Financing has been closed and ground has been broken on a large-scale affordable housing development in Renton.

The Watershed project will offer 145 units of affordable housing for over 350 people. The project received private financing from Evergreen Impact Housing Fund (EIHF) and Citi Community Capital, alongside public funding from the Washington State Housing Finance Commission.

Watershed expects to welcome residents in late 2023.

“Like most of the Puget Sound region, Renton has become too expensive for many working families. Folks who are elementary school teachers, grocery clerks, and caregivers cannot afford our region’s skyrocketing rents,” said Kris Hermanns, Chief Impact Officer at Seattle Foundation, which manages EIHF. “Projects like Watershed will allow some of these families to stay—or bring them back.”

EIHF uses private, patient capital to complement public funds and boost the production of affordable housing.

GMD Development, a real estate company that specializes in developing and preserving affordable housing, is developing the property. According to the developers, Watershed Renton will address the significant need for workforce housing with a location that is walkable to parks, schools, and services, as well as the South Renton Transit Center with connections to employment on the 405 corridor, Seattle, and SeaTac.

Watershed will also be one of the first low-income housing tax credit projects in the state to be constructed under a new building code requiring a high level of sustainability and energy efficiency.

The units, many of which have two or three bedrooms for families, will be leased to households earning an average of 50-60% of King County annual median income, or approximately $71,170 for a family of four.

With recent unexpected increases in both construction costs and interest rates, Evergreen Impact Housing Fund played a crucial role in meeting the funding gap that enabled the project to move forward. EIHF’s $10.8 million in funding for the Watershed project was provided by Microsoft as part of the company’s $50 million investment in the Fund. Microsoft and EIHF also financed TWG’s Grata property in the Totem Lake area of Kirkland with 125 affordable housing units and Bellwether Housing’s 200-unit development in the Bitter Lake neighborhood of North Seattle.

“The successful launch of the Watershed project captures what our region desperately needs: a broad network of public, private, and philanthropic organizations that all come together around shared solutions,” said Jane Broom, Sr. Director of Microsoft Philanthropies. “This project is an important step towards addressing our region’s housing crisis, and while much remains to be done, initiatives like the Evergreen Impact Housing Fund are helping hundreds of people access affordable housing.”

This is the fourth project for EIHF, which previously financed the Solera property in Renton with a consortium of five local credit unions.