Chelan weighs $50,000 annual limit for affordable housing grants

CHELAN — Chelan is considering making up to $50,000 available for affordable housing grants this year as the city overhauls its policy for distributing money from its Affordable Housing Fund.

Finance Director Heidi Evans presented the revised policy to the City Council Aug. 11, recommending that no more than $50,000 be awarded in 2026 and another $50,000 in 2027 while the city awaits future developer contributions.

The city's Affordable Housing Fund had a balance of $133,214.72 as of May 28. Of that, $16,805.81 came from state-shared tax revenue and is restricted in how it can be used, while the remaining $116,408.91 could potentially be awarded under the city's affordable housing policy.

The city receives approximately $15,500 annually in state-shared affordable and supportive housing tax revenue. No additional council contribution was designated for the fund in 2026, and no developer contributions are anticipated this year.

Evans said the next expected outside contribution is associated with the Weidner project, but the city does not know when that money will arrive.

Her recommendation would preserve funding for future years while allowing the city to respond to current housing needs.

“At this time, my recommendation would be no more than fifty thousand for 2026, fifty thousand for 2027,” Evans said, adding that the approach would leave approximately $50,000 available for 2028 depending on future developer or council contributions.

The city is also undertaking a substantial rewrite of the policy governing how affordable housing money is awarded.

Chelan's Affordable Housing Policy and application were originally adopted in 2020. City officials began revisiting the process after receiving a large number of community benefit grant requests related to affordable housing.

The Affordable Housing Fund receives money from three primary sources: state-shared tax revenue, developer contributions and allocations made directly by the City Council. Each source can carry different restrictions on how the money is spent.

Evans said the revised application is intended to help city staff match requests with eligible funding sources while ensuring that awards meet state auditing and legal requirements.

Organizations receiving city money must demonstrate that their work provides a public benefit the city could otherwise provide. Without that connection, Evans said, an award could be considered a gifting of public funds.

The proposed policy also provides additional safeguards depending on how an award is used. Capital projects could carry deed restrictions, while programs such as rental assistance or first-time homebuyer classes could be required to meet measurable performance goals.

The Aug. 11 discussion was the second of three planned council reviews of the revised policy and did not constitute final adoption. The policy is scheduled to return to the council for consideration Aug. 25.

Andrew Simpson: 509-433-7626 or andrew@ward.media