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Good morning and good morning everyone welcome committee members staff presenters

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and all who are watching live from TVW to the September 17th Senate housing

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committee meeting we have a full agenda of presentters today for our work

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session on affordable housing production and financing we're going to start with

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a discussion on housing, production gaps and development trends followed by an

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For on the starter home demonstration program, then we will finish with presentations on housing

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affordability trends and financing issues. So I would like to begin and welcome our first presenter,

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Matthew Gardner, who will be joining us virtually from principal and chief economist,

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Gardner Economics, to give us an overview of Washington State housing production trends.

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Good morning, Matthew. Are you there?

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I am. Can you hear me?

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We can, well, we can see your presentation,

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which is, I think, what we would like to see.

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So welcome, and go ahead and get started.

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Far better than seeing me, sir.

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Come on, Chairman, members of the committee,

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thank you for the opportunity to speak today.

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Washington's housing affordability crisis,

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it's fundamentally a supply-side problem

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compounded by cost and delays

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in both nominal and real terms.

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Home price about pasting comes for more than two decades,

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nearly half.

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of Washington's renters are cost-burdened and homeownership has slipped out of the reach

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in almost every county and certainly in every major city in the state. Today I want to be

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expanding on a few the slides that I recently presented at the Association of

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Washington Cities annual conference. Next slide please. As you all know,

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Washington needs roughly 1 to 1.1 million new homes over the next 20 years, about

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We're not hitting that mark.

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Our FM data shows permits peaking in 2022,

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but falling since with a cumulative decline of 31%.

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Next slide, please.

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Now, shown here, completions kept climbing through 2024,

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which is serious high of over 53,000 that year,

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even as permits issued that same year

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had already fallen to just over 40, 000.

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Now that's not a contradiction.

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It's a 2021 and 2022 permit surge, finally landing the finished homes on a like primarily

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seen in the multi-family sector, meaning that today's relatively solid completion numbers

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are largely an echo of permitting from three years ago and not evidence that the pipeline

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today is healthy. Demilitations you see in yellow add a further but quieter drag.

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demolish units equal about 6.7% of completions, so the net housing stock consistently runs

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below gross completions. Now, it is important to note that net production of housing units

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has only cleared that 50,000 mark once since 1919. Next slide, please.

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However, the single-family share of total permits has fallen from about 48.7 percent

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in the 1990s to 41.5 percent today, and that's shrinking exactly the product most first-time

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buyers prefer, even as accessory-dwelling permits, a genuine reform success story grew

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On average, 5,500 permits do not become starts in any one year, while around 9% of permits

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are delayed or abandoned.

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Now, there's several reasons that can cause a project to be delayed, or indeed abandoned

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completely, and I've outlined some of them here.

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Firstly, permits can expire,

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and one can infer that some have the permitted but not completed gap is stalled constructions.

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It's permits that have lapped outright.

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Two, the math stops working. If costs and or revenue expectations increase or the permit

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sits in review, a project can go from profitable to underwater before a shovel has ever hit

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the ground.

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Third, litigation. It's a real issue. Even though an underlying permit was validly issued,

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for pre-development activity is insufficient.

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Now, if the market calls during the permitting process,

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a project may never break round.

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Now this is specifically true in the multi-family arena.

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Five site conditions, geotechnical problems,

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wetland, critical area findings, contamination,

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anything that arises during final engineering

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or preconstruction that can cause a delay

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or possible abandonment.

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And finally, the vested rights doctrine.

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Developers had a rational incentive to apply for permits before any anticipated code changes

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or rezoning is implemented that could harm their development, allowing them to secure more

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favorable terms in essence, even if they don't yet have firm plans or financing to build immediately.

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So as you can clearly see, the challenges that our states builders face are significant.

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although housing production is heavily concentrated in the central Puget Sound.

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The other 36 counties within our state face issues with housing supply, affordability and

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under-production.

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And there are numerous forces impacting housing and I've outlined some of them here that

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include staffing shortfalls, infrastructure constraints, a lack of workforce-priced

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housing, and a decline in manufactured housing production.

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These are all real issues that face our county's leaders.

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Now, my latest housing affordability index suggested a household making account is median

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income was able to afford to purchase a median priced house in just five counties in our

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state in the second quarter of this year.

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Next slide, please.

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And when we make modest adjustments to incomes, home prices and down payments, a first-time

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buyer was only able technically afford buy a home in one county, Garfield.

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Next, slide please

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Although I certainly appreciate the efforts to be made by both the House and Senate in

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passing significant legislation to try and address the crisis that we face, I believe

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that more can and should be done.

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Now, some of the recommendations you see here do overlap with those put forward by the

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state's several building associations, but I hope that they may still stimulate additional

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discussion.

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Now, a permit freeze. A freeze of this length carries real trade-offs in climate-goal alignment,

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insurance ratings, construction, defect exposure that make it important for the legislature

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to weigh explicitly rather than to treat them as simply costless.

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However...

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If a total freeze is not palatable, then the legislature should at least set a predictable

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cost-disclosed cadence for code updates. The Energy Code alone accounts for over a third

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of states' entire regulatory cost premium over other states. A decade-long freeze on the

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Washington has had a state surplus property program in place since 1993 and is brought

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in again in 2023, so the mechanism exists, but the record doesn't.

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Our thought should be made to pairing the existing statute with a dedicated matching grant fund.

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You can model this on California's comparable program and a statutory disposal timeline.

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Here's why I think we've got some fairly low hanging fruit.

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We also look at piloting a taxable revolving construction loan fund to link construction

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capital at below market rates.

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Now, unlike the state's tax exempt bond program, taxable debt is not bound by federal income

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restriction rules.

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Now that lets this tool reach out into the conventional multifamily world.

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That's where most of the State's unit gap exists, and not just income restricted deals.

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Now of note is the change in the test for eligibility means that right now there will

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be more projects chasing the same scarce bond volume cap.

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Now there's a way I think we could certainly push that forward.

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Next slide please. A dedicated targeted capital funding with conditions to water,

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sewer, road capacity as well in high growth rural counties.

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Let's say House Bill 2269 we know manages that part of the wastewater program this funding might

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otherwise need to address and that allows the capital program to focus on where it's actually

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needed. Warner systems which GMA treats far more permissively than the sewer and road capacity broadly

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State law already lets counties expand UGA's

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when buildable lands reviews show insufficient capacity.

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The process is slow and it's litigation prone.

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And the law's own default response to capacity shortfall,

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where it is more intensive use

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within the existing boundaries itself,

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not an expansion of them.

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And for counties that have already demonstrated a shortfall

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even after fall within boundary measures,

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I think the legislature should reduce growth management hearing board exposure and set

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a faster decision timeline, preparing any expansion with a TDR rights requirement, and

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that could offset the loss of resource land.

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In addition to this, we would be rewriting the burnable lands analysis, which in my opinion

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is fatally flawed.

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Next slide, please.

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But for example, if House Bill 1491's set-aside requirement ends up quietly suppressing production

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and not encouraging it, when it shows up in the data within a couple of years,

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rather than only becoming visible once or any once, and also could be in place for a decade.

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So the recommendation is to look closely and watch what's actually happening.

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Not that it's already a problem, but we really need to, I think, keep a better tab.

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on how these laws are being implemented if they are

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being implicated at all, relative to zoning changes.

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And that's the end of my slides. Senators, Washington's housing shortage,

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it's a production problem, not a demand problem.

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Production is being constrained on two fronts concurrently,

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cost and time. Both have worsened over the past five years,

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even as the state's own housing need assessments have grown.

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and both sit within the legislation's direct control in ways population growth and interest rates do

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not. The reforms I've shared with you would address the supply side of this crisis directly

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at every stage from land availability, through permitting, to construction and in most cases

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echo what the state's building industry has already asked the legislature to do.

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Thank you so much Matthew for that illuminating and alarming presentation that you've shared with us

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We have other house or Senate members of the housing committee that are here virtually

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And for those of you that would like to ask a question

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I'll just ask that. You raise your hand so that we can see you and we will call on you first

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I have on the screen senator Solomon followed by senator Gildon

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Thank You Matthew that was

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a lot in there and create it very fast. You mentioned one thing that was working.

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You'd mentioned the number 2000. Can you mention that again? I didn't catch it.

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I'm sorry. Well, you said there was one bright spot. Oh, yes. Right now, if you look at ADUs.

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So, accessory dwelling units. And those are something here.

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relatively recent, but we've really seen that take off very significantly, mainly in King

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and Snowish counties. But we have seen permit applications rise very, very dramatically

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in that one particular sector.

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And did you say about 2,000 applications?

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Just over 2.000 state, yes. Am I not sound like a lot, it's up from three in 2010.

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Amazing.

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Thank you, Madam Chair. Mr. Brother, thank you for the presentation. There was a lot,

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I wish we could have spent a whole hour on your presentation and go through the details.

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Of your recommendations, I'm curious, which of the recommendations do you believe would

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have the most effect on increasing supply in Washington State?

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Permit speed and predictability. I think for a

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lot of people, don't you understand what we're going to get?

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The understanding that for a builder, the interest rate clock starts well before a shovels

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put in the dirt, and so as time goes on the interests of crews and all the builder can

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really do is put that on to the end unit price.

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And so, if we can get speedier permit applications approved,

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if you can actually get some,

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if it could not change permitting halfway through the process,

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that is something which I know would certainly help

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a builder's because that does not put on this plan

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to do one thing, it's build housing.

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They're not, I don't think it requires them.

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Commons for the doctorate to tell you all that if they're not building, there's a reason why they

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are not built in. And most of it today is based around cost. They know how much it's going to

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cost them to build a house. However, if the market cannot accept that, we're talking about market

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rate products specifically, they won't build it. It doesn't mean they aren't going build

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it down to the goodness of their hearts. So the more we can make permitting predictable

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and speedy for them, that is the way I believe we could make an immediate impact.

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Thank you. Senator Alvarado.

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Thank You. And thank you for this presentation. I appreciate that you're focusing on what

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Washington can do. It would be helpful though if you can spend a minute or two and talk about

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some of the broader headwinds that are facing housing development.

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Because we have done a significant amount of regulatory reform in the legislature over the

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last few years, and we are not seeing the outcomes of that. So, to fire us to do more,

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if you could talk a little bit about...

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There are some factors, including high interest rates, you know,

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war overseas is driving the cost of construction,

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significantly impacting labor.

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We do know that Seattle in particular, but across the state,

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because of the housing boom in the 2000s,

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was having a vacancy rate and a softening in rent

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causes investors to not see a lot of rent growth.

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Therefore, they throttle on investment.

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So can you talk a little bit about those broader level trends

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and why in sight of the fact that we might not

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see the fruits of our labor, we should continue

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to make these regulatory changes?

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Thank you.

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Well, thank you, Senator. Great question. And you are right. The best I can describe it would be

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for a builder. There are four cost centres, they worry about. That's what goes into

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build a home. One, land. Two, labour. Three, regulations, and four materials. Let's run through

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them very quickly, Land. 3.7% of the state's total land is within the UGA, that we know.

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And so, where we live it land, what does that do?

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Well, by the very nature of it, it's going to push up land values.

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And you mentioned Seattle specifically.

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Well Seattle, quite frankly, is suffering from a decision.

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It made in 1924.

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It was the first comprehensive plan.

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So what you've done is you really built out the city.

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And, so there is very little land.

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In order to build or on an up zone,

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what can you do is, you have to tear down what's there.

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to replace it. Well, you're paying retail for the land value. That's, again, one example.

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So, land is expensive. Labour, as you absolutely have directly mentioned, a lot of our construction

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labour is, I mean, from the immigrant labour, and a lotta builders have been telling me that

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they've got crews not arriving, not showing up, because they're worried that ice might be there,

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even though those crews are totally permitted and allowed to work in the United States.

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Again, as mentioned, because I've lost a lot of other things, I'm looking at PVC pipe right now.

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The reason being is that pipe perfectly correlates to oil prices, and so we've seen a big jump in

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that copper steel aluminum tariffs lumber. The Canadian software lumber tariff is still in place.

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So all these type of effects come into play. And finally, is the regulatory burden.

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Now, Counties do vary fairly dramatically in that respect, but it is still a lot of money

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to get upon it. So, what a build would do. Those are four things. Look at those four costs.

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He knows interest rates are higher now than they were.

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It's very true. They've also got to have some skin in the game. You can borrow 62, 63% of total

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costs. So they're just being far more cautious today than they ever have been. And so those four

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corners are there. Yes, the legislature should be applauding because they have a lot of new laws

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on the books to try and help. But especially today, as you mentioned about interest rates and

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mortgage rates, when you've got the yield on 10-year treasure, it's now knocking on 5%. That

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That's going to be very hard to equate what a builder would need to sell or rent for

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relative to incomes. So yes, we've even seen incomes rising, but the offset's not there.

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And quite frankly, going forward, I expect the terminal rate, let's say on the 30-year

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mortgage, probably going around 6%. So we're not going

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to see the days of sub-3% financing again for a mortgage.

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So, yes you've done a lot.

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I think it's not what can be done and also implementing some of the laws, as I mentioned

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earlier, in my comments, that you have put in place. Because if we don't do that,

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we're going to have a big problem in terms of attracting businesses to move to our state.

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Thank you for that. Do I see a follow-up question, Senator Laddo?

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Thank, thank you so much, Chair Beitman. And thank

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quick answer to all of the opinions that I saw and I mean, which I talked to you quickly.

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No, it's great. Thank you. One last thing. Can you touch a little bit about the

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kind of cyclical nature of development in general as projects get built and there becomes

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supply expansion, it takes time to fill units. And during those time, investors are not seeing

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as much growth and predictability, so they might throttle. Can you talk a little bit about that?

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Because you know there was absorption post 2020 boom.

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Right. Anyway, if you imagine supply and demand on a line over time really being offsetting

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let's say today, it's going to take time for the supply to catch up with it, so you are always

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playing catch-up. We also fully understand that it works in cycles and it is the economic cycle,

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the next expectation at some point, if we're not starting soon, and we are going

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to have a turn down in the economy and that will come into place. So it really is a timing

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factor as much as anything else. The oversupply of apartments that you mentioned, again very accurately,

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You have to go back to the financial crisis, as we were coming out of it, the only money

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you could borrow, which would build apartments, it wasn't condominiums, certainly, and not

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really a single family.

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So the world became an apartment developer, but the lag is significant.

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So because of that, we had a boom in apartment development occurring, you're quite right,

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so supply, exceeded demand, rents were compressed, so we've already started to see...

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major slowdown in permitting of multifamily buildings, which

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allows that supply distance by the catch up. And then we'll see

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again. So really, it is that sign curve. Thank you. More than

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anything else, I'd say that's the reason behind it.

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Thank you so much, and I know you could talk to us

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for a lot longer, Matthew,

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and we appreciate your conciseness

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because of the work before the committee.

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We only have so many time,

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but I do encourage committee members to reach out to Matthew

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if they have additional questions.

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I think that my office will be doing that,

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so thank you for joining us,

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thank for the valuable information,

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and the presentation is available in our CAP system.

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Now I'd like to move, thank, you.

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We'll move on to a panel on development perspectives.

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I'm gonna invite the next panel,

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in person to come up, that way we can switch from person

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to person in a timely fashion.

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So we have Andrea Smiley, legislative director

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from the Building Industry Association of Washington.

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We also have Dylan Slaughter, Slooter,

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State Policy Manager, Master Builders Association

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of King and Snohomish County, and we

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have Ryan Donahue, Vice President of Advocacy

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for Habitat for Humanity, Seattle, King,

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and Kiditas Counties.

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Good morning, Andrea, would you like to start? Sure.

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Good morning, Andrea Smiley here on behalf of the Building Industry Association of Washington.

