## Meeting Overview The September 11, 2025 Community Development Advisory Board (CDAB) meeting was held in person at City Hall's Mayor's Boardroom, with Chair Shannon Laws presiding. Despite the hybrid format allowing virtual participation, it was a smaller gathering than usual — a planned presentation by Road to Home had to be cancelled at the last minute, leaving more time for substantive discussion of housing policy and city budget challenges. Present in person were board members Shannon Laws (Chair), Andrew Calkins, Katherine Freimund, Lola Thompson, Matthew Main, and Samuel Letts, along with city staff Samya Lutz and Kathleen Morton. Council member Jace Cotton also joined the meeting. Ben Spicer and Matt Unger participated virtually, while several regular members were absent. The meeting would prove to be an important one for understanding both the city's housing accomplishments over the past year and the significant budget pressures facing social services in the coming year. ## The Annual Performance Report: Measuring Success Amid Rising Costs The heart of the meeting was a detailed presentation of Bellingham's Consolidated Annual Performance and Evaluation Report (CAPER) — the city's annual accounting to federal housing officials of how well local housing programs are working. Samya Lutz walked through what amounts to a comprehensive report card on the city's $17 million investment in affordable housing and services for low-income residents during the 2024 program year. The numbers told a story of both significant progress and mounting challenges. The city committed to 175 new units of affordable housing through partnerships with agencies like the Housing Authority, Lake Whatcom Center, Opportunity Council, and Mercy Housing Northwest — exceeding their production goals. These projects represent over $108 million in total investment, with the city contributing about $15 million in local funds that leveraged millions more in outside funding. "The leverage for this production program is the highest among all of the programs and projects that we fund," Lutz explained, noting that housing construction projects typically attract much more outside funding than service programs. However, she also pointed to a troubling trend: "We, at one point, were at $12 for every $1 of city investment, and now we're down to more, like, closer to $6. So it's… it's really been cut in half." This declining leverage ratio reflects a broader challenge facing affordable housing development nationwide — construction costs have soared while federal and state funding sources have remained flat or even decreased. As Lutz put it: "That part of that's just because everything's more expensive, and there's not been more additional funds, outside funds, come in. They've actually decreased. So the dollars just aren't going as far." The completed projects during the program year painted a picture of the city's evolving approach to housing challenges. The most significant was the YWCA's acquisition and conversion of an office building into emergency shelter for pregnant and parenting mothers with young children — a $3 million project that will provide 19 rooms. The city also completed the North Haven Tiny House Village in the Birchwood neighborhood, providing 41 units of interim housing for extremely low-income residents. Board member Samuel Letts, representing the city's interests, praised both the substance and presentation of the CAPER: "I think the caper got a visual and layout upgrade this year... I like how it reads, and the visuals, and how you can kind of track the different funds, and I just think it's laid out in a good way." ## Budget Realities: Federal Uncertainty and Local Pressures The discussion then shifted to more immediate concerns about funding for the coming year, revealing the complex web of federal, state, and local financing that keeps housing and social service programs running. Lutz delivered sobering news about the city's general fund, which supports human services grants including food bank support: "Money is tight, right, on many, many fronts. Money is really tight." The city had been told that $150,000 in general fund support for the food bank would not be in the next budget, and an additional $111,000 in cuts were expected. This represents a significant portion of the roughly $500,000 the city provides annually in general fund support for human services. Unlike the dedicated housing levy and affordable housing sales tax, which voters have committed to specific purposes, general fund money competes with police, fire, and other essential city services. "Every single department is being asked to cut," Lutz explained, outlining the difficult decisions ahead. The staff proposed splitting some of the cuts with the GRACE program (a partnership with Whatcom County for crisis response), since the county consistently bills less than the maximum allowed under their agreement. Adding to the uncertainty, federal funding remained in limbo due to ongoing legal challenges to new executive orders related to immigration enforcement and gender ideology. The city had just received their HUD grant agreements the day before the meeting, but they included the contested policy provisions that Bellingham and other jurisdictions are challenging in court. "About a third of the jurisdictions that the Seattle office covers