Affordable senior housing project planned for regeneration site
MELBOURNE: An affordable seniors housing project is now being planned for a city regeneration site.
Nonprofit housing developer Mercy Housing is proposing a four-story, 74-unit apartment building along E Street and West Holly Street, next door to the Lighthouse Mission shelter.
Mercy’s Holly Senior Housing, currently undergoing the permit review process, would include 31 one-bedroom units, 30 studios, and 13 open one-bedroom units.
“As we seek to build more housing for Bellingham, we need partners like Mercy Housing in the mix to develop dedicated, affordable housing for some of our most vulnerable residents,” Bellingham Mayor Kim Lund said. “Seniors are one of the fastest growing populations of people experiencing homelessness and frequently face housing cost burden. These new homes are an important way that the City is contributing to make a difference right now for seniors who helped build this community.”
All the units will be affordable at less than 60% Area Median Income (AMI). Half of them will be for people whose incomes are less than 30% AMI, with the remaining units split between 40%, 50%, and 60% AMI. Eight of the units will be set aside for individuals exiting homelessness, according to Bellingham Housing and Services Program Manager Samya Lutz.
“At today’s rent limits, the most deeply affordable units in the new building (<30% AMI target) would rent at $625/month, less than half of what market rents are for studio units in Bellingham,” Lutz said. The first floor of the building is expected to feature an entry lobby with shared seating, a community room with a communal kitchen, a fitness room, offices and meeting rooms for building staff, a bike storage room, communal restrooms and 27 parking stalls. Each floor will also house centralized laundry facilities, according to permit documents. Mercy Housing Northwest President Joe Thompson previously said the nonprofit was “excited at the opportunity to be a part of the redevelopment of Bellingham’s Old Town neighborhood.” The project is aligned with city goals to diversify and densify Bellingham’s housing supply amid a projected population increase locally. The city approved an application from Mercy Housing to assist with $5 million in capital construction of the building. The project will also benefit from the $7 million in city street, bicycle, pedestrian and other infrastructure improvements in the neighborhood, according to the city. The total cost of construction is estimated to be about $10 million, according to the city’s publicly available development data. Seniors continue to be identified as a group facing increasing rates of homelessness due to affordability challenges nationally and locally. Mercy Housing already operates several affordable housing projects in Bellingham, including senior-specific housing at both Eleanor Apartments and Sterling Senior. Phase 2 of Cedar Commons, another affordable housing development in Bellingham currently under construction by the Opportunity Council, will offer 65 units for seniors when it is complete. To be considered affordable, housing costs can’t exceed 30% of a family’s gross income and must serve families making 80% or less of the area median income, according to the city of Bellingham. The median household income in Bellingham is $66,755, according to the latest U.S. Census data. Mercy’s Holly Senior Housing is one of several housing projects proposed or completed across eight city blocks in Old Town. The area, known for its rich industrial history, is ongoing redevelopment with plans for an estimated 800 mixed-income housing units and commercial space to come online over several years. Ironworks at Old Town on Astor Street was the first of these projects to began leasing units in the summer of 2026. The six-story building features 84 middle-income, market-rate rental units for between 90 and 130 people. It also features about 1,600 square feet of ground-floor commercial space. On March 10, the city also approved land use permits for developers to construct two additional mixed-use buildings at 800 W Holly and 1315 D streets. The Old Town District is one of Bellingham’s seven urban villages, which support mixed residential and commercial neighborhoods. Urban villages comprise less than 4% of the city’s land area but are expected to accommodate 30 percent of future growth, according to the city.