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As many of you may know, we represent the residential construction industry. We have about 8,300 members

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and about 150,000 workers across the state. I will say over the last seven years of my career

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and thousands of conversations I've had with experts both in the field, academic and

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economist, everything and also to kind of echo what Matthew Gardner just said,

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how if we want housing affordability we must start with with increasing access to

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buildable land and a lot of what Matthew had said is very correct the 3.7% of

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our land being in the UGA is really where we're seeing the

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the issues come to the forefront. Right now, our state is expecting that all of our growth is

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going to be put into those urban growth areas. However, housing often competes with other interests

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such as critical areas, office, commercial, industrial, all the things that make, you know,

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And so the result is less buildable land, fewer housing units, and more and higher housing prices.

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And, so, there is a common misconception that vacant land means that it's build-able.

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Kind of following in the same theme as Matthew Gardner, a lot of our members tell us that

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the remaining land is too expensive to develop.

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more plentiful than not that they are essentially lots that are unable to be

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developed and that takes away from the amount of billable and

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that is available. And so there's really two types of like land segments that I

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would kind of put development in. There's a permit ready lot or a not permit

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ready law and the major difference there is that you don't really have to deal

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that you know come with a not permitted or not permit ready lot and so when you

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can as much as possible get the land that's already has everything that

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you need and really at the end of the day all you needed a building permit that

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is the best scenario and I will say that it is also the lowest amount of time

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that takes to complete the project whereas it's the Project Permits that

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the delay and ad cost. Again, that's the approvals, the utilities, roads, everything that you need

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in order to build a house and have the person be able to live in it. And so I wanted to kind of

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show a report from our National Association of Home Builders that basically reiterates what

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we've been hearing across the state where, and I just kind highlighted those, I won't go through

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the real bottleneck in permitting is tied to land.

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And, sorry, here we go.

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The areas of opportunity.

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So for permit ready.

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Pauseing the residential energy code would do a lot.

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This last session we had recommended a 10-year pause.

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We've been stakeholdering that for the last, I would say,

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two to three months and have come up with a new idea of allowing

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the next energy to go into effect.

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And essentially after that happens, you pause it and let builders

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build for essentially two cycles or six years.

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And the idea is to have a period of stability where

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You can just kind of bang out production as fast as possible and then

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Secondarily to that establishing an annual cap on impact and development fees similar to rent control

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You got to really make the cost inputs predictable

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And then clarifying permitting authority for state and local governments. I think that there's an huge issue right now with state agencies

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and special-purpose districts feeling like they have

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I guess, more power over the decision-making process than they actually do.

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And turning to non-permit-ready lots, I will say, following a lot of the comments from

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previous speakers, that infrastructure unlocks more units.

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to offset some of the costs that our members have to deal with would be super super helpful in driving down costs as well as

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setting uniform design standards such as roadway standards that would help out a lot with annexations

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and costs across the state and then of course limiting discretionary studies, mitigations, et cetera.

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There are so many issues right now with shrubstep, white oak, a lotta critical areas, storm land or storm water,

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We don't really think about in the housing development

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unless you're actually in it.

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And so those are the most,

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from what we see most fruitful ideas for reform.

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And we are constantly updating our research center,

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the Washington Center for Housing Studies.

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So definitely recommend that you check out our website

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and yeah, thank you so much.

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Thank you, Andrea, and I'm going to ask my committee members to pause on their questions until the next two speakers are complete and we have Dylan to talk about for-profit development.

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Thank You, Chair Babin. Members of the committee, I am Dylan Sluter, State Government Affairs Manager at the Master Builders Association of King and Sonomish Counties, obviously some of

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the larger development areas in the Puget Sound that we represent.

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Today I wanted to focus on one simple question.

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How do we turn the housing Washington has and allows on paper to homes that actually

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have built?

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Washington needs more than 50,000 homes per year.

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We've seen that data.

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That's not our data, that's the state's data but that is not just a planning goal.

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That is actually a production challenge.

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Our outside of the state and local control where labor materials barring rates things like that

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But there are policies that we should focus on that are choices that the State and the local governments can make

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permitting development standards local fees

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infrastructure the process and time and uncertainty that it takes to get to the

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Process and so the practical question is are we focusing enough on the parts that?

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We can control and that caused those delay and cost?

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Here's part of the capacity that doesn't equate to production always

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And I think Matthew touched on a little bit looking at the buildable lens analysis things like that

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Just because on paper it looks like there's playing capacity

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Does not mean that we're going to have a feasible product that works there

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There's all these different systems in place Andrea touched upon it folks before me did as well

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but basically housing is sort of

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one product governed by many systems

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And here's some of the systems we talked about, land availability and planning, zoning development standards, all of these things are

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What a builder goes into when they're thinking about project feasibility?

383
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I think the problem when we think about the system is that not one individual rule itself prohibits housing

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But the cumulative system can make it infeasible, especially when it doesn't work together

385
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So let's talk about this. Here's a real-life example a member provided. This is

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South King County jurisdiction within a UGA some excess property and owner had they were looking to redevelop and provide some homes

387
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It was middle housing. This is our townhome units

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There was zoning capacity for up to 20 units in this area

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This the city itself states they wanted alley oriented form for this which is an interesting concept

390
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So the original design the roadway around it is actually an alleyway

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But it meets all of the the definitions of a street

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It has a 20 foot width and the problem with this when they took it to the jurisdiction is that

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alleys though are preferred

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can not be vehicle access for the fire code.

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So this does not work.

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They had to go back and do a redesign,

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and basically the city asked them to put a street in.

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And so they put it public street,

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and at least half a Street.

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And if you would dedicate the right of way,

401
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add all the infrastructure, the landscaping,

402
00:30:22,544 --> 00:30:24,584
the sidewalks, then required with that,

403
00:30:24,584 --> 00:30:26,983
there's still a challenge that the Fire Code

404
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couldn't be met.

405
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And even though you add this public Street

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and still can potentially achieve those 20 units,

407
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there's the units inside towards the top that actually don't meet the fire access

408
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when it comes to the hose length which is 150 feet. So again, codes that seem to

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not be working together.

410
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So, again back to drawing board, here's another redesign. Okay, so now we have

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the entire thing having a roadway around it, but then

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there is now another requirement that units have to be

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on either public open space or the street and on the right side you can see this got brought

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down to 16 units but at the top right those units up top couldn't front onto either the

415
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public opened space because the back lot and the geometry and configurations couldn t fit that.

416
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So we added more infrastructure, we lost some units and those costs couldn

417
00:31:24,672 --> 00:31:27,071
They looked at other things such as like unit lot drives,

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but those have a max capacity of nine lots per drive.

419
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That didn't work.

420
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A shared driveway may only reach max for residential lots.

421
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So then they ended up with this configuration

422
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that actually went away from middle housing,

423
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went to single family lots,

424
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and this also didn' t work with

425
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They added the road access they tried to provide the frontage they did all of this

426
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But now these lots are very small difficult to manage and if you see up top that open space

427
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That was originally designed to be their stormwater vault is now shrunk and they thought they would run into storm water issues with this

428
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Ultimately the owner decided this isn't feasible. This doesn't make sense even though they try to work with the city

429
00:32:04,827 --> 00:32:10,708
I even saw from this project. They tried do cottage styles a numerous different issues, but

430
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Ultimately, what happens is, while the codes themselves don't say we outright donít allow

431
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this type of housing, when they work together, they doníst work well, and you end up with

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00:32:20,640 --> 00:32:25,279
a project that potentially 20 homes that could have been supplied, this site is still not

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developed.

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And so, these are some of the issues I wanted to highlight, that just because we have capacity

435
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doesníd mean it equates to production.

436
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What these fragmented systems can be and just because this

437
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Example had to do with fire and roads and different access issues

438
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It could be a different project with the same system of question do the rules work together to produce the housing they collectively supposedly allow

439
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And that issue is again a system issue. It's not an isolated rule

440
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So here's a question that I think is worth asking that

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I wanted to ask the committee and folks today.

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If we were designing a housing production system today

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to meet Washington's goals,

444
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would we design the system we have now?

445
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I don't believe so.

446
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We need to build the systems that builds the homes.

447
00:33:21,519 --> 00:33:24,440
And this is not necessarily a fault of

448
00:33:24,799 --> 00:33:29,759
who designed the system. It wasn't one person. This was years and decades that evolved

449
00:33:29,759 --> 00:33:35,119
of one legitimate objective or another that created this huge process that's difficult to manage.

450
00:33:35,119 --> 00:33:38,559
I'm not suggesting we completely start from scratch and start over. I am suggesting

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00:33:38,559 --> 00:33:43,119
we start thinking about how we design backwards from our goals and the outcome we want which are

452
00:33:43,119 --> 00:33:50,319
homes being built. So what's some near term solutions we can talk about? We've got a simplified land

453
00:33:50,943 --> 00:33:53,463
I think one of our priorities is raising the short

454
00:33:53,463 --> 00:33:56,023
plat threshold of 30 units within UGA's.

455
00:33:56,023 --> 00:33:57,624
That aligns with the CPA laws.

456
00:33:57,624 --> 00:34:01,564
That allows folks to use an administrative pathway,

457
00:34:01,564 --> 00:34:04,263
which we think can save up to 50% of time.

458
00:34:04,263 --> 00:34:07,104
Stabilize the building code as folks have discussed.

459
00:34:07,104 --> 00:34:09,864
This brings an opportunity for predictability,

460
00:34:09,864 --> 00:34:11,983
reduces regulatory churn, and allows

461
00:34:11,983 --> 00:34:14,903
folks catch up on the shortage that we have now.

462
00:34:14,903 --> 00:34:16,864
Create permitting certainty.

463
00:34:16,864 --> 00:34:19,184
Talk about clear and objective standards

464
00:34:20,864 --> 00:34:25,864
and strengthening the opportunity for licensed professionals to use their stamp as approval.

465
00:34:25,864 --> 00:34:30,864
Looking at peer reviews and limiting them when they are redundant in ad cost.

466
00:34:30,864 --> 00:34:32,864
And then obviously opposing new cost to housing.

467
00:34:32,864 --> 00:34:37,864
I think adding more costs when we're already so constrained,

468
00:34:37,864 --> 00:34:40,864
when you go through different regulations, as we talked about, this is a system.

469
00:34:40,864 --> 00:34:42,864
Multiple things can interact in different ways.

470
00:34:42,864 --> 00:34:44,864
Let's start thinking about this holistically as you

471
00:34:44,864 --> 00:34:46,864
go though builds the session and as

472
00:34:46,864 --> 00:34:49,864
you consider things, look at it through the lens of what does this mean for housing?

473
00:34:50,416 --> 00:34:56,096
And then for the long term, I think this is sort of a broad concept I wanted to introduce.

474
00:34:56,096 --> 00:34:57,936
Let's play them for production.

475
00:34:57,936 --> 00:35:02,576
Let us look at how we can look a capacity that land is serviceable, developable and likely

476
00:35:02,576 --> 00:35:06,335
to deliver homes, standardize what we came with the basics.

477
00:35:06,335 --> 00:35:11,536
Look at the things that are repeatable that we consistently do across multiple steps so

478
00:35:11,536 --> 00:35:20,255
that have these standardized checklists and things to go through the process more efficiently.

479
00:35:15,664 --> 00:35:20,463
coordinate the path. We've got one project to go through multiple systems. Let's coordinate

480
00:35:20,463 --> 00:35:31,583
and get a consolidated answer from the government. Make land housing ready.

481
00:35:24,800 --> 00:35:28,800
infrastructure is one of the hardest problems we're dealing with, as Andrea and folks before us.

482
00:35:28,800 --> 00:35:33,199
Let's start planning infrastructure and tying it to sites that are likely to be developed.

483
00:35:33,199 --> 00:35:37,039
And then let's measure what gets built. Let us look at the full production pathway.

484
00:35:37,840 --> 00:35:41,920
Ultimately, we see things, maybe 50 to 90s in place, things like that, but that's part of

485
00:35:41,920 --> 00:35:44,400
the data. I think we need to start looking collectively at all the

486
00:35:44,400 --> 00:35:51,280
data so that we can clearly address those barriers and those issues throughout the pipeline.

487
00:35:51,967 --> 00:35:58,947
and then that's sort of my closing but I just wanted to say that it impacts we believe everyone deserves a place to call home and

488
00:35:59,407 --> 00:36:06,668
I think the question I have is how do we create a clear more coordinated more predictable path from land to home?

489
00:36:07,447 --> 00:36:13,568
Because aplace to Call Home ultimately depends on a system capable of delivering one. Thank you

490
00:36:14,351 --> 00:36:16,351
Well, I feel like I should give you an applause, Dylan.

491
00:36:16,351 --> 00:36:19,351
Thank you very much for that.

492
00:36:19,351 --> 00:36:24,351
There was a very frustrating example that you showed, and I know that it's replicated in City across City.

493
00:36:24,351 --> 00:36:26,351
We'll talk more about that during the Q&A.

494
00:36:26,351 --> 00:36:27,351
Senator Solomon,

495
00:36:27,351 --> 00:36:29,351
I've asked folks if they could wait until the last presenter.

496
00:36:29,351 --> 00:36:30,351
Would that be okay?

497
00:36:30,351 --> 00:36:31,351
We have one more,

498
00:36:31,351 --> 00:36:32,351
and then I'll open it up for questions.

499
00:36:32,351 --> 00:36:33,351
Okay.

500
00:36:33,351 --> 00:36:34,351
All right.

501
00:36:34,351 --> 00:36:37,351
Ryan Donahue to talk about non-profit housing development.

502
00:36:37,351 --> 00:36:38,351
Good morning.

503
00:36:38,351 --> 00:36:39,351
Good Morning.

504
00:36:43,856 --> 00:36:46,695
President of Advocacy at Habitat Friminity, Seattle King,

505
00:36:46,695 --> 00:36:48,195
and Kittitas Counties.

506
00:36:49,487 --> 00:36:50,927
Hey, look at that.

507
00:36:50,927 --> 00:36:52,128
All right.

508
00:36:52,128 --> 00:36:54,768
So really excited to be able to have the opportunity

509
00:36:54,768 --> 00:36:58,487
to talk a little bit about who we are and the work that we do here.

510
00:36:58,487 --> 00:37:01,648
I'm sure many of you are familiar with Habitat for Humanity,

511
00:37:01,648 --> 00:37:04,447
if only because you've heard my voice talk about it

512
00:37:04,447 --> 00:37:06,327
quite a few times.

513
00:37:06,327 --> 00:37:07,967
But more importantly, what we did was

514
00:37:07,967 --> 00:37:10,847
we build permanently affordable homeownership opportunities

515
00:37:10,847 --> 00:37:15,088
for families all across Washington who are low income and below.

516
00:37:15,088 --> 00:37:20,248
In order to qualify for one of our homes, you have to be earning 80% or below area meeting income.

517
00:37:20,248 --> 00:37:22,887
So we're talking about your local barista.

518
00:37:22,887 --> 00:37:24,447
We're talk about a home health aid.

519
00:37:24,447 --> 00:37:30,967
We are talking a city staff member or the folks that work in our non-profits that help our communities run.

520
00:37:30,967 --> 00:37:37,128
Essentially, we are talkin about the essential workers that make our community continue to survive.

521
00:37:38,896 --> 00:37:42,516
Home ownership in the model we use is something called permanent affordability

522
00:37:42,936 --> 00:37:48,576
So we used a one-time investment that stays with the home in order to ensure permanent

523
00:37:48,655 --> 00:37:53,155
Affordability we's a long-term renewable ground lease that makes sure that that one time investment

524
00:37:53,536 --> 00:37:56,016
That we get whether it's from the state from The City

525
00:37:56,351 --> 00:38:04,112
Or, more often than not, as we'll hear a little bit more, both end up actually helping keep that home affordable into the long term.

526
00:38:04,112 --> 00:38:08,992
As I said, we are 100% home ownership, and the other thing I'll note is we actually,

527
00:38:08,992 --> 00:38:13,311
at our affiliate, have over 309 homes in our pipeline in King and

528
00:38:13,311 --> 00:38:15,871
Kittitas County over the next five years alone.

