Bridging The Gap In Home Affordability

By Mauri Ingram, President  & CEO of Whatcom Community Foundation

IN THEIR April 25 and May 23  Cascadia Weekly opinion pieces, Sarah Bond-Yancey of Habitat for Humanity of Whatcom County (Habitat) and Dean Fearing of Kulshan Community Land Trust (KulshanCLT) shared perspectives on Whatcom County’s dire affordable housing situation and ways their organizations are working to address it. They highlighted the many ways that family and community potential are stifled by the severe shortage of affordable housing in our communities: increased risk of health problems and job insecurity and, for children, poor academic performance and behavioral challenges, among many others.

In the nonprofit world, we throw around a lot of statistics. Data helps us identify and, to some extent, understand community challenges. And it can be meaningless without explanation and context. For example, housing affordability is often discussed in terms of Area Median Income (AMI): What is the AMI in Whatcom County? Whatcom County’s AMI for a four-person household is $54,650. In order to afford other basics like food and clothing, you should spend no more than 30 percent of your income on housing. If you earn the AMI, you could spend as much as $1,500 per month on rent or a mortgage. KulshanCLT clients earn up to 80 percent of AMI. That means spending no more than $1,100 on housing. Habitat’s homeowners earn between 30 and 60 percent of AMI, allowing between $409 and $820 per month on housing, respectively. Average rent in Bellingham is approximately $1,200 per month. The vacancy rate in the rental market is less than 1 percent.

The high cost of housing in Whatcom County puts intense pressure on the limited affordable housing that does exist. To relieve that pressure, Habitat and KulshanCLT have been adding permanently affordable housing to the community for years, a few houses at a time. Both organizations have passionate, dedicated volunteers and an abundance of demand for their valuable services, particularly in the current housing market. What’s missing? It’s the money to go from few to many at a faster pace. It takes more than information to successfully tackle complex issues like affordable housing. That’s where the creativity, resourcefulness and collaborative nature of local nonprofits come in. Habitat and KulshanCLT combine their unique expertise, resources and shared goals to put more families—more of our neighbors—into homes that will literally transform their lives. Thanks to their ingenuity and partnership, Whatcom County is launching a solution to a nationwide problem. The Threshold Fund at the Whatcom Community Foundation is the brainchild of John Moon and Dean Fearing, the executive directors of Habitat and KulshanCLT. They brought the idea for the fund, a revolving loan guaranty fund, to the Whatcom Community Foundation. Their message: “We have an idea for a way to build more affordable housing for less money, and we want the Community Foundation to help make it happen.”

The Threshold Fund is designed to do three simple, powerful things:

• Exponentially accelerate the number of affordable homes Habitat and KulshanCLT can bring to market—from two to three per year, on average, to more than 50 over a few years.

• Reduce the cost of borrowing for construction loans for Habitat, KulshanCLT, and other affordable housing providers. That means more families in safe, stable homes and able to fulfill their potential.

• Create a reusable pool of funding so that more permanently affordable homes can be built in the future—called financial recycling.

Together, we are working to raise $5 million so the Threshold Fund can back multiple affordable housing projects at the same time. That will help us catch up with demand. It will ensure Whatcom County has permanently affordable homes for more of the people working hard to contribute to the local economy while they build lives for their families.

The Community Foundation has been making grants to nonprofit partners for more than 20 years. Those organizations put that money to work making life here better for everyone. Grant funding is important and valuable. Rethinking what we do and the way we do it is also important. Ideas like the Threshold Fund make it possible to put our financial assets to work in new ways. In this case, those assets will go to work over and over again.

The Community Foundation is working toward a vision: Everyone who lives here thrives. Habitat and KulshanCLT are working with us to make that happen.

Editor’s Note:  This article first appeared in June 13, 2018 addition of Cascadia Weekly