The Housing Authority of the City of Seattle sold $46.2 million in bonds to build affordable housing units in the city’s Yesler Terrace neighborhood, which is near downtown Seattle.
The bonds are split between $30.8 million in serial bonds mature on June 1, 2027, and $15.4 million in term bonds maturing on December 1, 2030. The serials yield 4.29% and pay interest at 5%, and the term bonds yield 4.48% and pay interest at 4.375%. The securities received a rating of AA from S&P Global Ratings.
The issuance comes amid rising homelessness in Seattle. The number of people living outside in King County, where Seattle is located, has risen 38% since 2020, according to the Point-In-Time count, an annual survey of homeless people in the United States conducted on behalf of the U.S. Department of Housing and Urban Development. Seattle officials think redeveloping sites like Yesler Terrace could be a solution to a shortage of affordable housing that contributes to homelessness.
“What is emerging is a dynamic new community that honors the neighborhood’s history and cultural richness while creating attractive new housing that is affordable to residents across a broad range of incomes,” the Seattle Housing Authority’s site reads.
The authority will lend the proceeds to a developer, which will use the loan to finance the construction of Juniper Apartments, a new 114-unit affordable housing building in Yesler Terrace.
Yesler Terrace has a long history of hosting affordable housing. The Seattle Housing Authority developed the neighborhood in the 1940s as the city’s first publicly subsidized community. The authority began the process of renovating Yesler in 2006.
The Seattle City Council created a housing authority in 1939, empowering it to issue debt and make loans to finance housing for low-income residents of the city. The bonds are special obligations of the authority, secured by loan repayments.
KeyBanc Capital Markets served as underwriter on the issuance, purchasing the bonds for $46.7 million. The price reflected a premium of almost $500,000.