are part of this lawsuit," Lutz noted, indicating the widespread nature of the resistance. The city's legal department was reviewing how to sign the agreements while preserving their right to challenge the policy provisions. Board member Andrew Calkins, representing the Bellingham Housing Authority, asked practical questions about the timeline: "So, these are grants where you have told people that they have been allocated that amount. They have a contract that has that amount in it." Lutz confirmed that current contracts would be honored, but renewal decisions for next July would depend on what funding actually materializes through the budget process: "Up until this year, in my tenure with the City, we've always renewed for a second year at the exact same amount. Every year. We don't know that we're going to be able to do that this year." ## Housing Market Analysis: Surprising Stability in Rental Prices Despite the budget concerns, the meeting brought some unexpectedly positive news about Bellingham's rental market. Kathleen Morton presented results from the city's annual independent rent study, which surveys all rental listings in August to establish payment standards for city-funded rental assistance programs. The study found only a 0.1% average increase in rental prices across all bedroom sizes — a remarkable stability compared to the dramatic increases seen in recent years. Most surprisingly, two-bedroom rents actually decreased by 3.8%, which Morton attributed to increased availability in that segment of the market. "I live in a two-bedroom apartment, and most people I know do, and I don't think I know a single person whose rent has decreased," observed board member Shannon Laws, reflecting the disconnect between market prices for new tenants and rent increases for existing tenants. The study also revealed that the city's payment standards are now much closer to HUD's fair market rents than in previous years, suggesting that HUD's methodology changes are working. "HUD's catching up," noted board member Samuel Letts. "They had a 9% increase this year, and your number's, like, pretty close." This convergence raised questions about whether the city should continue conducting its own time-intensive study. Morton estimated the manual data collection takes about 10-12 hours per week during August, scanning through listings on Zillow, Craigslist, and Apartments.com to capture rent prices, utility arrangements, and housing types. "It's actually not utilized a lot, other than our grantees, of course, who certainly utilize this data," Morton acknowledged when asked about broader applications. The staff indicated they would likely continue the study for at least another year to establish a three-year comparison with HUD's new methodology before making a final decision. ## Looking Ahead: Housing Week and Future Challenges The meeting concluded with announcements about upcoming events, particularly Housing Week in mid-October. This annual event, sponsored by Sustainable Connections and the Whatcom Housing Alliance, would feature multiple sessions including presentations on the city's home sharing program and aging-in-place options for seniors. Board members also made requests for future agenda items that revealed their desire for deeper understanding of both the technical aspects of housing policy and its human impact. Chair Shannon Laws suggested brief presentations from staff members Lutz and Morton about their backgrounds and roles, saying she had found an informal conversation with Morton about her work "really interesting." Board member Matt Unger, participating virtually, requested a presentation from the Seattle-area HUD representative to provide broader perspective on federal housing policy challenges. With Lutz and Morton planning to attend a Northwest Association of Community Development Managers conference in Boise the following week, they offered to gather information from HUD officials and potentially arrange a virtual presentation. The discussion also touched on the broader affordability crisis facing Bellingham. Board members had seen reports claiming Bellingham was among the most expensive small cities in the nation relative to local incomes — a statistic that, whether fully accurate or not, reflected the lived experience of many residents struggling with housing costs. As Chair Laws noted with a touch of humor about proposed high-speed rail connecting Vancouver to Portland: "I wonder, though, of that speed rail that would make a stop at Bellingham without an increase... what kind of impact it would have on our... on everything." The comment captured both the potential opportunities and risks facing a small city caught between major metropolitan areas, dealing with housing pressures that dwarf its historical experience while working within budget constraints that limit its response options. The meeting adjourned with plans to meet in both October and November, giving the board time to digest the complex budget implications and prepare for allocation decisions that would affect vulnerable residents throughout the community. The challenge ahead was clear: how to maintain essential services and continue housing production in an environment of declining leverage, federal uncertainty, and local budget pressures — all while serving a population that increasingly needs more help, not less.

