The Big “Clawback”: Senate Would Take Back Housing Money

The state Senate is working late tonight, and one of its major tasks is to amend, and possibly approve, the state’s capital budget through June 2011. One major headache has developed for affordable housing advocates: the latest budget cuts the state’s Housing Trust Fund by nearly $40 million.

This is one place where the two legislative bodies are miles apart. The House version of the capital budget, by contrast, would double the trust fund’s biennial allocation to $200 million. The extra $100 million over in the House would support further development — and with it, a much needed lift to the construction industry — to meet the need for affordable housing across the state.

What the Senate wants to do is to take back — “clawback” is the term of art — $17 million authorized by the state but unspent from previous biennia. Then it would reduce the $100 million allocation in the 2009-11 budget by $22.5 million, which would cut into funds that are already destined for current housing.

“We’re very concerned” about the Senate budget cut, says M.J. Kiser of Compass Housing Alliance, a Seattle non-profit building an 80-unit apartment building for chronically homeless people. The state had awarded the project $1.8 million.

Also disconcerting, says Kiser, is the cutback’s threat to operating money for apartment buildings that organizations like Compass are already running. She says the state Commerce department agreed to only a six-month contract for operating funds last year.

“We need 12 months of funding,” she says. “We were counting on that money in our budget to pay our bills. I’m not going to say that this year we’re going to raise the rents to cover that cost, because our tenants can’t afford it either, but over the system it’s a possibility…. In housing, you either cut costs or raise rents.”