529
00:38:15,871 --> 00:38:20,632
This last year we built 54 homes, built and sold 54 home.

530
00:38:20,632 --> 00:38:22,552
This next year, our fiscal year.

531
00:38:25,391 --> 00:38:32,592
five, which is a lot needless to say, but I want to talk a little bit about some of

532
00:38:32,592 --> 00:38:36,751
how we're going to get to that 85 and the way that we are able to actually do that.

533
00:38:39,295 --> 00:38:43,536
I want to start off really by saying thank you to all of you, especially for those of

534
00:38:43,536 --> 00:38:49,615
you who were here in 2023 that voted to support the capital budget, which I believe everybody did

535
00:38:49,615 --> 00:38:57,135
that year, because this project was included as one of the appropriations in there at six

536
00:38:57,135 --> 00:39:02,416
million dollars. So of that 30 million dollar total development cost, six million of

537
00:39:05,088 --> 00:39:11,527
But I do want to take a quick second to kind of recognize what this project also represents.

538
00:39:11,527 --> 00:39:19,728
There has never been an affordable home ownership project that Habitat has done anywhere in the United States, this size are larger.

539
00:39:19,728 --> 00:39:22,927
This is actually a historically large project

540
00:39:22,927 --> 00:39:28,407
that really hadn't ever been done with a single family home, 58 units.

541
00:39:28,407 --> 00:39:30,608
As I said, in this neighborhood where it's built.

542
00:39:30,880 --> 00:39:37,679
the Columbia City, the average condos are roughly around $600,000 in order to purchase that.

543
00:39:37,679 --> 00:39:42,400
If you're going to purchased one of our homes at this project, you are starting off at either

544
00:39:42,400 --> 00:39:49,840
around 165 to $285, 000, depending on what size of home you building. This project took about four

545
00:39:52,751 --> 00:39:57,152
And it's important to note, right, that this was kind of a one-time thing.

546
00:39:57,152 --> 00:39:59,192
We'd never been able, we hadn't ever done this before.

547
00:39:59,192 --> 00:40:01,992
We look forward to continuing to do these type of projects.

548
00:40:01,992 --> 00:40:05,751
You also have the pro forma for this project in the book.

549
00:40:05,751 --> 00:40:07,231
I believe we submitted that.

550
00:40:07,231 --> 00:40:09,831
I'm assuming that that's, you guys have that somewhere, at least I hope so.

551
00:40:10,304 --> 00:40:17,704
I wanted to compare it though to another project that we have going on this one is floral Avenue is what we're currently calling it

552
00:40:17,704 --> 00:40:21,864
I'm sure I can't imagine any of you guys can guess where it is in Cleallam, but

553
00:40:23,184 --> 00:40:26,943
More specifically this is a project. That's gonna be 16 units in cleallum

554
00:40:27,384 --> 00:40:29,384
We're comparing the two because

555
00:40:30,143 --> 00:40:38,224
one thing I really kind of want to lean in here is that local housing subsidy and the state housing trust fund component of it

556
00:40:38,815 --> 00:40:42,815
When we are trying to do projects in, for example, the City of Seattle,

557
00:40:42,815 --> 00:40:49,536
we're lucky that there are a number of different local funding sources that are able to help maximize those projects and maximize

558
00:40:49,536 --> 00:40:54,815
those dollars available to us, whether it's through things like mandatory housing affordability,

559
00:40:54,815 --> 00:41:00,655
or the Seattle housing levy, or even the jumpstart tax.

560
00:41:00,784 --> 00:41:06,063
Any of those things all help make housing more, or make affordable housing possible.

561
00:41:06,063 --> 00:41:09,063
I should say help fund affordable, housing in the city of Seattle.

562
00:41:09,063 --> 00:41:14,664
That means the state doesn't necessarily have to lean in as much on those projects.

563
00:41:14,664 --> 00:41:22,903
As I noted before, you all allocated $6 million to the Liberty Commons project out of a $30 million allocation.

564
00:41:22,903 --> 00:41:29,664
What we ask for when we asked for funding in a project like Cleolm is significantly more in proportion to what the project is.

565
00:41:30,159 --> 00:41:35,440
ultimately what we need because they don't have the local funding sources available to them.

566
00:41:35,440 --> 00:41:40,119
Ultimately, when there's no local housing funder, the state ends up becoming that local

567
00:41:40,119 --> 00:41:42,559
housing funder.

568
00:41:42,559 --> 00:41:46,880
Coming back to Liberty Commons for a second, I want to know a little bit here.

569
00:41:46,880 --> 00:41:51,320
First off, as you can see, we were able to obtain the land in 2022.

570
00:41:51,320 --> 00:41:57,280
We purchased it off the open market outright, and we're able build a couple years later.

571
00:41:59,152 --> 00:42:02,351
was because of design review this is something that you all have actually

572
00:42:02,351 --> 00:42:06,192
helped address already so thank you but one thing in particular I do want to

573
00:42:06,192 --> 00:42:08,431
note was we actually had to work with the city of

574
00:42:08,431 --> 00:42:10,672
Seattle and our partners some of which

575
00:42:10,672 --> 00:42:14,351
right here at the table to help get a ordinance passed at

576
00:42:14,351 --> 00:42:17,791
the City level to be able to emphasize that and make sure

577
00:42:17,791 --> 00:42:19,791
that we were able be to get through some

578
00:42:19,791 --> 00:42:23,231
of the design-review problems another thing that's really important to

579
00:42:24,208 --> 00:42:26,208
is funding at scale.

580
00:42:26,208 --> 00:42:28,367
When we start talking about affordable housing funding,

581
00:42:28,367 --> 00:42:29,527
especially when we're looking at

582
00:42:29,527 --> 00:42:30,927
when this project moved forward,

583
00:42:30,927 --> 00:42:33,288
which was 2022, 2023,

584
00:42:33,288 --> 00:42:36,327
it's important to remember what the funding was available

585
00:42:36,327 --> 00:42:38,967
for affordable home ownership at that point in time.

586
00:42:38,967 --> 00:42:40,487
It was significantly less.

587
00:42:40,487 --> 00:42:42,047
I've been here seven years,

588
00:42:42,047 --> 00:42:44,367
and I remember seven, seven year ago,

589
00:42:44,367 --> 00:42:46,407
we were lucky in the home-ownership space

590
00:42:46,407 --> 00:42:49,728
to get about two to three million dollars a year.

591
00:42:50,271 --> 00:42:54,992
That's obviously gone up now and I want to thank all of you for doing this and helping

592
00:42:54,992 --> 00:42:57,512
to be able to make that more possible.

593
00:42:57,512 --> 00:43:03,552
But the reality is, is that even in 2023, the funding wasn't at scale enough to actually

594
00:43:03,552 --> 00:43:07,271
award a project like Liberty Commons, a regular award.

595
00:43:07,271 --> 00:43:09,472
So we had to go for a direct appropriation.

596
00:43:09,472 --> 00:43:13,152
We appreciate the fact that you all gave us that direct appropriations, but we'd rather

597
00:43:13,152 --> 00:43:15,992
compete with everybody else to get that.

598
00:43:19,824 --> 00:43:23,764
to do that. A couple of other things really to highlight before we move on to

599
00:43:23,764 --> 00:43:29,764
the next slide here is first off that sales tax per home notation there that's

600
00:43:29,764 --> 00:43:35,403
the added cost per her home that had to be allocated in order to

601
00:43:35,403 --> 00:43:39,123
be or that basically the homeowner ended up still having to pay for in

602
00:43:39,123 --> 00:43:42,403
order be able to mitigate that

603
00:43:40,960 --> 00:43:45,960
So, for example, on this project itself, it was roughly $2.1 million.

604
00:43:45,960 --> 00:43:54,599
And again, you all allocated $6 million, so a third of that ended up coming right back to the state in sales tax.

605
00:43:55,280 --> 00:44:00,599
So we'll just note that the other thing I'll note is because we had to get a construction loan on this

606
00:44:00,599 --> 00:44:07,119
It actually cost us almost a million dollars eight hundred and fifty thousand dollars in interest loan interest rates alone

607
00:44:07,559 --> 00:44:12,480
Just to be able to give this project done so we can be about to close on the mortgages and be

608
00:44:12,480 --> 00:44:14,480
able clothes on that loan

609
00:44:14,480 --> 00:44:17,480
Both of those things cost additional funding

610
00:44:17,840 --> 00:44:21,400
So the question is what is that we could do to change the math here?

611
00:44:22,128 --> 00:44:29,068
First off substantial and predictable capital we simply need more money particularly for affordable homeownership

612
00:44:29,068 --> 00:44:31,648
And it needs to be sized at scale in order to

613
00:44:31,648 --> 00:44:33,887
Be able to continue to produce that we need

614
00:44:33,887 --> 00:44:38,447
More local funding flexibility don't make it so the state is the only option to

615
00:44:38,447 --> 00:44:40,168
Be be able get funding options. We need to

616
00:44:40,168 --> 00:44:42,768
Be available to use access local governments as well

617
00:44:43,519 --> 00:44:49,360
a revolving construction loan fund to be able to reduce the cost of interest rates that we're having to pay in order to

618
00:44:49,360 --> 00:44:55,039
be to get these construction loans and then also take a look at sales and use tax and

619
00:44:55,599 --> 00:44:59,760
acknowledge that or and realize that there's a lot of entities that don't have to necessarily

620
00:45:00,400 --> 00:45:04,159
pay sales in use taxes when it's for public goods. That's not the case when

621
00:45:04,159 --> 00:45:07,360
it comes to affordable housing that's the way we can bring more affordable

622
00:45:07,360 --> 00:45:11,280
housing online at a quicker rate. So thank you very much.

623
00:45:13,135 --> 00:45:16,416
I know my info is up there but I'm sure we'll take questions for any of us.

624
00:45:16,416 --> 00:45:19,056
Yes, we will. Okay, committee members,

625
00:45:19,056 --> 00:45:23,856
we have some time for questions. Senator Solomon, did you want to start with your question for Dylan?

626
00:45:30,335 --> 00:45:36,016
Yeah, sorry, I got mute. Dylan, thank you for your presentation. I was just wondering,

627
00:45:43,248 --> 00:45:46,248
about the plant that was not ultimately built.

628
00:45:46,248 --> 00:45:48,608
Does the fire code vary by city?

629
00:45:48,608 --> 00:45:52,327
I just don't understand why there's this back and forth.

630
00:45:52,327 --> 00:45:54,327
Is there a lack of clarity in the code

631
00:45:54,327 --> 00:45:57,307
and is there build that could help that?

632
00:46:01,295 --> 00:46:06,335
Thanks for the question. I think in this example, it was just a multitude of different code issues

633
00:46:06,335 --> 00:46:12,016
that were difficult on a constrained site. You know, if the alleyway was allowed to be the fire

634
00:46:12,016 --> 00:46:17,695
access, which I thing was a local discretion option, that the ally could have fit the required

635
00:46:17,695 --> 00:46:21,856
standards within the Fire Code to beat that access. And my understanding from the builder I worked

636
00:46:24,768 --> 00:46:29,007
that was the case but the city didn't allow that even though they preferred alleys so that

637
00:46:29,007 --> 00:46:33,648
was one of the issues they tried to work around but without changes for these codes to actually

638
00:46:33,648 --> 00:46:37,007
work together like if you're going to have that preference I think you should allow those

639
00:46:37,007 --> 00:46:40,768
access opportunities especially if your building to the standard. So that

640
00:46:40,768 --> 00:46:45,007
was I the major issue and then the frontage issues as well was difficult to deal with on this sort

641
00:46:51,423 --> 00:46:55,824
policy not working with the fire code was the conflict that ultimately killed it.

642
00:46:58,063 --> 00:46:59,264
Follow-up, Senator Solomon?

643
00:46:59,983 --> 00:47:06,143
It's just interesting that you mentioned that the city had the ability to authorize the idea,

644
00:47:06,143 --> 00:47:10,063
but didn't. I just think maybe that's something we should drill down on in the future.

645
00:47:10,063 --> 00:47:11,664
I sent you an email already, Dylan.

646
00:47:11,664 --> 00:47:12,463
Okay, thank you.

647
00:47:13,664 --> 00:47:14,943
Thank you, senator Gaynor.

648
00:47:20,992 --> 00:47:26,512
I've been, I guess in 24 years that I have been in county and state government.

649
00:47:26,512 --> 00:47:33,152
I had continually heard issues relating to regulations and as Matthew mentioned,

650
00:47:33,791 --> 00:47:40,751
the housing problem started back in the 90s. So could you highlight either some of the regulations

651
00:47:40,751 --> 00:47:46,271
that have recently been passed that may have actually been helpful or things that you would

652
00:47:54,960 --> 00:48:02,400
Yeah, well, there are a lot of things. I probably could write an entire dissertation, but I

653
00:48:02,639 --> 00:48:08,480
Think probably first and foremost is focus is refocusing on modernizing the Growth Management Act

654
00:48:08,480 --> 00:48:10,920
I think that there's a lotta things in that that are

655
00:48:11,800 --> 00:48:17,880
opportunities for being able not just to speed up process or speed-up construction projects,

656
00:48:17,880 --> 00:48:21,460
but also be able to alleviate some of the

657
00:48:22,032 --> 00:48:31,552
I guess discretion and the lack of understanding of who has authority and who's lane is really

658
00:48:31,552 --> 00:48:41,152
who is lane, right? So like in my presentation I mentioned that some state agencies and some

659
00:48:41,152 --> 00:48:45,632
special purpose districts feel like they have more power over the end permit decision than they

660
00:48:49,648 --> 00:48:57,887
A lot of times our local governments are not, I guess, given the I don't know what the right

661
00:48:57,887 --> 00:49:03,327
word is, but basically they're kind of caught between the middle of the project, the Project

662
00:49:03,327 --> 00:49:08,927
Advocate and another third party, right? And so how do we ensure that there's a mechanism

663
00:49:08,927 --> 00:49:13,088
in place to control some of that? We have a member issue in Clark County right now where

664
00:49:15,824 --> 00:49:26,704
pretty interesting in their interpretation on a fire access gate for a pool and really it's the

665
00:49:26,704 --> 00:49:31,423
local government that's allowed to decide how to deal with that issue. They just don't feel like

666
00:49:31,423 --> 00:49:37,503
they are empowered to do that right now. So thank you. Does anyone else have anything they want to add?

667
00:49:39,952 --> 00:49:46,592
I guess answering the other side of the question, this is Ryan Donahue with Habitat again, the

668
00:49:47,184 --> 00:49:50,344
Some of the good regulations, if you count them as good, or if

669
00:49:50,344 --> 00:49:53,224
you counted them is regulations I'm not entirely sure.

670
00:49:53,224 --> 00:49:55,143
But I would actually point specifically to some of

671
00:49:55,143 --> 00:49:57,344
the parking reforms that have been done.

672
00:49:57,344 --> 00:49:59,503
Minimizing the requirements for parking, I

673
00:49:59,503 --> 00:50:01,664
would point to sum of requirements

674
00:50:01,664 --> 00:50:05,824
for ground floor mixed use changes, some

675
00:50:05,824 --> 00:50:07,503
of work that's been there.

676
00:50:07,503 --> 00:50:09,704
As being another example of things that

677
00:50:09,704 --> 00:50:10,744
have actually helped out,

678
00:50:10,744 --> 00:50:14,583
I'd point in middle housing as well, HB 1110,

679
00:50:14,583 --> 00:50:16,384
as wells actually ULS reform as

680
00:50:16,559 --> 00:50:22,659
And being able to really kind of be in some of those things that have been done especially over the last few years that

681
00:50:22,659 --> 00:50:24,659
Have been quite helpful

682
00:50:25,079 --> 00:50:27,079
Go ahead Dylan. I

683
00:50:27,079 --> 00:50:30,199
Encourage Ryan on those issues especially things like unit lots of division

684
00:50:30,199 --> 00:50:32,639
We've seen be used to provide that ownership project.