### Meeting Overview The City of Bellingham Community Development Advisory Board (CDAB) met on September 11, 2025, to discuss affordable housing funding, review the annual performance report to federal agencies, and examine local rental market data. The meeting addressed significant budget constraints facing human services programs and ongoing federal funding challenges. ### Key Terms and Concepts **CAPER:** Consolidated Annual Performance and Evaluation Report - an annual report to HUD documenting how the city spent federal housing and community development funds and what was accomplished. **HOME-ARP:** HOME American Rescue Plan - special one-time federal funding provided during the pandemic for homeless services and housing, with a seven-year spending timeline. **Payment Standard:** The maximum rent amount that rental assistance programs will cover, based on local market research rather than federal fair market rent calculations. **Leveraging:** The practice of combining city funds with other funding sources to maximize total project investment - currently about $6 in outside funding for every $1 of city money. **HUD Fair Market Rent:** Federal calculation of reasonable rent amounts by region, historically lagging behind actual local market conditions. **GRACE Program:** Ground-level Response and Coordinated Engagement - a partnership program with Whatcom County for coordinated services. **Housing Levy:** Voter-approved property tax that funds affordable housing production and preservation through 2028, totaling $40 million over 10 years. **General Fund:** The city's primary operating budget that funds basic services like police and fire, currently facing significant financial constraints. ### Key People at This Meeting | Name | Role / Affiliation | |---|---| | Shannon Laws | CDAB Chair | | Samya Lutz | City Staff - Housing Programs | | Kathleen Morton | City Staff - Development Specialist | | Andrew Calkins | Board Member - Housing Authority Executive Director | | Ben Spicer | Board Member | | Matt Unger | Board Member (virtual) | | Jace Cotton | City Council Member | ### Background Context The meeting occurred during a period of significant budget stress for local governments. The city faces potential cuts of $150,000 to food bank funding and additional reductions to human services contracts, while federal HUD funding remains uncertain due to ongoing litigation over federal policy requirements. Meanwhile, the city continues managing millions in affordable housing investments while conducting annual assessments of local rental markets to ensure assistance programs remain effective. This financial tension reflects broader nationwide challenges where federal funding has stagnated while local housing costs have continued rising, placing greater burden on local funding sources like the housing levy and sales tax to fill gaps in affordable housing and services. ### What Happened — The Short Version Road to Home was scheduled to present but cancelled last minute. Staff presented the draft CAPER showing the city committed to 175 new affordable housing units and completed 86 preservation projects, with most funding serving households earning less than 30% of area median income. The board opened and closed a public hearing on the report. Budget discussions revealed significant upcoming cuts: $150,000 to food bank funding is already eliminated, with an additional $111,000 in cuts needed from human services grants. Staff received HUD contracts with new federal policy requirements that the city is challenging through legal amendments. The rental market study showed minimal rent increases (0.1% average) with city payment standards now closely aligned with HUD's calculations, validating the local research approach while requiring significant staff time to complete. ### What to Watch Next • City Council budget decisions in late fall will determine final human services funding levels • HUD contract resolution through legal department review and potential amendments • November CDAB meeting to review service provider performance stories and outcomes • October Housing Week events including home sharing program presentations ---

**Q:** What is CAPER and when is it due? **A:** Consolidated Annual Performance and Evaluation Report - the annual report to HUD documenting affordable housing and community development accomplishments, due to HUD by end of October. **Q:** How many affordable housing units did the city commit to in 2024? **A:** 175 units across four major projects including housing authority development, senior housing, and supportive housing projects. **Q:** What budget cuts are anticipated for human services? **A:** $150,000 cut to food bank funding (already eliminated) plus additional $111,000 in cuts to be split between GRACE program and human services grants. **Q:** How much leverage does the city typically achieve on housing investments? **A:** About $6 in outside funding for every $1 of city funding, though this has decreased from previous levels of $12 per dollar. **Q:** What percentage of city funding serves households below 30% area median income? **A:** 79% of beneficiaries had incomes below 30% AMI, with 21% between 31-50% AMI. **Q:** What was the average rent increase found in the 2025 rental study? **A:** 0.1% average increase across all bedroom sizes, with two-bedroom units actually decreasing by 3.8%. **Q:** How much time does the annual rental study require? **A:** Approximately 10-12 hours per week during the month of August when data is collected from rental listings. **Q:** What federal litigation is affecting HUD contracts? **A:** The city is part of a lawsuit challenging federal executive order policies related to immigration enforcement and gender ideology requirements in HUD contracts. **Q:** Which city funding sources support affordable housing programs? **A:** Housing levy ($40 million over 10 years), affordable housing sales tax, general fund, plus federal HOME and CDBG grants. **Q:** When does the CAPER public comment period close? **A:** October 5th, 2025 - a 30-day period for public input on the annual performance report. **Q:** What is the GRACE program's funding arrangement? **A:** 40% city funding, 60% county funding for the Ground-level Response and Coordinated Engagement program, though actual billing has been lower than budgeted. **Q:** How many housing preservation projects were completed in 2024? **A:** 86 units across home rehabilitation, manufactured home repair, shelter acquisition, and tiny house village preparation. **Q:** What percentage of rental listings included utilities? **A:** 42% of listings indicated utilities were included in the rent price. **Q:** What is the current status of HUD funding agreements? **A:** Contracts received September 10th but include challenged policy provisions; legal department reviewing potential amendments before signing. **Q:** Why does the city conduct independent rental market research? **A:** HUD fair market rents historically lagged local costs by 20-25%, though recent HUD methodology changes have made them more comparable to local findings. ---