Authored by Redmond, WA Mayor Angela Birney and Principal Planner Ian Lefcourte, AICP
Key Takeaways
- Utilization of Surplus Land: By leveraging surplus land from Sound Transit at a deeply discounted rate, Redmond, WA was able to support deeply affordable housing near transit.
- Collaboration is Key: The Prisma project is a result of cross-sector partnerships between city government, nonprofits, philanthropy, county and state agencies.
- Targeting the Greatest Need: The Prisma project aims to primarily provide affordable homes for those earning 50 percent AMI or less, directly addressing a critical housing gap in the region.
- A Replicable Model for Equitable TOD: With inclusive design, a mix of unit sizes and a long-term affordability covenant, Prisma provides a practical model for cities looking to align affordable and equitable housing with transit-oriented development.
Ask most Washingtonians about housing, and you’ll likely hear the same response: it’s too expensive. Housing prices in East King County have climbed sharply over the past decade, outpacing wage growth and pushing many people farther from jobs, schools, shops and amenities.
This collaboration resulted in Prisma, a six-story, mixed-use development to be constructed next to Overlake Village Station. Prisma aims to meet this opportunity and responsibility and become a national model for equitable transit-oriented development (TOD).
Other key partners include King County, private sector corporate philanthropy, the Washington State Housing Finance Commission and A Regional Coalition for Housing (ARCH). Thanks to the extensive collaboration of these agencies and partners supporting technical expertise, funding, expediated permitting and land, this success was possible.
Spotlight on Overlake Village
Several challenges contribute to the region’s housing affordability crisis. There is low land availability, and limited supply drives up the cost. While there are some local dedicated revenue streams, such as dollars from HB 1406 for local state-shared tax for affordable and supportive housing, there is not enough funding to support affordable housing efforts like Prisma on their own. Additionally, there is a general lack of housing units and high demand for one-bedroom and studio apartments. This is in part because of the strong regional economy that employs many who are newer to the workforce and have smaller household sizes. This trend, along with the fact that smaller units typically rent at a higher dollar per square foot rate than multi-bedroom units, results in market-rate developer preference for studio and one-bedroom units.
In response to these challenges, Redmond, WA uses a variety of tools to support housing at all income levels. The toolbox includes mandatory inclusionary zoning, a voluntary multifamily property tax exemption program, pooled funds from neighboring cities, increased zoning capacity, faster permit review and expanded land use options.
These tools have made a sizeable impact, helping create more market-rate and cost-controlled affordable housing. Since 2020, these combined efforts have contributed to the development of over 3,900 multifamily units, with approximately 500 cost-controlled affordable housing.
Still, most of these homes are affordable only to households earning 60 percent of the Area Median Income (AMI) or more, because Redmond’s voluntary multifamily property tax exemption and mandatory inclusionary zoning programs historically generated affordable housing units that served households earning between 60 percent to 80 percent of AMI. The market-rate housing typically served households earning 80 percent AMI and above. As such, homes were affordable only to households earning 60 percent AMI or higher.
In contrast, the King County Countywide Planning Policies (CPPs) identified a significant need for households earning 50% of AMI or less. In fact, the King County CPPs estimate that over 70 percent of the housing growth in Redmond (PDF) from 2019 to 2050 needs to be affordable for households earning 50 percent AMI or less. The Prisma project is a promising step towards serving households earning primarily 50 percent AMI or less. The Washington Low Income Alliance found that in Washington state, there are only 28 affordable and available rental homes for every 100 extremely low-income renter households. By focusing on deeply affordable homes near transit, our city offers access to opportunity, community connection, amenities and long-term stability.
TOD Success in Action
Sound Transit’s TOD program was established to convert surplus construction land into vibrant, dignified and equitable neighborhoods. State law and Sound Transit’s 2018 Equitable TOD Policy (PDF) require that Sound Transit use 80 percent of its surplus land for housing and ensure 80 percent of that housing is affordable to people earning 80 percent or less of the area’s median income. As a result, more than 3,400 homes throughout the region are in the development pipeline, with nearly 2,700 of them cost-controlled income-restricted affordable housing units.
The TOD opportunity for the Prisma project was possible because Sound Transit provided surplus land at a significant discount. A recent assessment of the land estimated its market value to be around $30 million. Sound Transit has committed to conveying the property for $250,000.
Deep Affordability
A covenant will be recorded on title at closing, restricting the housing use on the property for affordable housing for a period of 50 years.
About fifty-five of the 328 units are reserved for households at or below 30 percent AMI, including ten apartments designed for residents with physical, intellectual or developmental disabilities. Larger two- and three-bedroom units will serve families otherwise priced out of housing in the expensive East King County market. By combining lower land costs, the Low-Income Housing Tax Credit program (paired with tax-exempt bonds), King County’s Housing Finance Program, direct dollars from the City of Redmond and state Housing Trust Fund dollars, the development team can provide cost-controlled rents well below average market rates.
Many Partners, One Vision
One of the biggest challenges was funding. Since there is no local housing levy to generate funds for affordable housing, funding for the project came from a diverse group of public and private sources:
- Sound Transit: Conveyance of surplus land at a significant discount.
- King County: Over $5 million commitment for gap financing.
- Amazon Housing Equity Fund: Soft loans aligned with the agency’s regional TOD agreements.
- Washington State Housing Finance Commission: Bond caps and Low-Income Housing Tax Credits.
- City of Redmond: Nearly $3 million commitment. Also, fee waivers and expedited permitting.
- A Regional Coalition for Housing (ARCH): Pooled funding from local member jurisdictions, including Redmond.
By front-loading public investments, Prisma can break ground in early 2026 and deliver homes in early 2028.
Template for Equitable Growth
Although Prisma is still in development, it stands as a model for how public-sector leadership, nonprofit development and cross-sector funding can come together to build equitable transit-oriented housing. It shows that equitable housing outcomes require thoughtful policies, committed partnerships, supportive funding, inclusive design, welcoming community members and visionary elected officials. As cities across the country continue to grapple with rising rents, Prisma offers a practical roadmap and lessons for community-centered, affordable growth:
- Leverage Surplus Transit Land: Discounted transfer of land tips the scale toward deep affordability without draining local housing trust funds.
- Stack Multiple Subsidies: No single funding source closes the gap, but strategic layering, from county grants to corporate social-impact funds, creates a resilient capital stack.
- Design for Families and Accessibility: Two- and three-bedroom units and universal-design features expand who benefits from TOD.
Explore the Ultimate Housing Resource for City Leaders
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