is interested in like slow rolling and slowing and like maybe one divesting one property at a time, That's the kind of stuff that I can, because then I have a pipeline and now I can go to those competitive grant cycles and I can effectively apply because I have a pipeline with site control. But if I don't have that pipeline with site control, I can't effectively apply. So those smaller investor owners that are struggling to keep up their duplexes, tri and quads, that is another opportunity to pilot a program where you work in partnership with them. If you're looking at properties, the other thing that I'll mention, and other cities have really gotten stuck on this, and so I really appreciate that you are not stuck on it, is that we need to maintain what is currently stabilized, what is currently affordable. And that is true. We do. Yes. Like the LIHTC deals and what else out there has covenants on it. Yes, we do. But that is not the only thing. I think some cities that I've talked to have really gotten stuck on, like, how do we do that? And you do it in the exact same way that I just said. Like, there's not, like, you don't treat it differently. Even if it already has a covenant, affordability covenant on top of it already, that affordability covenant would just transfer to the co-op, transfer to us. Well, we bars would like lose its mind, but there's ways that it's okay. We bars is how we report our, our affordability to the department of commerce. It's a clunky clunky thing, but we would be okay. And we will be able to transfer some of that covenant in the same way that we just talked about. Great.

Paul, do you have any questions?

You know, this has been a fascinating discussion, and I feel like I've absorbed so much information. Thank you all for all that you said. No, I don't. The one thing I thought was, what is the first step? I mean, really, what are our first steps in success? uh i guess essentially you know it'd be being you maybe having you know the the uh fourth avenue tavern building eight units 12 units 12 units yeah and uh and then i the thing that i was thinking about and this is very kind of nuts and bolts and kind of at a much lower level than this discussion is taking place but Of those 12 units, only four of them want to retain a co-op relationship. So it's really a matter of recruiting other members of the co-op. And I just wonder, are there people chomping at the bit to join? This is something...

order to have a successful program you obviously have to have people that want to participate and so this was something i was just thinking of as this entire discussion was going on well in victoria and you all working statewide i feel like can speak to this better than i can my impression though is that people are chomping at the bit for having affordable opportunities And especially, I feel like around this table, we may represent different generations that our idea of ownership looks differently. And I feel like especially younger people who are seeing this ecosystem we have and think that ownership is not available to them at all. They may qualify for a mortgage and there is nothing available for them. So I feel like people are starting to be open to other kinds of models than what we all may have traditionally been used to. And again, Victoria and Anne, I feel like you have statewide and much more experience than I do.

So I would say that you always have your early adopters. So I would argue that those four are what I would call early adopters. They love the concept, they're willing, they're interested, yada, yada, yada. The vast majority of people, especially when it comes to something that is as permanent and as expensive as homeowner, want to think about it. They want to see it. They want to see what does it actually look like. And so this is where that education comes in. And you may find that there are going to be more individuals in a property who want to pursue the co-op model once they understand what it is. once they see it in action, once they understand what responsibilities are, what freedoms they have, and just how flexible it is. Now, keep in mind, if it is currently affordable, as in naturally occurring affordability, it's entirely possible that the people that you have there are people who aren't interested in being permanently in Olympia right now, that this is part of their journey. And later on, they may want to come back. But there are going to be other people who aren't in these structures now who would want the opportunity to buy in. Basically, I think it's a historic building too. So you got that on top of the list. And don't get me wrong. I love rehabbing, but I go into it with my eyes wide open. But don't ever be discouraged because there doesn't appear to be a lot of very gung-ho people. A lot of very gung-ho people sometimes terrify me because they are very idealistic in some areas. And then when it comes down to the actual enactment, they get very disappointed and that is challenging to manage. I am much more interested in the people who are curious. They're curious in exploring it. I love my early adopters, but they help wet the whistle of the people who are curious. And it's exposure, it's education, it's constantly showing up. and answering all sorts of questions. And Victoria, you can totally speak about the whole question cycle way past what I can hear.

