A basic overview of affordable housingneeds, development, and challenges

Housing for a Diverse and Sustainable CommunityJanuary 2013

Before we get started . . . Note that Arlington Countydoes not have a public housing authority but provides assistance with housing in a variety of ways, including direct grants to lower income families, seniors, and persons with disabilities. This presentation focuses on preservation and creation of affordable housing units, especially units called committed affordable (or CAFs)*

Affordable housing comes in all property typesSingle family and multifamilyGarden apartments and highrisesRental [mostly] and home ownershipNew construction and existing buildingsMixed income complexes

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Affordable housing definedby the Department of Housing and Urban Development Decent, quality housing that costs no more than 30 percent of a households gross monthly incomefor rent/mortgage and utility payments *

Who needs affordable housing?A variety of workers vital to our communitys health, safety, and economic success, including:Teachers, first responders, and health-care workers Retail, hospitality, and service workers Young peoplemany of whom were raised in Arlingtonlaunching careers and familiesPersons on fixed incomes, such as seniors and persons with disabilities

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Why affordable housing mattersAn adequate supply of affordable housing helps the entire community by Supporting and sustaining economic development, helping employers attract and retain workers and keeping the Arlington economy resilientKeeping Arlington diverseeconomically, culturally, and age-wise *

Reducing commuting, yielding a cleaner environment, reducing stress and improving wellnessReducing turnover in schools, which is good for students, families, and Arlington schoolsCreating a sense of place (community) and reducing family displacement

*Why affordable housing matters, cont.

Affordable unitsthe link to median income levelsArea Median Income (AMI): The middle income in a given area.Of households in the area, half earn less than the median; half earn more. Other key facts:Calculated by HUD based on household sizeDetermines eligibility for various housing programsAffordable unit set-asides are pegged to various levels of AMI

2012 Median Income for Washington DC Metro Area

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For a family of 4 $107,500 For a 1-person household$75,300

Two types of affordable units

Market-rate affordable housing units (MARKs) Privately-owned units with market rents affordable to households up to 80% of AMINo requirement that they stay affordableOften described by affordability level 80% MARKsunits affordable at 61-80% 60% MARKsunits affordable at/below 60% Committed affordable units (CAFs)Units with income-restricted rents for an extended period, generally for households at 60% AMI and below

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Affordability by household sizeAt 60% of AMIthe target for most CAFsSIZEINCOME/yrINCOME/moAFFORDABLE (at 30%)1 person 45,1803,7651,1302 person4,3001,2904 person64,5005,3751,612*51,600

2011 Average RentsEfficiency$1,337 One-Bedroom$1,615 Two$2,063 Three $2,421

Housing pressure in ArlingtonIn Arlington, 2 in 5 rental households pay 30% or more for rentA wage of $33.63/hour (assuming 160/hr month) would be required for an average one-bedroom to be affordable*

Creating CAFSCAFs can be created by renovation or new construction, usually by a nonprofit developer.Creating a CAF requires creativity and cooperation to put together the financial pieces.The County is often needed to help close the gap between the cost to renovate/build and operate the CAF unit and what the assisted AMI% level household can afford.

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Creating CAFs: The big-ticket itemLand Cost$6 millionPer Unit: 50 units$120,000Per Unit: 100 units$60,000 Land cost is not the only challenge, but density matters

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The CAF packageTo cover costs, a typical CAF package includes:A commercial mortgage(s)Tax credits and/or bondsmost awarded by the State on a competitive basisA County gap contributionsuch as a loan from the Affordable Housing Investment Fund (AHIF), bonus density, or landA developer contributionthe developer defers fees and/or puts equity into the deal

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County gap financing sourcesAffordable Housing Investment Fund (AHIF) loans from a revolving fund financed through general revenue, developer contributions (in lieu of providing affordable housing units), and AHIF loan repaymentsProject-specific Industrial Development Bonds by the County. Revenue from the development pays for the bond.Grants, often federal pass-through money, for housing-related services

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Other Country resources to support CAFsBonus density permits additional market-rate and CAF units, with the income from the market-rate units designed to offset the cost of the CAFsTransfer of development rights (TDR) allows a site to send density and other development rights for the purposes of the preservation/facilitation of affordable housing (or other community benefits: open space, historic preservation, etc.) Public land donation. Arlington Mill is one example.County-provided infrastructure such as streetscapes, sidewalks, utility grounding, etc., to help keep costs down*

Parc RosslynDeveloped by Arlington Partnership for Affordable Housing (APAH)Redevelopment of 22 market-affordable garden apartments

