As housing needs and rents increase, state-funded housing providers grapple with rising operating costs, safety and security needs, lack of supportive services for residents, and more.
OLYMPIA, WA — The Washington State Department of Commerce and Washington State Housing Finance Commission recently released a final report on efforts to stabilize rents for tenants in state-funded affordable housing. The report is set against a backdrop in which over a quarter of a million Washington state residents are severely rent burdened – paying at least half of their
income on rent – while the state faces an estimated need for more than a million new homes in the next 20 years to meet housing demand at all income levels.The final report, required by the Washington Legislature, highlights ongoing challenges identified in the 2023 interim report and offers draft strategies to mitigate the rent burden on residents of state-funded housing. This includes housing financed through the Washington State Housing Trust Fund, administered by Commerce, and federally financed Low Income Housing Tax Credit (LIHTC) housing administered by the Housing Finance Commission.
A key finding in the report shows that 43% of residents in Housing Trust Fund-funded units and 56% of residents in Commission-financed Low-Income Housing Tax Credit (LIHTC) units did not receive rental assistance in 2023. Among these households, 43% and 65%, respectively experienced rent burden during the same year.
The percentage of all Washingtonians experiencing rent burden (paying at least 30% of income on rent) continues to grow, jumping above 50% in 2023, as communities statewide struggle to address the lack of housing units which is increasing making housing unaffordable for many.
Of the estimated 1.1 million new homes needed in Washington by 2044, 400,000 must be affordable for households at zero to 50% of Area Median Income (AMI), with 122,000 of those being permanent supportive housing.
“We are committed to ensuring that housing projects funded with state investments are affordable to the target populations these projects are intended to serve,” said Interim Commerce Director Diane Klontz. “This work is part of our collective, overarching commitment to advancing housing justice, addressing systemic inequities, and promoting long-term solutions to the housing crisis.”
Continued challenges highlighted in the report include:
- Increased operating costs – up 80% over a three-year period
- Decreased rent collections – 60-90% vs. pre-pandemic levels of 95-100%
- Safety and security needs
- Housing mismatch – lack of options for people needing permanent supportive housing or housing with services and rental assistance
- Affordability issues- mismatch between what low-income residents can afford to pay for housing and the rents set based on Area Median Incomes, creating rent burden.
In looking at rent stabilization strategies, Commerce and the Commission used a set of shared values:
- Housing stability is an essential foundation for people to thrive.
- The financial health of rent-restricted properties is necessary to ensure the physical maintenance of buildings.
- Resources to fund the operations, maintenance and services associated with managing affordable housing properties is too limited.
- Low-income residents need predictable and manageable rent increases to maintain housing stability.
“These values are often in conflict with each other, so we must find a balance that promotes the long-term stability and well-being of both residents and the properties they live in,” said Steve Walker, executive director of the Housing Finance Commission. “This is the challenge we face as we head into 2025 with a continued housing shortage.”
The report identified some potential mitigations for the rent burden experienced by affordable housing residents and determined that more research and community engagement are necessary to determine a path forward.
Draft strategy proposals include:
- Lease-related strategies
- Limit frequency of rent increases
- Incentives and policies
- Incentivize underwriting rents below AMI unit target percentage
- Adjust the unit set-aside matrix in the allocation process
- Supports
- Resident-centered best practices toolkit and technical assistance for owners and property managers
- Increase the availability of rental assistance and/or operating and maintenance funds
Read the final report: Stabilizing Rents for Tenants in State-funded Affordable Housing (PDF)
Seeking insights from those most affected, Commerce and the Commission contracted with The Athena Group to conduct listening sessions with interested parties including residents of affordable housing, advocacy groups, and property owners and managers.
Read about community insights: Key Insights from Rent Stabilization Listening Sessions to Shape Equitable Housing (PDF).
The agencies are committed to continuing their work together and engaging community partners to refine and guide strategies to address rent burden for residents of state-funded affordable housing properties.
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