So, Anne, you're completely right. The first person, the gung-ho person turns out to be the worst board president we've ever met because they roll themselves into some weird dictatorship that happens. So Anne is completely right. And I'm like, i can walk into a group of a resident meeting 100 people in the crowd i can tell you who's going to be the worst board member i can tell you who's going to be the best board member i can tell you who's skeptical about the whole thing i can tell you what he needs to hear to get himself on board and then like i literally will point at him and be like see it's okay i got you and so like I've done this 20 times. And so we're pretty super skilled in this experience here. One thing to note, though, we know that at that first meeting with the residents, when we give them the opportunity, like, here's what you got, which typically takes about two hours. Sometimes we have to go back and say it again because that one resident got really loud and didn't hear the whole thing and created rumor and chaos. So I'm literally printing a flyer because I remembered that I needed to print the flyer. I have to go back and talk to these people again. But at that first meeting, we're looking for 51%. That's it. We're looking for 51%. And if we can get 51% of that first meeting that say, I like this idea. I'm curious about this idea. Not here's my $20. I'm good to go. But I'm very curious. I like it. If we can get 51% of that first meeting, we know that over the next three or four months that we will have 80%. which is what we require at the time before closure. We require that 80% of the property is a yes and that they want to do it because that is going to create a successful business. A co-op is a business. I need it to be successful. We all need it to be successful. They need it to be successful. I need it to be successful. You're going to need it to be successful. So we want it to be set up from success from the beginning. If we don't hit those metrics, we do not move forward. So you asked earlier about how often is this successful? If we go to that first resident meeting, and it is a total bust. It does not work. The whole concept does not land. People are not into the idea. We actually rescind contract. And we've rescinded that contract more frequently in the past year than we ever have before. That, in my opinion, is largely due to the political climate. And it's not necessarily a reflection of like the model is bad, but our political climate is different. And so it just, it's a different conversation out there right now. I think Rebecca's right. People do want this. There are especially people in urban core are very interested in alternative forms of living, alternative forms of homeownership. The residents that I met with at the building in Spokane, they were, So excited, so excited to be able to have an opportunity to better their lives, to improve their building. They're like, wait, we can put furniture back into our shared living space. Like, yeah, I don't know why you got it removed in the first place, but we can put furniture back here. They're like, can we get bike storage in the basement? I'm like, sure, that's really simple. Like, yes, I can work that into the budget for you. But those are the things that mattered to them. And when they saw that they had an opportunity

to do that they were so excited and jumped right into the process thank you well thank you i uh i'm really interested in just how this gets up and up and running and uh that was very helpful to me well i guess to that point you know this our next steps how are we feeling as staff staff

I feel like we got a lot of helpful information. We have a lot to chew on. We have great subject matter experts here to give us some guidance, but I think as far as direction, how do you want staff to move forward in looking at a policy or a pilot or what else can we do for you to move forward at this point? Are you interested in moving forward on either one?

I don't claim to have any real expertise on this, but I'm not sure that you need a policy, but we can pass one in order to proceed.

If we need to pass a policy or ordinance to help create the structure around a pilot, perhaps I'm supportive of that. How are you feeling, Clark?

What I believe the principal purpose of the policy is to create the required notification and to have us serve as a body to hold those notifications so that that is the opportunity to purchase is to be first notified that the property is going for sale and have some window to try to organize yourselves and pull together funding. So that's why I think there's value in the policy. And I wonder if the next step is... something before drafting the policy or if there's capacity within the staff team to give us a picture of what a program might look like in terms of staffing, in terms of education and online resources. What would it take to have a municipal tenant and community opportunity to purchase a program running at the city? Because we've got some more information tonight about what the work would be on the city's part to run something like that. I'm very interested in pursuing this, and I feel like it could really... both boost our home ownership or our affordable housing and home ownership goals, and also help to boost the taking land out of appreciation, the land trust sort of model. Both of those community goals are boosted by an effort like this. So that's why I would support us working towards the policy.

Thank you, Claire.

I, and this is just thinking out loud, really, I'm not sure that the city needs to hire any staff to do this because you're doing, you're doing this and, you know, Victoria's doing it. There are people doing this, but would a resource like that be helpful to you, a city staff?

you know i i just uh it's the notification it's the third party i think yeah the notification because i feel like so this for that tab building i feel like is a great example right like i'm curious like i learned about it sort of randomly online do those tenants know that their building is for sale yeah it's it's i looked and it's not on crexie which is where you put

listings. And so I got you what you noticed is Rebecca, but no, they do not know.

It's on loop.net or whatever that one's called.

Oh, it's on loop.net. Okay.

I feel like the land trust, you know, we're here as a resource so that, you know, and again, if it was like that, we, if we knew, and then we had the opportunity to purchase, or if the tenants knew and they knew, they knew that a land trust existed and that they contacted us and said, can, is there a way we can do this together? But I do think that to not have any kind of policy, then the individual owners of these buildings, they're not necessarily going to reach out and make these notifications.