Mixed:142 market rate and 96 CAF

VHDA bond, AHIF, LIHTC, TDR, APAH equityWon major design award, 2009

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The Jordan Developed by AHC, Inc.Redevelopment of 24 market-affordable garden apartments90 CAFs walking distance from Ballston MetroSite acquired through land swap with commercial developerAHIF, LIHTC, AHC equity

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vPoint of ClarendonDeveloped by The Views at Clarendon CorporationMixed: 46 market- rate and 70 CAFsPreservation of landmark steeple and onsite daycare and other benefitsAdditional density, AHIF

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The Gates (Ballston) Renovation by AHC, Inc. Before*After464 affordable apartments, a new community center, and . . .

. . . winner of the 2009 Historic Preservation Award from the National Trust for Historic Preservation*

Buchanan Gardens (South Buchanan Street) Renovation by APAH includes expanded family units and this new playground*

CAFs are regulated and provide community benefitsYearly income certificationOvercrowding forbiddenCounty architectural, building, and streetscape standardsOngoing business relationship with the County and State agencies encourage good practicesOnsite family- and school-oriented services provided*

Affordable housing challenges in ArlingtonLand (the lack of it plus high price) and our high Area Median IncomeMany MARKs have been and are being renovated into upscale unitsFrom 2003-2011, the County has averaged 293 net new CAFs per year, but demand for CAF units far outweighs supplyArlington needs more affordable units for its current and projected future workforce*

2011 rental unit breakdown*Pg 34, Goals and Targets Report. Source: Arlington County CPHD 17,500 46%8,500 23%4,685 12%3,035 8%4,307 11%15,442 36%3,570 8%6,685 15%11,429 27%Market rate units > 80% 22(48%)Rental CAFs (14%)MARKs up to 60% (12%)MARKs at 60-80%(25%)

Loss of 50% and 60% MARKs*

Jobs v. housing: Short- and long-term gapsIn October 2011, George Masons Center for Regional Analysis released a major study warning that the regions economic engine could stall:Local jurisdictions are planning for an insufficient amount of housing to accommodate future workers.There is a need for more multi-family housing and smaller, more affordable owner and renter homes in the region.~ Housing the Regions Future Workforce: Policy Challenges for Local Jurisdictions

Arlington County acknowledges a more immediate need: Based on the regional ratio of needing one housing unit for every 1.6 new jobs, 3,000 new affordable units would need to be added in Arlington between 2010 and 2015 to serve new workers ~ Arlington County Annual Affordable Housing Targets Report for 2011*

Whats on the horizon?Columbia Pike Neighborhoods PlanAdopted by County Board July 2012; implementing plans began late 2012.Creating and preserving affordable units are among the key goals. More than half of Arlingtons remaining MARKs are along the Pike corridor.Goal: Preserve all 6,200 MARKs over the next 30 years.Tools to achieve preservation:AHIFNew form-based code (FBC), includes increased densityTransfer of Development RightsOther tools

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Whats on the horizon?Arlington Housing StudyA multi-year plan to assess community housing needs, establish long-term objectives, and develop strategic directions. A housing needs survey will provide valuable data for the studythe last such survey was done 10 years ago. County Board adopted charge December 2012.First meeting of citizen working group expected February 2013.*

Questions for our communityCan we convert an adequate number of MARKs to CAFs? Will lack of housing choices stall economic growth?Where will Gen Y live?Will Arlingtonians work together to ensure our County vision of a diverse . . . and sustainable community in which each person is important?

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What can I do?Stay informed! Visit the AHS website and sign up for updates.Share this information. Talk to your friends and neighbors about the challenges we face and the importance of our housing mix.Consider volunteering with nonprofit providers to help provide onsite student and family support services and/or maintenance assistance.*

Recap How affordable housing is defined Who needs affordable housing Why it is important to any community and to Arlington in particular How it is developed and what committed affordable housing looks likeWhat challenges Arlington faces in providing committed affordable housingWhat you can do*

Thank you!For more information, including sourcing and list-serve sign up www.AllianceforHousingSolutions.orgFor more on Arlington County housing assistance serviceshttp://bit.ly/Kry4dLTo learn about nonprofit providers serving ArlingtonAHCInc.orgAHC, Inc.APAH.orgArlington Partnership for Affordable HousingWesleyHousing.orgWesley Housing Development CorpRPJhousing.orgRPJ HousingCPDC.orgCommunity Preservation and Development Corporation

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