The Housing Play: Three Pierce County Models, One Obvious Next Site

This is part of the series that starts with Inside the Line: Puyallup’s Opportunity Zone, Explained Like It Matters, alongside The New Opportunity Zone Math, Between Two Growth Centers, and The Hospital Play. This piece is housing — and unlike most housing commentary, every model in it is a real building within ten miles of the tract.

Housing is where Opportunity Zone money does its most visible work, and its most argued-about. It is also where Pierce County has an unusual advantage in this conversation: we don’t have to speculate about what OZ housing looks like. It is already built here, in two different flavors — and Puyallup itself just proved it can close a sophisticated housing deal in 90 days.

Three buildings. Three capital models. One obvious next site.

Model one: The Astor — the historic conversion (Tacoma)

In downtown Tacoma, the Washington Building stood as a 1925 office tower, a landmark running out of economic lives. Unico Properties partnered with Pinnacle Partners — a firm that exists specifically to invest Qualified Opportunity Zone funds — and converted it into The Astor: 156 apartments, delivered in July 2022.

The lesson for Puyallup is the mechanism. Adaptive reuse of an existing building under OZ rules runs on the substantial improvement test: within 30 months, the project must invest at least as much in improving the building as the building itself was worth (its basis, excluding the land). Buy a tired building for a basis of $800,000 and the rule requires another $800,000-plus of real construction into it. The rule is why OZ money loves sturdy old shells — the incentive literally pays for resurrection, not cosmetics.

The tract between Downtown and South Hill has exactly this kind of stock: older commercial buildings with good bones and tired economics. The Astor is the proof, fifteen minutes away, that QOZ capital will underwrite their second lives.

Model two: The Moraine — workforce housing, new build (Tacoma Hilltop)

On Tacoma’s Hilltop, Ethos Development and Catalyst Opportunity Funds built The Moraine: 160 units of workforce housing — new construction, aimed at the people who staff a city’s hospitals, schools, and services rather than at the top of the rent market. It won CoStar’s 2025 Multifamily Development of the Year for the Seattle market.

Workforce housing is the product OZ 2.0’s redesign quietly favors: the tightened eligibility tests push funds toward tracts with genuine need, and the new reporting requirements mean the “who lives there” question now gets asked in public. The Moraine shows the product can also be the best building in its market — workforce rents and an award-winning project are not a contradiction.

For Puyallup, connect this model to the hospital play: Good Samaritan’s expansion will hire in waves for twenty years. Those hires are the Moraine’s tenant profile, and housing built for them — near the campus, at workforce rents — is the tract’s most defensible residential thesis.

Model three: Addison Grove — the 90-day close (Puyallup, not OZ)

The third building is the one skeptics should sit with. Addison Grove, right here in Puyallup, is 102 apartments for families earning 50–80% of area median income (90 of the 102 homes are reserved below 60% of AMI), developed by Great Expectations. It is not an Opportunity Zone project — its engine is the Washington Family Housing Fund, created by Ballmer Group with the Washington State Housing Finance Commission, which put in a $13.41 million subordinate forgivable loan. From application to closing: 90 days.

Addison Grove matters to this series for three reasons. First, it proves Puyallup’s machinery works — land, entitlements, and a sophisticated capital stack, executed fast. Second, it proves local absorption: affordable and workforce product here leases into real demand, not projections. Third, it sets the honest contrast: where OZ equity is return-seeking capital that needs the math in the money piece to work, the Family Housing Fund is concessionary capital that optimizes for affordability per dollar. Different engines, both real.

How the three models stack over one tract

The mistake is treating these as competitors. Over a ten-year designation, a healthy tract uses all three:

• Conversions (Astor model) for the older buildings the substantial-improvement rule fits — QOZ equity, market and workforce rents, historic fabric saved instead of scraped.
• New workforce buildings (Moraine model) on the vacant and underutilized parcels the City’s application emphasized — QOZ equity again, aimed at the hospital-and-corridor workforce.
• Layered affordable projects (Addison Grove model) where deeper affordability is the goal — concessionary and public capital in the stack, with OZ equity able to sit alongside other sources where a project is structured for it.

That layering point is the one honest housing economists insist on, and this series will too: tax-advantaged equity on its own generally underwrites market and workforce rents. The deeper affordability — the 50–60% AMI homes — usually arrives when other capital takes the subordinated, patient position, exactly as the Family Housing Fund did. OZ 2.0’s reporting makes it harder to blur that distinction, which is a feature.

What would actually get built first

If the Pierce County record is the guide, the tract’s first housing moves are the Astor and Moraine plays, not the mega-project: an older building with the right basis math, converted; a vacant parcel near the corridor, built to workforce rents; both marketed to the workforce the hospital is hiring and the two growth centers already employ.

The demand is documented — a 249-bed regional shortfall being built against, two designated growth centers, a fair that imports a million visitors a year past these blocks. The models are standing ten miles apart, visible from the freeway. The capital mechanism switches on January 1, 2027.

What Puyallup adds, when the first project is announced, gets recorded on the hub’s scoreboard — which today still reads zero, and won’t for long.

Sources: Unico Properties (The Astor — 156 units, Washington Building adaptive reuse with Pinnacle Partners, delivered July 2022); Catalyst Opportunity Funds (The Moraine — 160 workforce units with Ethos Development; CoStar 2025 Multifamily Development of the Year, Seattle market); Propmodo / Puget Sound Business Journal (Addison Grove — 102 units at 50–80% AMI, Washington Family Housing Fund $13.41M subordinate forgivable loan, 90-day close, developer Great Expectations); IRS/IRC §1400Z-2 substantial improvement standard (100% of building basis ex-land within 30 months, urban). This article is general information, not tax, legal, or investment advice.