Credit enhancement for affordable housing in SeaTac announced
King County Executive Ron Sims announced approval of the first project to use the County's newest housing financing tool, the affordable housing credit enhancement. The County will provide credit enhancement for $10.65 million in bond financing, resulting in rehabilitation of 326 affordable apartment units in SeaTac. Forty of the units will have very low rents; the number of these low-cost apartments is expected to increase to 60 over the next ten years.

The project, Continental Court/Sunset Village, consists of two adjacent apartment complexes containing 326 apartments located near SeaTac International Airport. Private developers had considered either demolishing the buildings or converting to extended stay suites. The King County Housing Authority has acquired the properties and is making substantial improvements to the site and housing units.

King County's credit enhancement reduces project-borrowing costs, which will allow the Housing Authority to reduce rents and finance the extensive rehabilitation. Forty apartments will be affordable to households at 30% of the County median income, or $14,150 for a two-person household. As project reserves increase over time, a total of 60 low-cost units will be available. The remainder of the units will be affordable for households at 45% of median income, or $21,240 for a two-person household.

"I am very pleased to support this important housing project," said King County Executive Ron Sims. "The King County Housing Authority will preserve 326 housing units that would have been lost to redevelopment and improve the living environment for more than 750 residents. The rent levels will be affordable to the many moderate-income workers in SeaTac's urban center."

The Credit Enhancement Program was approved by the King County Council in April of this year. It authorized contingent loan agreements with housing developers that provide affordable units within their projects. In the agreement, King County commits to loan funds to cover a shortfall in the project's mortgage or bond payments in the event that the project runs into cash flow problems. Once the project is stabilized, this loan is repaid. The County's commitment has the effect of lowering the project's debt service, which in turn provides affordability to housing residents.

"The Continental Court/Sunset Village project will provide affordable workforce housing close to jobs and transportation," said County Councilmember Cynthia Sullivan, who sponsored the Credit Enhancement Ordinance. "The credit enhancement program is helping us to meet both our housing and growth management goals."

"This property accounts for approximately one-tenth the multifamily housing of the City of SeaTac," said SeaTac Mayor Terry Anderson. "The loss of this housing, at a time when the housing market is so tight, would have created a tremendous hardship for the residents. We are very happy that the housing will be preserved and improved."

The $22 million Continental Court/Sunset Village project is using a range of funding sources to support acquisition and rehabilitation. Over $7.6 million in private equity investment was secured through the sale of federal low income housing tax credits awarded by the Washington State Housing Finance Commission. The project also received grants from King County and the State Housing Trust Fund. A grant from the City of SeaTac is pending.

"The King County Housing Authority is committed to investing in difficult projects that preserve and upgrade deteriorated housing," said Stephen Norman, Executive Director of the King County Housing Authority. "At Continental Court/Sunset Village we are providing high quality, affordable housing for the residents and helping the City of SeaTac by improving a large, centrally located property."