Notification framework, right? Because people don't know. And that's also why the education is very important too. And I know that may be something that other resources could do, but as a city, and tells people where to go and this and that. Because I think it's been made a few times that, you know, tenants won't know how commercial property works in that sense, right? And brought up. I wouldn't know and I bought a home last year, right?

So... Well, and I do see value in having someone... Again, it falls back to the making of a successful project. Having someone that... is making sure all of those units are filled when we're at 60 percent that want to want to participate and we have 40 percent not that 40 percent is still going to be successful to the success of the project so what kind of volume are you talking about if um you have a picture of the volume of the properties that would be subject to whatever policy

If 30% of that volume all came online at the same time, would existing city resources be able to handle that level of notification? I mean, I'm thinking about fiscal notes. When we do fiscal notes, my team is already fully employed. So if they want us to do something else, I need more people because they're already full up. So I don't know what your workload looks like at the city. I don't know how the ebbs and flows work. So I would look at what is your expected world of the properties that would be subject to this, and then think about what would happen if at a minimum 30% came online all at the same time, then what?

That's a good point.

Well, I believe maybe an incremental ordinance is in order. I don't know that we need to go full full on, but a step in the right direction, I think is in order.

I also think we should let staff chew on it a little, without all the information in front of them, and then come back with some options, I guess, and consider what's in front of us, particularly making sure that we can handle the budget and everything else.

If it's just said to come back to a July 23rd meeting,

Okay.

So it's pretty tight.

I mean, we can debrief and come back with some next steps.

Do you have any thoughts on this? Well, I just think, you know, I think we just need to start small. I'd like to sit down and talk about all the ideas we've heard today, but we just need to be careful advancing the program. Obviously, staff, you're talking about our challenging funding situation right now, adding staff and we need to assign how we pay for that. That's a J conversation. But certainly what I'd like to do is get together and kind of call ideas we've heard today. Maybe come back on the 23rd is continuing the conversation on how we'd like to proceed. And right now it's shown as a recommendation, but that's maybe a next step after that. Okay. Give us a chance to kind of regroup and come back to you. Make sure we have the capacity. Yeah. Cool. And how much we can take on with existing staff. At what point do we need, if you want to advance it further, then what does that look like?

What can we do with no staff?

Right. There's several alternatives. All right.

Just keep in mind, even with no staff, it's going to impact your IT teams. Just so you're aware.

Thank you. Well, I want to thank you all for coming out and spending two hours on your Thursday afternoon and, uh, chat with us about allowing us to pick your brains about this process. And I really, I really do appreciate it.

I loved it. I took lots of notes and learned lots too. So thank you for convening the space and being interested.

Well, and on that note, um, starting next month is when the competitive funding round for the housing trust fund opens. There are a number of use-specific webinars that are scheduled as well as in-person roundtables. And the application cycle starts in July and ends in early September. So I strongly recommend checking that out for whatever your goals are. Yes, yes, yes, yes.

Anne, what's the cap that I can put on that HTF application?

It depends on what you are seeking funding for.

I was for 4,000 tasks and I need north of a million.

Well, for the 4,000 tab, I'm going to tell you right now, I'm going to want a environmental assessment done on it because budget on the purchase and rehab of that is going to need to include remediation and upgrades. And I am absolutely 100% in support, but that's a pretty fast turnaround time for that kind of information.

So soundproofing.

That is not technically a requirement. Lead-based paint and asbestos remediation is a requirement, as is current building code.

I don't think we can afford it.

Yeah, probably. I don't know what your building code is.

Well, it does for new units. So technically, if it's existing units, it probably wouldn't.

But if I if I may, this was the challenge we had with the apartments over the Columbia Street was that they were like 600 bucks a month. That was great. SRO sort of units shared bath. And the challenge was when the property changed hands, that it couldn't stay that level of sort of amenity in that in that condition. And so without that, the sort of public subsidy that Victoria was describing going in initially as sort of a down payment, It was just, it was going to, it just, it did. It costs more for those apartments now. So that's the challenge of the building's pretty cheap. 12 units paying a grand each would cover, you know, principal and interest, except that we need to spend the price of the building another time or two to bring it up to code. And then anyhow, that's the challenge with trying to preserve old SRO kind of buildings.

And you actually just touched on a conversation that I had yet again today, which is always be wary of free property, free buildings, or reduced priced ones, because that usually means there's some underlying issue that is crazy expensive to deal with.

Well, I'm going to turn the meeting. Unless you guys have time. Thank you. Thank you.

Thanks, everyone.

Thank you, guys.

Thank you, Victoria.

Yep, thanks.