685
00:50:32,639 --> 00:50:34,639
I just wanted to highlight

686
00:50:34,032 --> 00:50:38,431
the lack of standardization, one issue that a lot of our folks are facing.

687
00:50:38,431 --> 00:50:41,231
So in King County, when you're dealing with stormwater mitigation,

688
00:50:41,231 --> 00:50:43,072
they sort of have their own rule set and do their

689
00:50:43,072 --> 00:50:46,831
own things. So like proprietary systems to deal with the mitigation

690
00:50:46,831 --> 00:50:57,231
that ecology has tested, invented, and say work well.

691
00:50:50,400 --> 00:50:55,559
Some of those King County wouldn't allow on their own and I think if we're going to have ecology testing and vetting these

692
00:50:55,559 --> 00:50:55,760
I

693
00:50:55,760 --> 00:50:59,400
think that should be sort of a top-down approach to say if these work they should

694
00:50:59,400 --> 00:51:02,599
Be able to work everywhere and allows that flexibility it allows

695
00:51:02,599 --> 00:51:09,480
That innovation to happen and ask a clarifying question. Yeah, are you saying that ecology has vetted a certain stormwater management?

696
00:51:09,880 --> 00:51:15,960
Yes things and Seattle saying we've got our own thing. We're not going use that one. King county. Okay.

697
00:51:17,327 --> 00:51:20,927
That's a good example, thank you.

698
00:51:20,927 --> 00:51:22,487
Senator Elvarado, do you have a question?

699
00:51:22,487 --> 00:51:25,648
No, okay, well that's good because we're running out of time.

700
00:51:25,648 --> 00:51:33,728
But I do want to just say the example that you gave was really helpful to see that plot of land and

701
00:51:33,728 --> 00:51:39,608
the multiple iterations that that landowner was going through in order to get homes to the market.

702
00:51:40,735 --> 00:51:46,576
there is discretion from the city and they're making an active policy choice and that policy

703
00:51:46,576 --> 00:51:53,295
choice is resulting in less homes being built in a city. And we have cities that tell us we need

704
00:51:53,295 --> 00:51:57,775
we needs more homes and we needed to build more home and yet we had policies like this where it

705
00:51:57,775 --> 00:52:03,775
literally is a choice. We could have a pro housing approach as a local government.

706
00:52:04,143 --> 00:52:07,264
and have all of those different, the fire department

707
00:52:07,264 --> 00:52:08,943
and the city planners coming together to say,

708
00:52:08,943 --> 00:52:10,463
how do we get to a yes?

709
00:52:10,463 --> 00:52:12,864
And how can we partner with you to get these homes

710
00:52:12,864 --> 00:52:15,423
on the market because what ultimately will happen

711
00:52:15,423 --> 00:52:18,063
is that lot is going to sit there, make it,

712
00:52:18,063 --> 00:52:20,784
or they're going build a multi-million dollar mansion,

713
00:52:20,784 --> 00:52:22,463
McMansion on it.

714
00:52:22,463 --> 00:52:23,344
And in that case,

715
00:52:23,344 --> 00:52:25,184
the City is giving up 20 homes.

716
00:52:25,184 --> 00:52:28,304
It could be more affordable for a single family home,

717
00:52:28,304 --> 00:52:32,143
which I think is antithetical to most of our goals here

718
00:52:33,920 --> 00:52:38,679
And I appreciate the comments that you made, Ryan, about bills and legislation.

719
00:52:38,679 --> 00:52:43,599
I would point to we have had legislation proposing workforce revolving loan funds.

720
00:52:43,599 --> 00:52:44,519
We actually passed that bill.

721
00:52:44,519 --> 00:52:46,719
That was a Mari Levitt bill multiple years ago.

722
00:52:46,719 --> 00:52:48,400
It has never been funded.

723
00:52:48,400 --> 00:52:53,760
We've also had a bill that gave a sales tax exemption for affordable housing construction.

724
00:52:53,760 --> 00:52:56,199
I'd love to see that applied more broadly.

725
00:52:56,199 --> 00:52:58,199
That bill did not pass.

726
00:52:58,199 --> 00:53:02,920
Yeah, it did pass, so the specific barriers that

727
00:53:03,248 --> 00:53:09,208
the legislature has worked on but not funded and considered and not passed.

728
00:53:09,208 --> 00:53:14,527
The point being we can take action and appreciate you all coming forward with potential solutions.

729
00:53:14,527 --> 00:53:15,728
We will take note of that.

730
00:53:15,728 --> 00:53:19,128
We look forward to partnering with you on this issue of making sure we all have more housing.

731
00:53:19,128 --> 00:53:23,887
And with that, we're going to move to the next panel because we are getting low on time.

732
00:53:24,224 --> 00:53:29,463
But welcome. We have two presenters, Chris Hermans and Marty Koestra, and they're going

733
00:53:29,463 --> 00:53:34,224
to provide us with an update on starter home demonstration program of the Washington starter

734
00:53:34,224 --> 00:53:37,224
home plan. Good morning. Welcome. Please begin.

735
00:53:38,672 --> 00:53:44,992
Thank you Madam Chair and community members. We're excited to be able to provide you an update

736
00:53:45,552 --> 00:53:52,992
around the starter home plan since we last met with you and into coma in July and so

737
00:53:55,487 --> 00:54:01,407
getting an overview of where we are with the demonstration program along with some other work

738
00:54:01,407 --> 00:54:07,487
that's underway and then I will spend a few minutes just talking about update on the financing

739
00:54:08,367 --> 00:54:12,608
that we're looking to try to inspire related to offset construction.

740
00:54:18,672 --> 00:54:44,672
So we're going to quickly go through is is giving you an update on what's happened when since we last saw you in July as Chris said we are definitely wanting to update you on the demonstration program and the financing programs and also what we've been doing as it relates to the response and long term recovery of the fires that have occurred again in Washington state. Next slide, please.

741
00:54:48,192 --> 00:55:04,192
Based on where we are at, related to understanding the long-term recovery, we're staying in close contact with communities called Viltride, Spokane leadership, organizations there, developers, builders, the AIA and others.

742
00:55:04,719 --> 00:55:08,619
trying to make sure that everything that we have learned over the years from no

743
00:55:08,619 --> 00:55:13,860
honor fires out to Dina, certainly the experience post Katrina and how

744
00:55:13,860 --> 00:55:18,900
offsite methodologies and the starter home plan fits into that recovery

745
00:55:18,900 --> 00:55:21,780
strategy, including the use of pre approved.

746
00:55:21,903 --> 00:55:25,143
permit ready plans, the townhouse competition

747
00:55:25,143 --> 00:55:28,503
that Chris has led, and other strategies,

748
00:55:28,503 --> 00:55:32,184
including the use of what we call micro factories,

749
00:55:32,184 --> 00:55:36,264
rather than needing to establish one or two large factories.

750
00:55:36,264 --> 00:55:38,583
How can we use a satellite and hub strategy

751
00:55:38,583 --> 00:55:43,583
or a smaller, basically, micro factory strategy

752
00:55:44,143 --> 00:55:46,903
in community, keeping economic development,

753
00:55:46,903 --> 00:55:50,664
economic benefit in the community and leveraging offsite?

754
00:55:51,280 --> 00:56:09,280
We also talked specifically with you in July about how the use of offsite front loads some cost issues and what that does in terms of creating a financing strategy challenge and we will share with

755
00:56:20,880 --> 00:56:23,079
program. So let's go to the next slide.

756
00:56:25,119 --> 00:56:31,760
So the demonstration program will start with us releasing the RFP out to

757
00:56:31,760 --> 00:56:33,639
communities and developers.

758
00:56:34,063 --> 00:56:39,664
You can imagine that there have been a number of folks reaching out to us from across the state

759
00:56:39,664 --> 00:56:45,423
with potential projects. We're starting to even see more of the habitat affiliates in various

760
00:56:45,423 --> 00:56:52,864
pockets throughout the State acquiring larger parcels of land, community land trusts as well,

761
00:56:53,503 --> 00:56:57,184
and then developers of course who are private developers who

762
00:57:03,344 --> 00:57:10,824
now secured and properly catalogued and categorized at commerce. Snap the Spokane

763
00:57:10,824 --> 00:57:15,583
neighborhood action partners will be the fiscal intermediary and of course the

764
00:57:15,583 --> 00:57:21,384
ship will help administer that. We're looking for two sites, two distinct

765
00:57:21,384 --> 00:57:26,744
jurisdictions, 30 to 44 sale homes. Again, we're targeting low and moderate

766
00:57:29,856 --> 00:57:33,376
Each site will test a different off-site methodology.

767
00:57:33,376 --> 00:57:36,815
It could be full-on 3D volumetric boxes,

768
00:57:36,815 --> 00:57:39,976
or a panelized construction,

769
00:57:39,976 --> 00:57:43,416
or some hybrid thereof alongside stick fame,

770
00:57:43,416 --> 00:57:46,536
because we actually do want to be able to test

771
00:57:46,536 --> 00:57:49,775
all of the assumptions that have been made.

772
00:57:49,791 --> 00:57:55,952
And so we will be using the Housing Future Center at the University of Washington to actually

773
00:57:55,952 --> 00:58:01,472
monitor and evaluate and do all of the R&D related work that goes along with this.

774
00:58:02,512 --> 00:58:03,711
Next slide, please.

775
00:58:06,431 --> 00:58:11,952
So what will we measure? Well, first of all, we want to get to a better understanding of

776
00:58:16,576 --> 00:58:24,096
A lot of times what we see as developers and others looking at first-cost only, we know that

777
00:58:24,079 --> 00:58:26,980
Until we get to standardized plans, until we

778
00:58:26,980 --> 00:58:35,119
get the repeatability volume purchasing, that there may be a 10% up to 10 percent premium

779
00:58:35,119 --> 00:58:39,440
for using off-site methodologies in the first cost.

780
00:58:39,440 --> 00:58:46,159
However, when we factor in time and time to market, time delivery, I think you just heard

781
00:58:46,159 --> 00:58:53,440
from one of your parties that, there was 850k in interest on a project that was done.

782
00:58:53,487 --> 00:59:03,487
We seek to better understand what the fully loaded costs are, and of course, we're looking at scale and quality and waste.

783
00:59:03,487 --> 00:59:12,487
There are a lot of things that we are learning about how use of offsite methodologies can improve our sustainability practices and our reduction in waste, etc.

784
00:59:12,976 --> 00:59:20,175
So, we hope to have the first comparative data available to review Q4-2027,

785
00:59:20,815 --> 00:59:27,615
and we certainly are looking forward to moving forward with this demonstration program,

786
00:59:27,615 --> 00:59:33,536
a task force is being seated that will do all the evaluations and final decisions

787
00:59:34,096 --> 00:59:42,815
in the 1st quarter of next year.

788
00:59:36,431 --> 01:00:00,431
We're also about ready to release. We hope by the time housing Washington comes around the first phase of our work with community attributes on the economic impact study that will elucidate very clearly where we see the starter home plan contributing to the revenue base and revenue opportunities for the state and local communities.

789
01:00:05,711 --> 01:00:20,711
As electives are very keenly aware of a lot of these things, as you struggle with the revenue issues, we just want to make them very plain and clear so that you can actually process them and see how investments might make a difference.

790
01:00:20,711 --> 01:00:24,711
Next slide, please.

791
01:00:24,711 --> 01:00:27,711
And I think this is where Chris picks up.

792
01:00:27,920 --> 01:00:50,920
It is and as we talked about just a kind of a reminder when we met in July with you at craft contracting one of the key things that we're working on simultaneously to the demonstration program is for the first time to work in putting together financing program and products that work for offset construction.

793
01:00:57,519 --> 01:01:02,519
of a home's building cost for offsite construction

794
01:01:03,559 --> 01:01:06,840
is in the factory and currently low lenders.

795
01:01:06,840 --> 01:01:11,840
And we had a design session with six banks in May

796
01:01:11,840 --> 01:01:16,840
and none of them have an existing program or product

797
01:01:17,119 --> 01:01:18,719
that funds off site.

798
01:01:18,719 --> 01:01:20,760
So we have been at the same time working

799
01:01:20,760 --> 01:01:22,960
with the finance commission,

800
01:01:22,960 --> 01:01:26,199
modeled after our conversations and programs

801
01:01:26,735 --> 01:01:33,135
in Colorado, in Oregon, and California, Tulsa and other places in the country that's looking

802
01:01:33,135 --> 01:01:41,056
to incentivize both developers to build using offset construction, as well as lenders to

803
01:01:41,056 --> 01:01:52,976
get engaged in factory capacity. So next slide. We're excited to just note that at the August

804
01:01:53,391 --> 01:02:15,391
Finance Commission meeting, the board has approved two allocations and the first allocation is $10 million for what we're just generally describing as a catalyst fund that specifically would be administered by an area CDFI.

805
01:02:22,672 --> 01:02:24,672
specifically to

806
01:02:25,983 --> 01:02:32,943
provide seed capital and that down payment assistance to the factory to utilize penalizer

807
01:02:32,943 --> 01:02:41,664
modular construction methods. Again, with public financing, the target will be 50 to 80 percent

808
01:02:41,664 --> 01:02:50,864
AMI and allows for shared equity and 50 year affordability. The second tranche is $10 million,

809
01:02:55,280 --> 01:03:10,280
We're looking to use finance commission's capital to bring in conventional construction lenders as because we do not currently have an existing program or product.

810
01:03:10,280 --> 01:03:24,280
There's a lot of concern or caution on the part of private lenders to get into this financing. So the goal is ultimately to create revolving loan product that would incentivize.

811
01:03:24,496 --> 01:03:32,056
both nonprofits and, but specifically, small, lot mission line developers building missing

812
01:03:32,056 --> 01:03:39,735
middle housing to utilize offset construction with this particular program and product.

813
01:03:39,735 --> 01:03:47,655
And it would be a recyclable, recycled capital, and but it's done in combination with

814
01:03:49,119 --> 01:04:08,119
Trying to standardize designs master permitting and ultimately to aggregate off site construction demand. So that in fact, we're trying to build factory capacity and a predictable pipeline for them to be able to go from one shift to two and three shifts.

815
01:04:18,576 --> 01:04:32,576
The private market will in fact have an opportunity to see that this is actually a de-risking proposition and that they will get involved with their own products.

816
01:04:32,576 --> 01:04:43,576
So right now we are continuing to work with the finance commission and putting the structures in place. We have a draft.

817
01:04:43,576 --> 01:04:47,576
I'm going to ask you to try to wrap it up.

818
01:04:47,568 --> 01:04:49,568
And we're, yeah, we were next slide.

819
01:04:52,143 --> 01:05:01,023
This is our last slide. Ultimately, we think that where we need the legislature and what makes all of

820
01:05:01,023 --> 01:05:11,583
this repeatable is that if we are able to pass permit ready plans with SB 6015, my introduction,

821
01:05:11,583 --> 01:05:16,224
if were able through resource, LNI, and local jurisdictions to be able

822
01:05:19,664 --> 01:05:36,423
For both permit ready plans and factory built housing that will be in a place to aggregate that demand in order to be able to accelerate attainable starter homes for working families across Washington State and we'll just end with

823
01:05:37,503 --> 01:06:05,503
We understand the current revenue constraints for the state of Washington, and there is an opportunity to do a capital budget appropriation that matches the finance commission's program related investments, as we've seen in other states, that would be a huge lift, but it is not something that we are requiring or that will be required for these programs to move forward.

824
01:06:07,152 --> 01:06:19,152
Thank you so much, Chris and Marty. Thank, you. So much. It was very exciting to hear the work that you've done and those specific asks and how they relate to creating more start homes. Do we have any questions from the committee?

