Chelan opens $50,000 affordable housing grant program

CHELAN — The City of Chelan will make up to $50,000 available for affordable housing projects this year through a new grant process approved by the City Council Aug. 25.

The council adopted Resolution 2026-1488, establishing an Affordable Housing Grant Funding Policy and opening the application period from Sept. 1 through Oct. 15.

Finance Director Heidi Evans said the policy and application were developed through discussions with the council, community feedback and legal review. Because money in the city’s affordable housing fund comes from several sources with different restrictions, Evans said staff worked to make the application process as accessible as possible.

“We do feel confident in terms of what has been produced,” Evans said.

The first round will move more quickly than future grant cycles. Evans said a typical application and review process would take about three months, but this year’s round is being expedited because of its late-year launch.

Councilmember Tim Hollingsworth said getting the program underway will allow the city to begin using money that has accumulated in its affordable housing fund while learning from the first application cycle.

“I just think it’s important that we move forward and get the process open and running,” Hollingsworth said. “We have some funds available, and it would be nice to put those to work.”

The city currently receives approximately $15,000 annually in state-shared tax revenue for affordable housing, Evans said. At an award level of up to $50,000 per year, the city would draw down the existing balance considerably faster than new revenue replenishes it.

Evans said the council will determine funding through its budget process each year and could consider additional city funding or future developer contributions.

Questions about how the fund accumulated its existing balance brought Community Development Director John Ajax into the discussion. Ajax said a significant portion originated with The Lookout.

Under a development agreement between Chelan Lookout LLLP and the city, the developer agreed to make affordable housing payments to mitigate the development’s potential impacts on affordable housing in Chelan. The agreement required a $1,000 payment from Chelan Lookout’s proceeds from the original sale of each applicable lot, with the money delivered to the city.

“That would have been the bulk of the balance of that fund initially,” Ajax said.

The agreement placed responsibility for the payments on Chelan Lookout rather than individual property buyers. The fund has since continued receiving state-shared revenue through a credit against the state’s portion of sales tax, which Ajax said has generated roughly $15,000 annually for about five years. Evans said previous councils also dedicated other funding to affordable housing at times.

The new housing grant does not prevent organizations from seeking money through Chelan’s separate Community Benefit Grant program. Evans said the city revisited its affordable housing funding process after receiving a large number of Community Benefit Grant requests earlier this year, several of which could potentially qualify for housing funds instead.

Council members unanimously approved the resolution and the 2026 application period.

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