The Wenatchee City Council is allowing a builder to backtrack from an affordable housing agreement. 

The council held a lengthy debate before deciding that Eider Properties could be released from its commitment to build 84 units on Red Apple Road as affordable housing. 

Council member Keith Huffaker is sympathetic toward the soaring costs faced by builders. 

"It's next to impossible to build brand new, affordable housing in this day and age," said Huffaker. "What it does do is allow people to move up, which lets people move into lower cost units. I'm OK with this." 

Council member Mike Poirier agreed to let the builder out of its commitment but does not think it's fair that Eider will still get a major tax break to build higher rent market value housing. 

"It drives me nuts that this happened, nuts!" said Poirier. "We’re disappointed here. We’re sad." 

Builders get an eight-year tax break to construct market value housing while the tax break increases to 12 years if 20 percent of the units are affordable. 

The city council agreed to change its agreement with Eider from the 12-year program to the eight-year tax break.  

The builder says it found out after entering into the agreement that the affordable housing requirements wouldn’t be viable for the Red Apple Road complex. 

It says one of its office personnel filled out the form for affordable housing without knowledge of requirements under the federal Department of Housing and Urban Development (HUD). To be affordable requires rent to be no more than 30 percent of gross income according to HUD data for Chelan County based on family size. 

The company says anyone who's applied to access the affordable housing is far over the threshold to qualify under the HUD requirements. Eider also says it used high quality materials in the construction of the Red Apple site, and the cost of those materials has risen sharply since the pandemic. 

Eider Construction Project Manager Flint Hardwig addressed the council Thursday, where he said the project, because of the pandemic and various delays, ballooned to $20 million in cost. He also noted to interest rate for financing has doubled from 3% to 6% in that time. 

In addition, Hardwig said the Wenatchee market has changed in recent times with overbuilding. He said a number of new housing projects are now offering a month or more of free rent and mentioned that his company is looking at offering two months of free rent for the Red Apple Road project. 

Hardwig said the current eight-year tax break builders get to provide market value housing makes sense with current market conditions. 

He said the only way to bring rents down would be to change city zoning to allow for more units per acre. He mentioned one of Eider's projects on 5th Street that's listed as a 14-plex but is actually being rented out as bedrooms with common spaces for services such as washers and dryers. Hardwig said the rent for those units is $1,000 a month and noted they were all leased out in a single weekend after coming on the market. 

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