825
01:06:22,152 --> 01:06:25,152
All right, looks like we don't. We'll keep trying along.

826
01:06:25,152 --> 01:06:28,152
Thank. You so, Marty and Chris will look forward to talking with you more.

827
01:06:29,327 --> 01:06:34,447
Okay, with that, we will move to our last subject for the agenda today, which is housing

828
01:06:34,447 --> 01:06:41,327
affordability trends and financing. We are very lucky today to have an overview of affordability

829
01:06:41,327 --> 01:06:47,728
trends by Chris Collier, the director of government relations housing authority of Snohomish County.

830
01:06:47,728 --> 01:06:50,208
Good morning, Chris. I haven't seen you in a while. It's good to

831
01:06:50,208 --> 01:06:53,728
have you back before the committee. Good to see you, Madam Chair, members of the

832
01:06:53,728 --> 01:06:55,967
committee, thank you so much. Am I coming through? Okay.

833
01:06:56,623 --> 01:06:57,623
You are great.

834
01:06:57,623 --> 01:06:58,623
Okay.

835
01:06:58,623 --> 01:07:03,983
Okay, I'm joining you from Eastern Washington, Washington DC, where I am here representing

836
01:07:03,983 --> 01:07:07,744
both the Association of Washington Housing Authorities, on which I co-chair the Legislative

837
01:07:07,744 --> 01:07:12,143
Committee and the American Planning Association, in Washington chapter where i co share their

838
01:07:12,143 --> 01:07:13,704
legislative committee as well.

839
01:07:13,704 --> 01:07:18,903
So I' m here to really put an exclamation point as we round out the session on all of

840
01:07:18,903 --> 01:07:19,903
the presenters ahead.

841
01:07:19,903 --> 01:07:23,423
I think that you will find in the next 10 minutes that I have, and I'll try to keep to

842
01:07:25,775 --> 01:07:37,775
Again, or an exclamation point on the information that was shared in the presentations proceeding. So let me share my screen very quickly and is that visible to everybody, especially online.

843
01:07:37,775 --> 01:07:39,775
It is true. Okay. Very good.

844
01:07:39,775 --> 01:07:42,775
So here's my presentation. I'll get right into it.

845
01:07:46,016 --> 01:07:49,936
data from OFM. Here is the number of homes versus the

846
01:07:49,936 --> 01:07:52,096
number households that were built in Snohomish County in

847
01:07:52,096 --> 01:07:56,896
green year by year per OFF. We built 1,106 more housing units in

848
01:07:56,896 --> 01:07:59,536
Snuhomich County than new households either moved or

849
01:07:59,536 --> 01:08:04,576
reformed to, you know, in Sinohamish county in that year.

850
01:08:04,576 --> 01:08:07,376
This adds up, the housing unit does not get pushed over, that is

851
01:08:07,376 --> 01:08:11,775
unsold or un-rented in 2004. This ends up into a surplus. If we

852
01:08:12,864 --> 01:08:18,384
zero in the year 2000. We add up to a healthy surplus of housing that continues to be added

853
01:08:18,384 --> 01:08:22,863
to year by year and this indicates that people have choice. There are options whether to rent

854
01:08:22,863 --> 01:08:27,663
to own or something else in Snomish County if you're forming a household here. This changes

855
01:08:31,600 --> 01:08:38,340
significant increase in immigration to Snohomish County in this period to functionally zero by 2019 the rebound

856
01:08:39,159 --> 01:08:43,319
from Mr. Gardner's presentation was primarily apartment construction as he covered

857
01:08:44,220 --> 01:08:50,020
So we remain in a period of acute scarcity in ownership housing. What did this do to price in?

858
01:08:51,380 --> 01:08:58,619
Brown is the median sale price for a single family detached home in all Snuhomich County adjusted for inflation from

859
01:08:58,840 --> 01:09:00,840
2000 to 2025

860
01:09:01,296 --> 01:09:05,735
We have a high water market of $831,000 in 2024.

861
01:09:05,735 --> 01:09:08,615
Again, this is adjusted for inflation.

862
01:09:08,615 --> 01:09:11,576
Now, most of us are not buying homes with all cash.

863
01:09:11,576 --> 01:09:15,456
We need to get a bank loan, so let's put 10 percent down on this home,

864
01:09:15,456 --> 01:09:17,655
which is the majority sale product in

865
01:09:17,655 --> 01:09:18,655
Sonoma County, by the way,

866
01:09:18,655 --> 01:09:20,815
about 80 percent of our homes sold,

867
01:09:20,815 --> 01:09:23,136
our housing stock is single-family detached.

868
01:09:23,136 --> 01:09:25,536
Let's go to 10% down payment on

869
01:09:25,536 --> 01:09:29,015
a 30-year fixed rate mortgage with the annualized annual interest rate.

870
01:09:29,167 --> 01:09:34,608
property taxes and insurance included, and you get this yellow line. This is the required income

871
01:09:34,608 --> 01:09:39,807
for a household to obtain this median house, right? The final piece of the puzzle is a debt

872
01:09:39,807 --> 01:09:45,408
to income ratio of 33%, above which the bank says you're an unsafe lending prospect,

873
01:09:45,408 --> 01:09:50,847
right. The reason that that jump happens in 2021 is interest rates going from two to six,

874
01:09:54,463 --> 01:10:00,823
What this line I like to say is that you must be this tall to ride line for housing ownership in Snohomish County.

875
01:10:00,823 --> 01:10:04,003
This is from the financial perspective. How tall are we?

876
01:10:04,003 --> 01:10:13,463
In purple, but inflation adjusted median household income in snohamish county. The problem starts here. It rolls downhill from here to town homes to condominiums to apartments.

877
01:10:13,463 --> 01:10:19,783
Just for context, the average rent for an apartment in Sonohama County again adjusted for inflation in green.

878
01:10:20,591 --> 01:10:24,311
This is how asking rents look like in Snohomish County.

879
01:10:24,311 --> 01:10:26,152
Back to Mr. Gardner's presentation,

880
01:10:26,152 --> 01:10:28,391
the dearth of or rather the, the oversupply,

881
01:10:28,391 --> 01:10:32,351
not overupply the production of apartment units.

882
01:10:32,351 --> 01:10:34,112
In Snuhomich County has had an impact

883
01:10:34,112 --> 01:10:36,591
on the actually asking price for apartments.

884
01:10:36,591 --> 01:10:38,631
Ownership housing is not the same story.

885
01:10:38,631 --> 01:10:41,231
In the appendix packet that I sent

886
01:10:41,231 --> 01:10:43,231
that should be in your materials,

887
01:10:43,231 --> 01:10:44,471
you'll see that production

888
01:10:44,471 --> 01:10:47,192
of ownership housing has been quite low and remain so.

889
01:10:47,192 --> 01:10:49,671
So I can corroborate his data with my own.

890
01:10:50,079 --> 01:11:06,079
Um, let's look at declining affordable home ownership. Now, I'm looking at all ownership options in Snohomish County from 2000 to 2025 year and how many homes of any type from single family down to a mobile home park home sold for less than $100,000 again adjusted for inflation.

891
01:11:10,752 --> 01:11:17,311
You go to $200,000 to 300, 000, 300 to 400, 00, dollars of sales, you start to see a

892
01:11:17,311 --> 01:11:21,952
story emerge when your 10,00 units sold in the year 2000 were well below that number

893
01:11:22,832 --> 01:11:32,832
in 2025. We continue with 10 groups of sale price up to 900,0000 to one million dollar homes,

894
01:11:32,832 --> 01:11:36,591
a story emerges that we are selling the same number of homes

895
01:11:37,296 --> 01:11:42,855
Today, as we were in the depths of the recession and the wake of a great financial crisis,

896
01:11:42,855 --> 01:11:47,536
and there were reasons to this for time that I won't go into in detail, but certainly it

897
01:11:47,536 --> 01:11:50,895
is a struggle to find a place to buy a period.

898
01:11:50,895 --> 01:11:56,176
And also the makeup through the lens of sale price of these homes has changed dramatically.

899
01:11:56,176 --> 01:12:00,216
The final piece of puzzle is homes that sell for over $1 million in red at the top of

900
01:12:00,216 --> 01:12:05,216
the bar chart.

901
01:12:01,119 --> 01:12:05,079
that today 20% of everything that you can own

902
01:12:05,079 --> 01:12:09,600
in Snohomish County sells for over $1 million, everything.

903
01:12:09,600 --> 01:12:11,079
This is data from the county assessor.

904
01:12:11,079 --> 01:12:13,520
It is a true census of every single sale

905
01:12:13,520 --> 01:12:16,640
of any property in all of Snuhomich County.

906
01:12:17,680 --> 01:12:22,720
So this is an ancillary to the proceeding slide.

907
01:12:22,720 --> 01:12:24,159
Let's look at who can afford it.

908
01:12:24,159 --> 01:12:26,399
In the Seattle Metro, Snhomuch, King, Pierce County,

909
01:12:26,399 --> 01:12:30,000
how many workers make over 240,000 dollars?

910
01:12:29,935 --> 01:12:34,975
216 to $240,000 in their current occupation, the median wage for their

911
01:12:34,975 --> 01:12:40,655
current occupations is in this band of income. And we go down the scale to the

912
01:12:40,655 --> 01:12:45,615
final piece, about $57,00 a year. This is not what everybody makes.

913
01:12:45,615 --> 01:12:48,735
This if you stick in your current profession, this is what you will make

914
01:12:48,735 --> 01:12:51,935
in the middle of your profession. It's from the Bureau of Labor Statistics,

915
01:12:55,119 --> 01:13:06,119
This data is from 2025. Let's look at the, uh, you must be this tall to ride line for 2025 force in how much county single family homes require one eighty eight hundred and eighty thousand dollars of household income.

916
01:13:06,119 --> 01:13:14,119
You see the rest down to apartments. If you don't want to pay more than 30% of your income for the average apartment is in the homeless county. You need to make this much.

917
01:13:14,119 --> 01:13:16,119
Only less than 2%

918
01:13:23,488 --> 01:13:26,368
if you open it up to town homes and condominiums of which they are very few.

919
01:13:27,007 --> 01:13:29,728
Only 40 percent of the region's workforce could afford to rent

920
01:13:29,728 --> 01:13:34,847
affordably something somewhere in Snohomish County. You may be renting in Stanwood and driving

921
01:13:34,847 --> 01:13:39,488
all the way to Seattle where your job is, but you can rent it affordly. In any case,

922
01:13:39,488 --> 01:13:42,847
about 60 percent or 1.2 million people in the Seattle metro could

923
01:13:42,847 --> 01:13:47,167
afford it to do neither of those things on their own. But dual income, yes indeed,

924
01:13:52,688 --> 01:13:55,307
Even combining incomes of two incomes

925
01:13:55,307 --> 01:13:57,707
of $57,000 in the middle of your career

926
01:13:57,707 --> 01:13:59,828
in your 30s and 40s, you will be able

927
01:13:59,828 --> 01:14:00,667
to rent affordably,

928
01:14:00,667 --> 01:14:02,347
you'll not be to own anything.

929
01:14:02,347 --> 01:14:03,307
This is the rent trap.

930
01:14:03,307 --> 01:14:05,387
This the proof of the put proof

931
01:14:05,387 --> 01:14:07,868
in that statement of rental trap,

932
01:14:07,868 --> 01:14:09,148
rounding out my presentation.

933
01:14:09,148 --> 01:14:10,667
What has this done to the workforce?

934
01:14:10,667 --> 01:14:12,467
Where does the work force live?

935
01:14:12,467 --> 01:14:14,387
In Snohomish County,

936
01:14:14,387 --> 01:14:17,228
going from a cardinal directions on the x-axis

937
01:14:17,228 --> 01:14:18,707
and the number of people on

938
01:14:19,391 --> 01:14:23,372
Why access the less than 10 mile trips. This is how many people?

939
01:14:24,431 --> 01:14:28,471
New people we added just in how much counties workforce the people that are working there today

940
01:14:29,131 --> 01:14:32,851
Who are coming from less and 10 miles from where their home is to where there workplaces?

941
01:14:34,811 --> 01:14:40,152
You see the directions then 10 to 24 miles this is your 10-24 mile trip from home to work each way

942
01:14:40,731 --> 01:14:42,731
25 to 50 miles

943
01:14:42,731 --> 01:14:44,731
50 Miles or greater

944
01:14:44,815 --> 01:14:54,815
Two stories that I want to call out here in my remediating time is that we gained 6200 new workers that are coming to Snohomish County today from over 50 miles from the south.

945
01:14:54,815 --> 01:15:01,815
If you look at five south of Seattle and it's a parking lot, this is why because of the reverse commute has.

946
01:15:01,583 --> 01:15:03,884
not been such a reverse community anymore.

947
01:15:03,884 --> 01:15:06,123
The second thing that I'll call out is from the east.

948
01:15:06,123 --> 01:15:08,304
I'm looking at Senator Gaynor Wenatchee,

949
01:15:08,304 --> 01:15:10,444
Representative Burnett, who I spoke with

950
01:15:10,444 --> 01:15:12,703
and said, Chelan County is now a bedroom community.

951
01:15:12,703 --> 01:15:14,944
Everybody lives here and now trucks over the mountains.

952
01:15:14,944 --> 01:15:16,844
This is the proof of that data

953
01:15:16,844 --> 01:15:21,844
that 4,176 estimated new people are coming to work

954
01:15:21,844 --> 01:15:23,743
in Snohomish County from over

955
01:15:23,743 --> 01:15:26,944
the Cascade Mountains from Chelin County and other places.

956
01:15:26,944 --> 01:15:29,503
Again, there is more detailed information in the packet

957
01:15:31,087 --> 01:15:35,927
time. This is the impact of the presentation that you have seen today, much of which I

958
01:15:35,927 --> 01:15:40,047
agree with. I am available for questions, I welcome any opportunities to continue this

959
01:15:40,047 --> 01:15:44,927
discussion in more dynamic fashion. And thank you very much.

960
01:15:44,927 --> 01:15:49,568
Thank you, Chris, for that lightning round of pieces of information for us.

961
01:15:49,568 --> 01:15:52,648
I know that senators probably are processing. First up,

962
01:15:52,648 --> 01:15:54,568
I have Senator Alvarado. Please go.

963
01:15:55,695 --> 01:16:04,695
Thank you, Madam Chair and thanks Chris for that presentation. I think it really illustrates the housing gap at the lowest income level.

964
01:16:04,695 --> 01:16:10,695
And can we talk a little bit about we know that it takes something.

965
01:16:11,136 --> 01:16:15,235
to deliver housing for that majority population

966
01:16:15,235 --> 01:16:17,176
that is left out of the market.

967
01:16:17,176 --> 01:16:19,376
Can you talk a little bit about what you're seeing

968
01:16:19,376 --> 01:16:22,416
at the federal level and as a housing authority

969
01:16:22,416 --> 01:16:25,735
for the backbone of operating subsidy

970
01:16:25,735 --> 01:16:29,296
that it takes to make that housing available to folks?

971
01:16:29,296 --> 01:16:30,735
Yes, right now it's not how much county

972
01:16:30,735 --> 01:16:32,536
the main source of Operating Subsidies

973
01:16:32,536 --> 01:16:36,095
taking a Housing Choice voucher or a Section 8 voucher

974
01:16:36,095 --> 01:16:39,336
and assigning it to a specific unit, that unit.

975
01:16:39,216 --> 01:16:42,815
now has 70% of its rent paid by that voucher.

976
01:16:42,815 --> 01:16:47,775
There is a statutory limit on, for most housing authorities where they cannot

977
01:16:47,775 --> 01:16:50,176
project base, as it's called, over 20%

978
01:16:50,176 --> 01:16:53,695
of their voucher portfolio in physical units,

979
01:16:53,695 --> 01:16:56,815
where then the voucher is assigned again to a unit, not a household who can take it

980
01:16:56,815 --> 01:17:00,336
wherever they wish. There has been great discussion

981
01:17:04,431 --> 01:17:16,431
Allowing that that is right now. That is the source for operating subsidy. Other sources are few and far between and I would basically call them unicorns. I wish that I had better news, but that

982
01:17:16,431 --> 01:17:28,431
is a very difficult limit that we have as we look at our assignments, our goals of zero to 50% am I housing, even higher than that, perhaps.

