PHCA Campaign

Tacoma/Pierce County Habitat for Humanity has an unprecedented opportunity to immediately purchase 80 homes to create both opportunity and access to homeownership for underrepresented, income-qualified families.

The Pierce County Housing Authority (PCHA) is repositioning its Low-Income Public Housing (LIPH) portfolio, consisting of 120 single-family homes and 2 duplex units across Pierce County. In April of 2023, Tacoma/Pierce County Habitat for Humanity was named as a preferred partner from the affordable housing organization application pool.

As one of the region’s leading affordable housing developers with over 35 years’ experience, Tacoma/Pierce County Habitat for Humanity is well-positioned to preserve the homes in PCHA’s LIPH portfolio, updating them and then offering homeownership opportunities to qualified buyers living between 60-80% of the Area Median Income (maximum of $81,200 for a family of four). Using a restricted resale model, Tacoma Habitat will also ensure the permanent affordability of these homes, which will preserve entry-level homeownership of the units for generations to come.

As PCHA locates suitable replacement homes for current tenants and assists them in their transition, the homes will become available for purchase. PCHA expects to offer the houses in groups of three or more as they became available, and will notify Tacoma Habitat with specific bid deadlines for each property grouping. The repositioning project is projected to start in the spring of 2023, and continue through June of 2025.

The homes are primarily located in Spanaway and Parkland, with additional small clusters in Bonney Lake, Elk Plain, Graham, and on the Peninsula.

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Financing the Project

In preparation for the repositioning of PCHA’s portfolio, Tacoma/Pierce County Habitat for Humanity has been working with local and state governments to secure funding for this acquisition. The 2023 Washington State Capital Budget included a direct allocation of $14 million to Tacoma/Pierce County Habitat for Humanity, which is key in leveraging other funding for this project.

Tacoma Habitat received $1.5 million from Pierce County through a competitive application process, and applied to the Department of Commerce for a $2 million Housing Trust Fund grant for this project. Additionally, Congresswoman Marilyn Strickland has a $2 million request under review, as many of the homes in question are within her district. 

This project will require support from public, private and community partners . A philanthropic community campaign will be forthcoming. 

Homebuyer Qualifications

The homebuyer profile for these homes are income-qualified, first-time homeowners living between 60-80% of the Area Median Income (maximum of $81,200 for a family of four) and meet the following eligibility criteria:  

  • Need – as evidenced by income under 80% AMI and circumstances that may include paying too much for rent; overcrowded living conditions; living with family or friends and/or living in unsafe or unhealthy environments. 
  • Ability to pay – have stable and verifiable income, have a credit score of at least 620, recurring debt payments less than 13% of the household’s gross income, can secure a third-party mortgage. 
  • Willingness to partner – help Tacoma Habitat build homes through sweat equity investment, maintain eligibility from application through closing, and attend required homebuyer education courses. 

Participation in a rigorous preparedness course is a requirement of all prospective Habitat homebuyers, through which they learn about the rights and responsibilities of homeownership. Additionally, the Homeowner Services team reviews each homebuyer’s current financial situation and works with them to ensure they maintain a credit score over 620 as well as a steady income that will allow them to pay a monthly mortgage through closing and beyond.

For prospective buyers that aren’t yet buyer-ready, referrals are offered to Tacoma Habitat’s no-cost housing counseling program. A HUD-approved housing counselor will provide one-on-one coaching to assess and improve their financial health, increase income/savings, and set housing goals. Overtime, many housing counseling clients either enter the Habitat homeownership program or pursue homeownership in the open market.     

Tacoma Habitat homeowners come from a variety of backgrounds, jobs, religions, and cultures. Historically, 59% of Tacoma Habitat’s homebuyers are BIPOC community members, though since 2019 that number has been closer to 76%. Furthermore, 71% of Habitat homebuyers are single-parent households. 

Restricted Resale Model

To preserve affordability, Tacoma Habitat sells homes in a restricted resale/ land lease model.

Under this model, Tacoma Habitat sells the home to the homebuyer while retaining the rights to the land. In their sales contract, homebuyers agree to a resale formula based on the number of years they hold residency in the home. When/if they choose to sell, the homeowner agrees to only sell to an income-qualified buyer, making less than 80 percent AMI. Each time a unit is sold, a new 99-year ground lease is signed, ensuring that the homes that Habitat sells are affordable in perpetuity for modest-income families who would otherwise be compressed out of the housing market. 

