Mayor Jim Slowik’s vision for affordable housing was blindsided last week when he received word that Oak Harbor’s application for a state grant was rejected.

“It is with a heavy heart that I report this to the council that our CTED application was not selected,” Slowik said Tuesday during the mayor’s report, referring to the state department of Community, Trade and Economic Development.

The stark news couldn’t come at a worse time, when residents of the M & M Mobile Home Park were recently evicted and seniors living in Evergreen Mobile Home Park fret over a rezone that could force them out of their homes.

“They shorted the spring round by $20 million and canceled the fall round,” Slowik said. CTED, facing money problems of its own, awarded only $62 million last week to 17 counties in Washington state. Island County was not among them.

“We just hit it at a bad year,” Slowik said.

“This will not be the end of the line for us,” the mayor added. “There will be another opportunity in July for federal funding.”

According to City Attorney Margery Hite, the city is working with the Housing Authority of Snohomish County and HomeSight to explore other options.

“We did think we were in very good shape,” Hite said of Oak Harbor’s chances of winning a CTED grant. “It was disappointing that we didn’t get it.”