983
01:17:35,279 --> 01:17:37,680
Thank you. Any other questions for Chris?

984
01:17:40,207 --> 01:17:41,707
I don't see any.

985
01:17:41,707 --> 01:17:43,988
Chris, I know that you gave us some appendices

986
01:17:43,988 --> 01:17:46,427
in your presentation, so that's available for folks.

987
01:17:46,427 --> 01:17:47,908
I knew that was a lot of information.

988
01:17:47,908 --> 01:17:50,028
One of the challenges we have is we wanna get

989
01:17:50,028 --> 01:17:51,868
a comprehensive overview of these topics,

990
01:17:51,868 --> 01:17:52,988
and I now that it can be hard,

991
01:17:52,988 --> 01:17:55,087
because you're getting a lotta information very quickly,

992
01:17:55,087 --> 01:17:57,188
but I do encourage folks to take a look at that,

993
01:17:57,188 --> 01:17:58,868
and then also reach out to Chris

994
01:17:58,868 --> 01:18:00,427
if you have follow-up questions.

995
01:18:00,427 --> 01:18:01,908
Chris thank you so much for your work,

996
01:18:01,908 --> 01:18:04,547
and your vast knowledge, and all of your advocacy.

997
01:18:04,547 --> 01:18:06,467
We really appreciate you being here.

998
01:18:06,467 --> 01:18:07,307
Thank you, sir.

999
01:18:07,307 --> 01:18:08,148
Thank-you.

1000
01:18:08,576 --> 01:18:14,015
Okay, and now we will move on to an overview of lending framework and financing barriers.

1001
01:18:14,015 --> 01:18:18,296
We've got a couple presenters who will be visiting us virtually.

1002
01:18:18,296 --> 01:18:23,015
Staff, do we have them ready on Zoom?

1003
01:18:23,015 --> 01:18:29,136
While you're getting them in the Zoom room, we've Don Costa, EVP, Chief Home Lending Officer

1004
01:18:29,136 --> 01:18:34,456
for First Security Bank and member of the Washington Mortgage Bankers Association.

1005
01:18:36,207 --> 01:18:41,207
Bradenburg, EVP, Chief Lending Officer of Cashmere Valley Bank and member of the Washington

1006
01:18:41,207 --> 01:18:43,207
Bakers Association.

1007
01:18:43,207 --> 01:18:46,207
All right, good morning.

1008
01:18:46,207 --> 01:18:49,207
Who would like to start?

1009
01:18:48,368 --> 01:18:55,167
My stuff's on the screen. So I guess I'll start. All right. You're in the mistake of responding to some questions from just a foot.

1010
01:18:55,167 --> 01:19:01,007
Jessica Worskew. And so here I am today. I'm not a professional at this, but I will do my best.

1011
01:19:01,007 --> 01:19:05,087
I just like to thank all the senators for the efforts here.

1012
01:19:05,087 --> 01:19:11,807
I want to say everybody for House Bill 1110, the ADU Bill 1337. It was really some great work.

1013
01:19:13,055 --> 01:19:16,655
And I want to thank the presenters ahead of me.

1014
01:19:16,655 --> 01:19:20,015
I know Matthew Gardner, so I wanted to give a shout out to him

1015
01:19:20,015 --> 01:19:22,416
and really appreciate the information he's given there.

1016
01:19:23,775 --> 01:19:28,095
Maybe I'd only add to Matthew's pieces if you think that it's been kind of dire

1017
01:19:28,095 --> 01:19:31,055
on the new construction building. I'll look right now.

1018
01:19:31,055 --> 01:19:32,735
I think you can, you know,

1019
01:19:32,735 --> 01:19:40,895
you haven't seen anything.

1020
01:19:34,496 --> 01:19:36,775
to about what you're gonna see really starting today

1021
01:19:36,775 --> 01:19:39,136
and maybe for the next six months.

1022
01:19:39,136 --> 01:19:41,615
I can tell you, we do two kinds of lending here.

1023
01:19:41,615 --> 01:19:44,615
We do spec lending, which is lending to builders,

1024
01:19:44,615 --> 01:19:47,055
which mostly what we spoke about so far.

1025
01:19:47,055 --> 01:19:49,256
And we also do custom construction lending

1026
01:19:49,256 --> 01:19:52,735
which if you wanted to have a home built by a builder,

1027
01:19:52,735 --> 01:19:55,456
we would lend you the money to do that.

1028
01:19:55,456 --> 01:19:58,296
Our business has taken a pretty dramatic downturn

1029
01:19:58,296 --> 01:20:01,095
over the last few months of the builders just saying,

1030
01:20:01,095 --> 01:20:02,536
we can't afford to build.

1031
01:20:03,823 --> 01:20:08,463
We're exiting this for now until some later date.

1032
01:20:08,463 --> 01:20:12,384
And I think there's going to be some pretty devastating consequences there.

1033
01:20:12,384 --> 01:20:17,823
Trying not to repeat stuff that everybody else and so many of the other people have said is I

1034
01:20:17,823 --> 01:20:23,743
think just time is money, time as risk. And what I would say is that I

1035
01:20:23,743 --> 01:20:29,264
think a fault in the building process is a sequential view of how it's done.

1036
01:20:33,695 --> 01:20:37,055
I develop. I ask for a bill need permit.

1037
01:20:37,055 --> 01:20:38,015
I build.

1038
01:20:38,239 --> 01:20:42,140
And I just think things can be done at the same time,

1039
01:20:42,140 --> 01:20:44,500
as opposed to one after the other.

1040
01:20:44,500 --> 01:20:47,100
And it could probably shorten the timeframe of build

1041
01:20:47,100 --> 01:20:49,340
to build maybe in half or more.

1042
01:20:49,340 --> 01:20:52,420
If there's anyone here representing Grace Harbor area,

1043
01:20:52,420 --> 01:20:54,060
I'd like to give them a shout out.

1044
01:20:54,060 --> 01:20:57,899
There's a really success story down that way called Seabrook.

1045
01:20:58,899 --> 01:21:01,420
They will actually allow a builder to get

1046
01:21:01,420 --> 01:21:05,260
their lots segregated during the development process.

1047
01:21:05,260 --> 01:21:06,859
They can actually start building homes

1048
01:21:07,792 --> 01:21:13,372
process and they're able to get homes built in a much more timely manner and I

1049
01:21:13,372 --> 01:21:17,652
only point that I point them out is that some county that maybe the committee

1050
01:21:17,652 --> 01:21:22,851
could look at to see the good things that that they are doing. I think another

1051
01:21:22,851 --> 01:21:29,152
challenge is as I've said is the cost of permitting is extremely expensive and

1052
01:21:29,152 --> 01:21:35,351
one of the things we just work on a five unit town home here for a builder.

1053
01:21:33,935 --> 01:21:50,935
And they decided to pass. This is in Seattle. It's a $1.2 million home as it sits today. The developer was putting five town homes on that project, each selling for about $800,000. So it's taking, you know, one home, making it five.

1054
01:22:03,439 --> 01:22:12,239
affordable housing and however there is a MHAF mandatory housing affordability fee that

1055
01:22:12,239 --> 01:22:18,159
builder would have to pay of $125,000 on top of everything else that they're paying and

1056
01:22:18,159 --> 01:22:22,520
it just made the project not feasible and the builder passed.

1057
01:22:27,712 --> 01:22:34,752
should probably be eliminated if you're in low land value areas which there are MHA fees

1058
01:22:34,752 --> 01:22:40,431
in the low-land value area and or maybe you've capped the sales price and say if

1059
01:22:40,431 --> 01:22:47,872
you were to keep your sales prices below a certain amount you will not have to pay these fees because

1060
01:22:47,872 --> 01:22:53,391
it doesn't make a lot of sense to paying you know low income housing fees on low

1061
01:22:57,904 --> 01:23:00,304
Next slide, modular housing.

1062
01:23:00,304 --> 01:23:05,463
I think one of the folks to talk spoke about that and we do modular

1063
01:23:05,463 --> 01:23:08,863
housing, so the rest of slides will be mostly custom construction.

1064
01:23:08,863 --> 01:23:11,304
This will not be developer or builder loans.

1065
01:23:11,304 --> 01:23:12,904
This'll be loans to consumers.

1066
01:23:12,904 --> 01:23:15,064
We provide modular

1067
01:23:15,064 --> 01:23:16,104
housing loans

1068
01:23:16,104 --> 01:23:21,144
to consumer. This is where consumer would want a modular home built for themselves.

1069
01:23:21,144 --> 01:23:23,304
We have some really nice financial,

1070
01:23:23,304 --> 01:23:25,783
modular housings treated just like a stick built home.

1071
01:23:25,783 --> 01:23:27,623
It's a great way to build a house.

1072
01:23:27,775 --> 01:23:32,576
I'm sorry. I've seen hands up. Do I need to? No, I mean, ask my committee members to wait.

1073
01:23:32,576 --> 01:23:35,176
We're just going to let you finish your slides and then we'll open up our questions.

1074
01:23:35,176 --> 01:23:35,935
But I got you guys.

1075
01:23:36,735 --> 01:23:42,775
We have some great financing for a consumer that wants to build a modular home.

1076
01:23:42,775 --> 01:23:46,775
They could come in with as little as three and a half percent down up front.

1077
01:23:46,775 --> 01:23:52,336
We will pay for the building costs through the loan and it actually works really well.

1078
01:23:52,336 --> 01:23:53,336
It is limited.

1079
01:23:53,336 --> 01:23:54,336
I'll say that.

1080
01:23:54,336 --> 01:23:57,256
We're one of the specialists in the state.

1081
01:23:57,256 --> 01:24:01,256
It's very much a bank or maybe credit union product because the interest rate risk for

1082
01:24:06,319 --> 01:24:08,619
We can handle that within our balance sheets,

1083
01:24:08,619 --> 01:24:11,899
but most blenders, just standard letters cannot do that.

1084
01:24:11,899 --> 01:24:14,500
So we love the product,

1085
01:24:14,500 --> 01:24:17,859
but we're fearful of the project, and here's why.

1086
01:24:18,939 --> 01:24:20,859
The hole was built in a factory.

1087
01:24:20,880 --> 01:24:26,800
And what happens is that some of the, the large manufacturer home dealers,

1088
01:24:26,800 --> 01:24:31,359
the mobile home dealer that say that have modular financing, not such a big deal.

1089
01:24:31,359 --> 01:24:37,159
But there are others who want significant deposits upfront from the consumer.

1090
01:24:37,159 --> 01:24:39,880
And they're building these home in a factory.

1091
01:24:39,880 --> 01:24:44,560
You can't tell what, you know, two by sixes are our borrowers, what?

1092
01:24:44,560 --> 01:24:48,279
Walls are borrowers versus other borrowers.

1093
01:24:49,296 --> 01:24:55,296
when you're advancing these funds, but there's nothing at the home site, you've had a lot of risk.

1094
01:24:55,296 --> 01:25:03,055
In some of these modular dealers will want up to half over time, half of the loan or the customer

1095
01:25:03,695 --> 01:25:08,015
funds to be paid to them before there is even one piece of wood at that house.

1096
01:25:08,975 --> 01:25:15,136
And so we have experienced some pretty devastating losses. We have in person our bank,

1097
01:25:16,735 --> 01:25:22,176
where they're having modular homes built, but unfortunately, the modular builder,

1098
01:25:23,216 --> 01:25:30,256
their finances weren't in line, and they ended up filing bankruptcy. And the bankruptcy court says,

1099
01:25:30,975 --> 01:25:35,775
we don't know what two by sixes are yours, borrower. We don t know that walls are yours.

1100
01:25:35,775 --> 01:25:41,855
I'm sorry, you're just out. In real extreme cases, we actually had one borrower who advanced

1101
01:25:44,543 --> 01:25:51,344
manifest this builder, modular builder and lost it all. And we've had a number of them happen that

1102
01:25:51,344 --> 01:25:57,904
way and so we're very, we will do these loans to some of the manufacturer home dealers,

1103
01:25:57,904 --> 01:26:03,184
but we'll worry about doing it to others because we have no idea what financial shape these dealers

1104
01:26:04,608 --> 01:26:08,688
And so I put a couple of recommendations down.

1105
01:26:08,688 --> 01:26:10,967
Maybe there's bill to performance bonds,

1106
01:26:10,967 --> 01:26:14,688
maybe requirements, maybe they're required

1107
01:26:14,688 --> 01:26:17,287
to maybe have escrow, the money in escrows,

1108
01:26:17,287 --> 01:26:21,408
and we can then, once the walls and stuff

1109
01:26:21,408 --> 01:26:23,648
are delivered to the site, we could fund off of there.

1110
01:26:23,648 --> 01:26:28,287
So that way we're going to identify what's their stuff.

1111
01:26:28,287 --> 01:26:30,728
And, you know, let's just.

1112
01:26:30,623 --> 01:26:34,703
in the factory itself, but it is a good product.

1113
01:26:34,703 --> 01:26:35,904
It does save money.

1114
01:26:35,904 --> 01:26:37,423
It's just a lot of risk with the way

1115
01:26:37,423 --> 01:26:39,463
that deposits are being handled.

1116
01:26:39,463 --> 01:26:41,463
Manufacturing housing, we're actually

1117
01:26:41,463 --> 01:26:43,104
the state's largest lender.

1118
01:26:43,104 --> 01:26:45,863
And you can see that the financing options,

1119
01:26:45,863 --> 01:26:49,743
we have VA financing, 3.5% down financing.

1120
01:26:49,743 --> 01:26:51,743
5% Down to Financing.

1121
01:26:51,984 --> 01:26:58,984
We have a great draw process in place that allows consumers to to come out of pocket with very little money

1122
01:26:58,984 --> 01:27:02,783
It is a really great product of keeping values low

1123
01:27:02,783 --> 01:27:09,463
I would say we mostly see it is as far as custom construction and go-ons go in the rural areas

1124
01:27:09,463 --> 01:27:14,304
I think I'd like to see maybe that this is only an opening up for maybe

1125
01:27:15,104 --> 01:27:18,184
Cities and instead of just allowing stick belt

1126
01:27:18,184 --> 01:27:21,503
Maybe they allow manufactured housing if you haven't been in a matter

1127
01:27:21,583 --> 01:27:28,304
factory house, late house home lately, you'd be shocked how nice some of them are and maybe a

1128
01:27:28,304 --> 01:27:34,304
lot of a more. So my recommendation would be to think about pushing on zoning where maybe

1129
01:27:34,304 --> 01:27:39,583
a double wide manufactured home, which looks very similar to a single family home would

1130
01:27:39,583 --> 01:27:48,064
be allowed in those different areas. And then regarding the ADU pieces, I would think the number

1131
01:27:49,391 --> 01:27:51,851
First of all, it is working and they are being built.

1132
01:27:51,851 --> 01:27:55,271
I think that's due to the house bill that was passed.

1133
01:27:55,271 --> 01:28:00,712
I do think you do have some municipalities that are fighting you if it was this committee.

1134
01:28:00,712 --> 01:28:07,072
They seem to come up with new coverage rules, tree ordinances, different things that basically

1135
01:28:07,072 --> 01:28:15,351
seems to be from a builder's perspective trying to reduce the amount of ADUs that were being

1136
01:28:15,351 --> 01:28:16,351
built in their cities.

1137
01:28:18,015 --> 01:28:24,595
And I think the number one thing I recommend is, is what's happening is is when you're

1138
01:28:24,595 --> 01:28:27,775
building these ADUs, you, to be,

1139
01:28:27,775 --> 01:28:31,435
you condominiumize the lot and to

1140
01:28:31,435 --> 01:28:33,796
be able to sell them individually.