Affordable payment is a tenet in all Habitat programs, and under the restricted resale model, a homebuyer’s all-in monthly payment is set at no more than 30% of their household’s monthly income. (Payment includes mortgage, land lease and insurance.) 

About the Homes

The homes are from the Pierce County Housing Authority’s (PCHA) single-family, Low-Income Public Housing (LIPH) portfolio, consisting of 120 single-family homes and 2 duplex units across Pierce County. The homes were acquired by PCHA through the 1980’s and 1990’s and are all single-story ramblers.

Before entering the bidding process, Tacoma Habitat did a windshield survey on all 124 properties. Based on the geographic location and anticipated rehab required for each unit, we narrowed the scope to 80 homes that our organization can reasonably manage. Most of the properties are in the Parkland/Spanaway area, and are part of either the Bethel or Franklin Pierce School Districts. 

From the initial screening, it is anticipated that, at a minimum, all homes will need new flooring, interior and exterior paint, and various minor repairs. Many also need new roofs, windows, appliances and garage doors. However, these estimated repairs could very well change once full inspections are made. 


Frequently Asked Questions

Why is Pierce County Housing Authority (PCHA) selling these homes?

Many Housing Authorities across the nation are divesting their single-family home portfolios as they are inefficient public housing. Tacoma Housing Authority and Everett Housing Authority did this a few years ago, and Kitsap Housing Authority is doing it now. In those cases, home sales were made to investors on the open market and as a result, the community lost affordable housing units.

Five years ago, PCHA set out a plan to sell its single-family Low-Income Public Housing (LIPH) portfolio consisting of 124 single-family homes and leverage proceeds to expand its affordable multi-family rental housing. The decision was made, in part, due to the financial burden of growing maintenance needs for the aging houses, the vast geographical distance separating the properties and the burden on residents to upkeep these properties without proper resources.

The PCHA repositioning plan is unique in that the organization is not only preserving the units’ affordability, but is also extending homeownership opportunities to its tenants. Through the repositioning, all properties will first be offered to existing tenants for purchase and then any qualified voucher program participant will have the chance to purchase from the LIPH portfolio. Following PCHA tenants, the next preferred sales priority will go to affordable housing organizations like Tacoma Habitat.

PCHA expects to provide all current resident households with housing that better suits their needs and qualifications, eventually place 150 additional households on rental subsidies, generate up to $200,000,000 to develop more affordable housing, and do it all while removing the fewest possible units from the county’s affordable housing stock.

Learn more about the repositioning plan here.

What happens to the current tenants?

PCHA has been communicating with the current tenants about the planned repositioning over the last two years. PCHA has not renewed leases and is wholly responsible for rehousing each resident family.

All impacted PCHA / LIPH residents will be offered “first right of refusal” to purchase the home they reside in and/or another available home in the portfolio. Residents for which this is not a viable option will be transferred onto a Tenant Protection Voucher, which preserves their 30% income calculation for rental housing subsidies. They will be assisted by a Relocation Specialist at PCHA, and in addition to their regular subsidy, PCHA will also provide funding for application fees, administrative fees, pet deposits, security deposits and will contract with moving services. No resident will be forced to face a financial burden through the repositioning process.

Through the repositioning process, PCHA expects to provide all current resident households with housing that better suits their needs and qualifications, eventually place 150 additional households on rental subsidies, generate up to $200,000,000 to develop more affordable housing, and do it all while removing the fewest possible units from the county’s affordable housing stock.

When will the first homes be purchased?

PCHA anticipates that 25-40 units will be vacated by existing residents in 2023, with an additional 40 in 2024 and the remainder in 2025.

The pace of the purchases is dependent on when the current residents are rehoused by PCHA. Tacoma Habitat will not take ownership of any unit until the units are vacant. 

How long will it take to purchase and rehab a home before resale?

While project timelines have yet to be determined, neither Tacoma Habitat or PCHA want any unit to be vacant for long. The working goal is to complete each rehab and sale within 6 months of acquisition. The units will become available on a rolling basis, allowing Tacoma Habitat to gradually manage projects over the next 3-5 years. 

Is this a cost-effective way to add housing stock?

With challenges to find and purchase affordable land with Pierce County, this is the quickest and more efficient way to add this volume of homeownership units to Habitat’s inventory in a short span of time. However, it is not less expensive than new construction. This is a balance of time and money. These homes will be available for first-time homeowners faster than new construction and allow Tacoma Habitat to serve more families.