1141
01:28:33,796 --> 01:28:40,515
The challenge was that condiment is a lot expensive and sometimes it limits

1142
01:28:40,515 --> 01:28:43,036
the financing that a borrower can get.

1143
01:28:43,036 --> 01:28:47,595
It also sometimes limits the numbers of ADU's that can be built on the home.

1144
01:28:47,631 --> 01:28:53,952
on the property. So, for instance, when you're doing a condaminomized type of ADU project,

1145
01:28:53,952 --> 01:29:00,112
you really don't want to go over three. Now, the ADu house bill allows up to six,

1146
01:29:00,112 --> 01:29:04,511
or the middle housing bill, allows us up six ADUs, but you won't wanna do that when

1147
01:29:04,511 --> 01:29:09,072
you are condaminomizing the lots, because you'll lose your financing that the consumers can have.

1148
01:29:13,872 --> 01:29:25,872
Change those into unit lot subdivisions where you're actually having just a standard lot and that just keeps the takeout financing wide open. There are no condo fees.

1149
01:29:25,872 --> 01:29:36,872
There's no, you know, all the costs that go into putting the homeowners associations together. All of the reviews that have to be done and you really getting to the same place.

1150
01:29:43,807 --> 01:29:46,307
I can, if I unit lot subdivision it, I

1151
01:29:46,307 --> 01:29:47,688
can sell the same house on the

1152
01:29:47,688 --> 01:29:49,747
same basically lot. And it's just

1153
01:29:49,747 --> 01:29:51,887
this legal definition that is a

1154
01:29:51,887 --> 01:29:54,047
differentiator that really makes it

1155
01:29:54,047 --> 01:29:56,448
difficult. What I like about the

1156
01:29:56,448 --> 01:29:58,608
unit lots subdivision, it covers both

1157
01:29:58,608 --> 01:30:02,368
the house bill 1110 and the 8u 1337.

1158
01:30:02,368 --> 01:30:04,728
You kind of kill two birds with one stone.

1159
01:30:05,328 --> 01:30:13,207
That's why thank you done. Thank you so much. All right. I'm gonna go to senator Gainerd followed by senator Alvarado senator gainer

1160
01:30:14,448 --> 01:30:16,448
Thank You madam chair, so

1161
01:30:18,087 --> 01:30:21,408
Don I did look up what the manufacturer and

1162
01:30:22,087 --> 01:30:24,047
For housing affordability.

1163
01:30:24,047 --> 01:30:31,007
I mean in other words, you're trying to make it more expensive by providing money for affordable housing

1164
01:30:32,688 --> 01:30:37,007
not so much on the manufacturer this was on that on

1165
01:30:37,007 --> 01:30:39,228
the mandatory housing. Oh yeah, mandatory

1166
01:30:39,228 --> 01:30:41,448
housing you're making it more expensive even

1167
01:30:41,448 --> 01:30:44,807
affordable homes to support affordable

1168
01:30:44,807 --> 01:30:47,448
homes. Okay, I just when I looked up what it

1169
01:30:47,448 --> 01:30:49,927
was. That was my application. Yes. All right.

1170
01:30:49,927 --> 01:30:53,807
Thank you. Senator Alvarado. Thank

1171
01:30:53,807 --> 01:30:54,807
you

1172
01:30:55,199 --> 01:31:00,800
It's interesting that you brought up mandatory housing affordability. It is the City of Seattle's

1173
01:31:00,800 --> 01:31:07,279
second most effective program at building housing for low-income people and had built

1174
01:31:08,800 --> 01:31:12,720
3,600 homes with 5,000 in the pipeline.

1175
01:31:14,159 --> 01:31:19,840
It also interesting you that brought it up from a banker's perspective because of all of the costs

1176
01:31:22,079 --> 01:31:28,800
known and predictable cost that hasn't changed over many years. I'm wondering if you can talk a

1177
01:31:28,800 --> 01:31:36,479
little bit more about other costs, whether the cost of capital or investor appetite,

1178
01:31:36,479 --> 01:31:43,760
other things that are actually fluctuating and changing project viability. Because again,

1179
01:31:43,760 --> 01:31:49,199
that one affordability program has been baked into the code for many

1180
01:31:51,376 --> 01:31:56,095
I agree. This is a affordable housing in our state. Yeah, I'd agree it's just that I think that

1181
01:31:56,095 --> 01:32:03,216
I would recommend that maybe there's a cap on a price cap that it instead of doing it on

1182
01:32:03,216 --> 01:32:10,336
a $500,000 home, for example, which is affordable, housing is maybe it starts that that comes in when

1183
01:32:10,336 --> 01:32:15,216
that's $1 million home or a nine hundred thousand dollar home. It just seems kind of, you know,

1184
01:32:21,231 --> 01:32:29,372
And it could have gone up and we provide, you know, the five more unit for more units. So that was it. I don't think get rid of it, but

1185
01:32:30,528 --> 01:32:34,608
I would just say the biggest cost is time,

1186
01:32:34,608 --> 01:32:36,568
and then time is risk, you know,

1187
01:32:36,568 --> 01:32:37,768
because all of a sudden you think

1188
01:32:37,768 --> 01:32:39,927
you're going into one market versus the other.

1189
01:32:39,927 --> 01:32:43,007
I think there are a lot of permitting fees,

1190
01:32:43,007 --> 01:32:44,368
sewer connection fees.

1191
01:32:44,368 --> 01:32:46,768
Sometimes the city will say,

1192
01:32:46,768 --> 01:32:49,087
you can't connect where you are at today

1193
01:32:49,087 --> 01:32:51,448
and it's 25 feet off the property.

1194
01:32:51,448 --> 01:32:54,648
We're gonna want a line improvement of 110 feet.

1195
01:32:54,768 --> 01:32:59,648
on the other side for you to be able to connect to water.

1196
01:32:59,648 --> 01:33:01,807
There's a lot of times there's delays of months

1197
01:33:01,807 --> 01:33:05,528
on a completed home where the utilities folks aren't able

1198
01:33:05,528 --> 01:33:08,448
to get out and get that utilities connected.

1199
01:33:08,448 --> 01:33:11,328
And just it's just really on that timing delays.

1200
01:33:11,328 --> 01:33:15,368
Yeah, the permitting fees are somewhat kind of well known

1201
01:33:15,368 --> 01:33:17,047
to, you know, and you kind

1202
01:33:17,047 --> 01:33:18,608
of know what you're going into there.

1203
01:33:18,608 --> 01:33:22,127
I would say the thing would be is, for instance,

1204
01:33:22,271 --> 01:33:27,712
sidewalk improvements. There was no sidewalk there to begin with, and now they want a sidewalk,

1205
01:33:27,712 --> 01:33:36,032
and that 100% of that cost is applied to that builder slash that owner, whereas that sidewalk

1206
01:33:36,032 --> 01:33:41,311
I would argue will be used by many. And I think clearly improvements you see, I

1207
01:33:41,311 --> 01:33:46,112
would think some of those costs could be maybe shared by the community as opposed to being taxed

1208
01:33:51,216 --> 01:33:56,136
Thank you. I actually do have a bill on the sidewalk permitted thing. My question is

1209
01:33:56,496 --> 01:34:03,655
You mentioned Seabrick is able they were able to build during the application process somehow. It could you expand on it?

1210
01:34:03,695 --> 01:34:08,775
Yeah, basically what they seem to allow allowing him to do is kind of work

1211
01:34:09,095 --> 01:34:14,456
You know the building and the development all happen in kind more at the same time

1212
01:34:14,935 --> 01:34:20,095
So what happens is is they are letting them get they've got their development permit

1213
01:34:20,815 --> 01:34:27,376
and then instead of making them finish the last sidewalk and the whole development process,

1214
01:34:27,376 --> 01:34:33,296
for example, they're saying it's close enough now that we're going to allow you to segregate

1215
01:34:33,296 --> 01:34:39,615
it into lots. And then at the same time, we'll allow to get a building permit and actually start

1216
01:34:39,615 --> 01:34:45,855
building, even though the development project isn't completely signed off. So they are shorting

1217
01:34:50,863 --> 01:34:51,863
Thank you.

1218
01:34:51,863 --> 01:34:52,863
Thank You.

1219
01:34:52,863 --> 01:34:57,663
Well, thank you so much, Don, for kind of lifting up the lid on the financing side of

1220
01:34:57,663 --> 01:34:58,663
this.

1221
01:34:58,663 --> 01:35:02,224
It's not something that we typically delve deeply into in the housing committee, but

1222
01:35:02,224 --> 01:35:06,423
it is something obviously linked and important for us to understand.

1223
01:35:06,423 --> 01:35:08,684
I know it was just an overview.

1224
01:35:08,684 --> 01:35:12,543
We could learn a lot more, and I do appreciate your insight and being taking time out of

1225
01:35:12,543 --> 01:35:20,703
your data talk to us, so you can tell Jessica Fortesky that you did a good job.

1226
01:35:16,448 --> 01:35:33,448
Yeah, you can do whatever you would like. We have another speaker who's going to talk about financing. So you are welcome to sit in and listen to that conversation. Okay. Thank you, Don. And with that, we will hear from Steve from cashmere Valley Bank.

1227
01:35:33,448 --> 01:35:36,448
Thank You Steve for joining us as well. Please proceed.

1228
01:35:42,944 --> 01:35:48,543
go over to top of what Don had to add on financing and the difficulties between

1229
01:35:48,543 --> 01:35:54,184
around the 80 moose and with lots of our homes. I can hit some top top line

1230
01:35:54,184 --> 01:35:57,463
numbers about like mortgage production estate, but I'm not sure that's exactly

1231
01:35:57,463 --> 01:36:01,423
what we need to be looking for in this moment. So I kind of leave that up to

1232
01:36:01,423 --> 01:36:04,384
you, Madam Chair, if you want to hear those numbers or if

1233
01:36:04,384 --> 01:36:07,264
you just want a press on.

1234
01:36:05,680 --> 01:36:15,880
Um, sure, some of those top line numbers and then I thought it was interesting, the financing challenges around factory built. If you have anything to add on that, that would be useful.

1235
01:36:16,399 --> 01:36:16,920
The,

1236
01:36:18,239 --> 01:36:34,720
The having to fund on the factory bill, so having some fun on 30, 40%, but we told them out and have no improvements on a lot. It's, it's just not something of traditional construction financing ever really anticipated.

1237
01:36:35,119 --> 01:36:44,119
And you can develop a program around it, but the regulators, you know, pretty high scrutiny on that.

1238
01:36:44,119 --> 01:36:50,119
And rightly so, because, like, on said, we can't have a builder in the Midwest have

1239
01:36:50,119 --> 01:36:56,119
a factory that goes bankrupt or say by a tornado and you've got really no.

1240
01:36:56,119 --> 01:37:00,119
So it's, it is a risk for the bank.

1241
01:37:00,463 --> 01:37:07,264
Is it possible to have like an insurance that the factory belt can cover a certain cost or a

1242
01:37:07,264 --> 01:37:10,463
lean on the property? Is there any? I don't have a lean

1243
01:37:10,463 --> 01:37:16,384
on a property, but you've only got the value of a bird and you could have if you got, you know,

1244
01:37:16,384 --> 01:37:23,184
we've got a billion dollars, $100,000, like you run, funded $150, or $200, 000 to get the

1245
01:37:28,688 --> 01:37:35,688
actual flower after the event and you have that's what I understand.

1246
01:37:35,688 --> 01:37:45,387
And then could you get any, could require them to have some version of builder risk, maybe, but they probably will just go to the next test.

1247
01:37:45,387 --> 01:37:47,887
It was, it was bank doesn't require.

1248
01:37:47,887 --> 01:37:49,087
Sure.

1249
01:37:49,087 --> 01:37:54,188
Okay, and then any top line trends that you had that. You're seeing in your community.

1250
01:37:54,479 --> 01:38:00,079
And then I'll have to Senator Gaynor if he has any specific questions because I know you're in his neck of the woods.

1251
01:38:00,079 --> 01:38:02,720
But yeah, we hear a hometown, I see him all the time in the school dance.

1252
01:38:03,680 --> 01:38:04,479
How are you serving?

1253
01:38:08,000 --> 01:38:12,880
If we just want to talk 2025, this top high level mortgage origination data.

1254
01:38:15,279 --> 01:38:19,600
There were 175,441 mortgages originally in Washington.

1255
01:38:21,072 --> 01:38:28,072
of them, 78,515 were for a principal residence purchase.

1256
01:38:28,072 --> 01:38:33,072
So, and the other ones are broken out, cash out home improvements.

1257
01:38:33,072 --> 01:38:38,072
You know, we finance the system long, not a lot of activity like that.

1258
01:38:38,072 --> 01:38:40,072
People have went wrong with 3% noise.

1259
01:38:40,072 --> 01:38:41,072
So.

1260
01:38:41,952 --> 01:38:49,952
The banking sector is meeting the needs of the people who can't qualify and talk a lot about the affordable benefits.

1261
01:38:49,952 --> 01:38:52,952
And we have the same challenge.

1262
01:38:52,952 --> 01:38:57,952
We're showing them does this, which is where we went for principle that that everybody else had.

1263
01:38:57,952 --> 01:39:05,952
You have to earn 20 30 40% over the way into accounting to do a little for the moving sale price home.

1264
01:39:05,952 --> 01:39:09,952
And both prices are up 5%.

1265
01:39:09,904 --> 01:39:17,764
for 2025 or 2026 and that 5% is enough to permanently price the median wage

1266
01:39:17,764 --> 01:39:24,024
or a completely out of everyone. So we're very cognizant of that. Are you

1267
01:39:24,024 --> 01:39:27,984
seeing any trends? Oh I have Senator Gaynor. Senator

1268
01:39:27,984 --> 01:39:31,463
Gayner go ahead and then I'll ask my question.

1269
01:39:30,832 --> 01:39:41,832
Thank you, Madam Chair, and see if I was just going to, I think you're kind of touching on what we've had the discussion before about how people are getting priced out of the market. I mean, just the slight increases.

1270
01:39:41,832 --> 01:39:54,832
How many people or once again, you know, left out, of, the, uh, purchasing opportunity. So do you want to talk to some of trends that you are seeing, like, in and around the.

1271
01:40:00,416 --> 01:40:14,416
So, again, Flint County, we have some very expensive land because there's very little other private lands. So there is land values for building law almost double here, which can be in Franklin and Benton County.

1272
01:40:21,311 --> 01:40:33,311
So what it when is available is expensive and then we're in primarily agriculture based economy show the median household income for trying to count according to the Census Bureau is just over 99,000.

1273
01:40:33,311 --> 01:40:40,311
We have to make a hundred and fifty two thousand dollars to be able to afford the medium sales price from.

1274
01:40:40,311 --> 01:40:44,311
So there is a vast.

1275
01:40:44,311 --> 01:40:45,311
Yeah, I mean.

1276
01:40:45,311 --> 01:40:49,311
It's, and it's there as from the banking sector you're okay.

1277
01:40:50,159 --> 01:41:02,159
50 year mortgage book at today's rates that literally only drops the payment by about $400, but the individual that's not enough to help.

1278
01:41:02,159 --> 01:41:09,159
So it's, you know, when we talk last year Keith and I watch it through that presentation.

1279
01:41:16,384 --> 01:41:20,064
There's nothing we're going to do about in the ground available land shrine town.

1280
01:41:20,064 --> 01:41:22,944
It's, I mean, the Forest Service isn't going about that forest,

1281
01:41:22,944 --> 01:41:27,904
and we should make. So it's in all of everything that grows, you know.

1282
01:41:28,703 --> 01:41:32,783
More flexible term for the bank and sector sure, but they just end up

1283
01:41:33,984 --> 01:41:37,984
locking those people in between two or three times in interest over 50 years of what they

1284
01:41:41,551 --> 01:41:46,551
It needs to be in all of everyone who has tried to address some of these.

1285
01:41:46,551 --> 01:41:51,551
Some of them are so structural, they may not be an offensive.

1286
01:41:51,551 --> 01:41:54,551
Any other questions from committee members?

1287
01:41:54,551 --> 01:41:57,551
All right. Now I'll ask mine.

1288
01:41:57,551 --> 01:42:00,551
Are you seeing and maybe you can't elaborate on this,

1289
01:42:00,551 --> 01:42:04,551
but one of the presenters before you talked about more people on the east side of

1290
01:42:04,551 --> 01:42:07,551
the mountains buying and then commuting.

1291
01:42:08,176 --> 01:42:15,935
Longer distances for works. Are you seeing folks that are kind of coming from outside of your area to buy and actually having to commute?

1292
01:42:16,895 --> 01:42:23,216
People landing here usually are working fully remote. That's more, but could it task counting?

1293
01:42:23,216 --> 01:42:25,216
You know, Rosalinda Bay? Okay.

1294
01:42:26,095 --> 01:42:29,055
It's, I mean, it's two hours and ten minutes down from Seattle.

1295
01:42:29,456 --> 01:42:35,296
Thank you, that's all for the good day. Yeah. But it, you know it was closer to 75 minutes to happy minutes.

1296
01:42:37,072 --> 01:42:39,072
Okay.

1297
01:42:39,072 --> 01:42:43,072
Okay, we have a presence over there, and we are seeing it.

1298
01:42:43,072 --> 01:42:48,072
I have approved loans for people that work in downtown Seattle.

1299
01:42:48,072 --> 01:42:49,072
Yeah.

1300
01:42:49,072 --> 01:42:50,072
I'm in residence.

1301
01:42:50,072 --> 01:42:52,072
We play all around for someone.

1302
01:42:52,072 --> 01:42:53,072
And then those are people

1303
01:42:53,072 --> 01:42:57,072
that potentially could have incomes reflected of the county King County

1304
01:42:57,072 --> 01:43:02,072
and be able to be meet the loan requirements for a home in your area,

1305
01:43:02,072 --> 01:43:06,072
which will then put pressure on your community members who are being priced out.

1306
01:43:06,623 --> 01:43:13,184
as well so okay well thank you for sharing that overview and that information was nice to have

1307
01:43:13,184 --> 01:43:17,743
the committee be able to just ask some questions of you so we appreciate that and thank

1308
01:43:17,743 --> 01:43:22,064
you both panelists on this topic oh senator gainer did you have one last question

1309
01:43:23,264 --> 01:43:28,463
actually if i could just add a comment you know what we've seen in our area that some of the

1310
01:43:34,239 --> 01:43:40,079
complicates that the housing availability issue. That's one of the bigger issues that even like

1311
01:43:40,079 --> 01:43:46,239
I know Leavenworth is a big place where a number of people have come that they're consuming homes

1312
01:43:46,239 --> 01:43:52,079
without you know taking basically taking them off the market for for locals. So that's probably

1313
01:43:52,079 --> 01:43:59,199
more of an impact that we're seeing because people do have the money but not from the affordable

1314
01:44:03,184 --> 01:44:10,184
Okay, well, thank you again, and we will move to our next speaker who is Lauren McGowan.

1315
01:44:10,184 --> 01:44:15,184
She's the Executive Director of the Local Initiative Support Corporation.

1316
01:44:15,184 --> 01:44:18,184
Is she available? Oh, you're here in person.

1317
01:44:18,184 --> 01:44:21,184
Hello, Lauren. Thank you so much for being here.

1318
01:44:21,184 --> 01:44:26,184
Awesome. Thanks, Madam Chair, members of The Committee.

1319
01:44:26,184 --> 01:44:30,184
Again, my name is Laura McGown, Executive director of LISC.

1320
01:44:30,511 --> 01:44:36,511
Elisk is a national community development organization and CDFI, and we work here in Washington to

1321
01:44:36,511 --> 01:44:42,192
accelerate housing and economic justice. As you've heard from all of our panelists today,

1322
01:44:42,752 --> 01:44:47,391
we all know there's a huge need for more affordable housing, more funding is needed,

1323
01:44:47,391 --> 01:44:52,992
and face extraordinary challenges, particularly coming from the federal level right now.

1324
01:44:53,199 --> 01:44:59,439
And so today I want to talk a little bit about some of the ways that we are working directly

1325
01:44:59,439 --> 01:45:06,600
to increase the capacity of developers on the ground to really leverage many of

1326
01:45:06,600 --> 01:45:09,760
the policies you all have passed in recent years.

1327
01:45:14,032 --> 01:45:17,271
absolutely need more funding to do this work.

1328
01:45:17,271 --> 01:45:22,752
And we think that there are some bridges and tools

1329
01:45:22,752 --> 01:45:25,992
that we can use to better link and connect the dots

1330
01:45:25,992 --> 01:45:30,551
between all of the work that is being done across the state.

1331
01:45:30,551 --> 01:45:31,952
One of ways that, we have seen this

1332
01:45:31,952 --> 01:45:33,712
work happen is through, what we call,

1333
01:45:33,712 --> 01:45:35,671
the list housing accelerator.

1334
01:45:35,671 --> 01:45:38,511
It's a partnership with the Amazon Housing Fund

1335
01:45:38,511 --> 01:45:43,992
to support emerging for-profit and nonprofit developers.

1336
01:45:43,855 --> 01:45:50,336
It's an 18-month-long fellowship program that provides deep technical assistance combined

1337
01:45:50,336 --> 01:45:53,895
with access to low-cost capital.

1338
01:45:53,895 --> 01:46:00,855
And from this project, we have seen more than 50 organizations and fellows come through

1339
01:46:00,855 --> 01:46:07,456
accessing over $18 million, thousands of hours of training, and most importantly, more

1340
01:46:13,184 --> 01:46:17,984
Perhaps most importantly from this though is what we have seen is it is not just our emerging

1341
01:46:17,984 --> 01:46:26,623
developers. It is our housing ecosystem that really requires us to think better and in a more

1342
01:46:26,623 --> 01:46:30,944
coordinated way about what folks need.

1343
01:46:31,231 --> 01:46:37,351
Oftentimes what we're seeing with these developers is really well-intentioned policies and funding

1344
01:46:38,231 --> 01:46:42,952
Get into the hands of folks early on but often a project gets stuck

1345
01:46:42,952 --> 01:46:49,712
So that could look like a college or a church that has land but doesn't know how to turn it into housing a

1346
01:46:49,992 --> 01:46:52,952
Project that is a public award, but may not be able to

1347
01:46:53,231 --> 01:46:57,631
access that award and that cash for many months.

1348
01:46:57,631 --> 01:47:02,671
A balance sheet of a developer that is unable to really

1349
01:47:02,671 --> 01:47:09,712
show a lender that they are able to build and be trustworthy

1350
01:47:09,712 --> 01:47:12,112
of additional financing.

1351
01:47:12,112 --> 01:47:13,872
So there's just a ton of barriers,

1352
01:47:13,872 --> 01:47:16,431
both in the project side, as well as

1353
01:47:16,431 --> 01:47:20,152
in organizational side that oftentimes getting in

1354
01:47:20,152 --> 01:47:21,152
the way.

1355
01:47:21,296 --> 01:47:27,296
This is where technical assistance, capacity building and really creative financing tools

1356
01:47:27,296 --> 01:47:32,895
can come into play to help accelerate housing production across our state.

1357
01:47:33,904 --> 01:47:40,904
So, you know, again, bottom line, we need more funding and we all recognize the environment that we're in.

1358
01:47:40,904 --> 01:47:44,904
So a few things that believe we can do together.

1359
01:47:44,904 --> 01:47:48,904
One is to turn more land into housing.

1360
01:47:48,904 --> 01:47:53,904
We all know that there's been a lot of work around faith-based organizations to do that.

1361
01:47:53,904 --> 01:47:59,904
The state legislature commissioned a report for community colleges a

1362
01:47:59,904 --> 01:48:02,904
few years back to look at how to use their land.

1363
01:48:03,503 --> 01:48:09,623
And the reality is there are opportunities, but we need to make the connections between

1364
01:48:09,623 --> 01:48:11,703
those land opportunities.

1365
01:48:11,703 --> 01:48:17,823
The developers who have the ability to develop that land and the financing.

1366
01:48:17,823 --> 01:48:22,623
And that's where CDFIs and intermediaries like a list or an enterprise can really help

1367
01:48:22,623 --> 01:48:25,184
to bridge some of those barriers.

1368
01:48:25,184 --> 01:48:26,304
But we've got to fund it.

1369
01:48:26,304 --> 01:48:31,743
We've gotta be able to, make that work happen so that we're not just leaving promising

1370
01:48:32,720 --> 01:48:40,279
on the table. We need to make sure that we are keeping funded projects moving. You heard

1371
01:48:40,279 --> 01:48:47,239
earlier from Ryan Habitat about projects maybe getting an initial appropriation but taking

1372
01:48:49,712 --> 01:48:54,551
In the meantime, there's so much work that needs to be done.

1373
01:48:54,551 --> 01:48:56,792
There's costs that are incurred.

1374
01:48:56,792 --> 01:48:59,952
So we've got to do more, not only to coordinate,

1375
01:48:59,952 --> 01:49:02,912
but to ensure that if one piece of the funding puzzle

1376
01:49:02,912 --> 01:49:08,112
is there, that we're able to leverage other pieces.

1377
01:49:08,112 --> 01:49:11,792
As a CDFI at LISC, we have access to national capital

1378
01:49:11,792 --> 01:49:13,471
that can bring into Washington, and we

1379
01:49:13,471 --> 01:49:15,231
want to bring in to Washington.

1380
01:49:18,992 --> 01:49:23,992
to leverage that with the local funding that exists.

1381
01:49:24,591 --> 01:49:28,431
Simply for things like we don't have contracts in place

1382
01:49:28,431 --> 01:49:30,231
through some of our state agencies.

1383
01:49:30,231 --> 01:49:34,551
So there are ways even without significant additional funds

1384
01:49:34,551 --> 01:49:37,712
that we can keep projects moving faster.

1385
01:49:38,591 --> 01:49:41,192
We need to invest in developers and in the owners.

1386
01:49:41,192 --> 01:49:43,792
Yes, we need more land.

1387
01:49:43,792 --> 01:49:47,391
Yes we needed access to additional resources.

1388
01:49:47,823 --> 01:49:55,184
our ecosystem really requires that we continue to invest in both the nonprofit and for-profit

1389
01:49:55,184 --> 01:49:58,783
mission-aligned developers. One of the things that that

1390
01:49:58,783 --> 01:50:03,984
we are seeing is that, we've got a lot of folks who have been developing for a long time who are

1391
01:50:03,984 --> 01:50:09,823
really struggling with their portfolios and so looking at how we do asset management

1392
01:50:17,136 --> 01:50:24,336
a healthy ecosystem and more housing on the ground is really essential.

1393
01:50:24,735 --> 01:50:27,496
As I mentioned, there are private dollars out there.

1394
01:50:27,496 --> 01:50:30,095
We've got to do more to link the public and private sectors

1395
01:50:30,095 --> 01:50:35,015
together to leverage the funding that exists.

1396
01:50:35,015 --> 01:50:37,176
And then, as you've heard from some of my colleagues,

1397
01:50:37,176 --> 01:50:39,055
really thinking about some

1398
01:50:39,055 --> 01:50:41,456
of the ways in which we provide additional

1399
01:50:41,456 --> 01:50:45,615
down-to-payment assistance and long-term subsidies

1400
01:50:45,615 --> 01:50:49,416
for the lowest-income earners is super essential.

1401
01:50:50,688 --> 01:50:53,387
A lot of this is about connecting the dots, right?

1402
01:50:53,387 --> 01:50:56,948
How do we take training that is happening

1403
01:50:56,948 --> 01:50:58,307
in one part of the state and ensure

1404
01:50:58,307 --> 01:51:00,148
it's happening in other parts?

1405
01:51:00,148 --> 01:51:05,068
How we look at the land and opportunities that exist

1406
01:51:05,068 --> 01:51:07,387
where maybe we've written a report as a state,

1407
01:51:07,387 --> 01:51:11,268
we have outlined what the capacity issues are.

1408
01:51:11,268 --> 01:51:13,667
We've got to act on some of those things.

1409
01:51:15,087 --> 01:51:17,847
Many of you have heard about the Black Home Initiative,

1410
01:51:17,847 --> 01:51:20,608
a model in the Puget Sound region,

1411
01:51:20,608 --> 01:51:24,448
that is really brought together a lot of the ecosystem partners.

1412
01:51:24,448 --> 01:51:26,728
We've had a lotta learnings through that,

1413
01:51:26,728 --> 01:51:30,448
and one of them is that building

1414
01:51:30,448 --> 01:51:35,408
a deeply affordable home ownership projects is challenging,

1415
01:51:35,408 --> 01:51:36,807
but it's not impossible.

1416
01:51:36,807 --> 01:51:39,047
It's about bringing those partners together,

1417
01:51:39,047 --> 01:51:44,127
connecting the dots, and then leveraging the capital that exists.

1418
01:51:44,832 --> 01:51:47,511
That can be done in a number of ways.

1419
01:51:47,511 --> 01:51:51,032
Thinking about where we can better use

1420
01:51:51,032 --> 01:51:54,351
revolving loan funds, guarantees,

1421
01:51:54,351 --> 01:51:57,192
and flexible financing is something that

1422
01:51:57,192 --> 01:51:59,431
we're thinking about every day in order to

1423
01:51:59,431 --> 01:52:01,872
unlock some of the capital that exists

1424
01:52:01,872 --> 01:52:06,872
and we'd be really happy to talk to members of this committee

1425
01:52:06,912 --> 01:52:09,112
and others to think about how we do that in

1426
01:52:09,112 --> 01:52:11,912
a more scaled way so that we

1427
01:52:11,912 --> 01:52:13,192
can begin to meet some

1428
01:52:14,384 --> 01:52:19,064
goals. You all have done a lot. We've got a

1429
01:52:19,064 --> 01:52:24,863
lot more work to do. The challenge is coming from the federal level cannot be

1430
01:52:24,863 --> 01:52:30,583
understated and yet this is one of the regions that has the smartest and most

1431
01:52:30,583 --> 01:52:36,123
talented people in the country and so I feel

1432
01:52:36,368 --> 01:52:40,207
you know, deeply passionate about how we connect these dots,

1433
01:52:40,207 --> 01:52:44,368
bring people together, really unlock the opportunities that currently exist.

1434
01:52:45,408 --> 01:52:51,328
Thank you. Thank You Lauren. Do we have any questions from committee members

1435
01:52:51,887 --> 01:52:57,967
of the few that we left? No? Okay.

1436
01:52:57,967 --> 01:52:59,648
Well, thank you so much for your time.

1437
01:52:59,648 --> 01:53:01,087
Thank you for being here today.

1438
01:53:01,087 --> 01:53:02,967
I want to thank all the staff that are here,

1439
01:53:02,967 --> 01:53:05,967
making this meeting happen for all of you there, virtual.

1440
01:53:05,967 --> 01:53:08,287
We want just thank them that we have a full house here

1441
01:53:08,287 --> 01:53:09,608
in person in the room.

1442
01:53:09,608 --> 01:53:12,287
And thank for my committee members that were able to attend.

1443
01:53:12,287 --> 01:53:15,167
I hope that this was informative and educational.

1444
01:53:15,167 --> 01:53:18,568
And I know some of it was very fast to do appreciate that.

1445
01:53:18,568 --> 01:53:21,287
But I look forward to seeing you in-person

1446
01:53:21,287 --> 01:53:24,728
and for the rest of that, we are adjourned.

1447
01:53:24,728 --> 01:53:25,568
Thank-you.