| EXECUTIVE SUMMARY
The Affordable Housing Progress Report is a preliminary report on the status of affordable housing needs in the Washington, D.C. region. It provides guidance to area jurisdications on housing policies that have the potential to respond to the affordable housing crisis. Although each of the nine jurisdictions in the Washington, D.C. metropolitan region has a different style of governance, there is a set of solutions-implemented locally and nationally-that can provide a range of housing choices for everyone, from young working families to grandparents on fixed incomes.
Building and rehabilitating more housing overall, and investing in affordable housing in particular, ensures that businesses can attract and keep high-quality workers. Affordable housing strengthens our communities by guaranteeing that the full range of residents has decent housing, everyone from our children to our grandparents. Building and preserving needed housing in existing communities also protects our environment by guiding growth toward existing cities and towns and away from farms and forest lands.
Finding #1: The current and on going need for affordable housing in the Washington, D.C. region is great.
Like most metropolitan areas in the United States, a majority of the households in the Washington, D.C., region are overburdened with their housing costs, especially in Fairfax County where 67 percent of households with low incomes pay more than 35 percent of their income in rental costs.
Based on job forecasts of the Metropolitan Washington Council of Governments (MWCOG), the region is projected to need more than 300,000 new housing units by 2010, 20 percent of which should be affordable.
Many counties also have a disparity between their population size and their affordable housing supply. For instance, the District of Columbia has only 14 percent of the region's population, whereas it has 23 percent of the region's affordable housing supply. Conversely, Fairfax County has 23 percent of the region's population and only 12 percent of the region's supply of affordable housing.
There is a jobs-housing imbalance in the region. Some counties have significantly more affordable housing with fewer job opportunities, whereas other counties have more jobs than housing. For example, Prince William and Prince George's Counties have more affordable housing but fewer job opportunities. Arlington County is the opposite-the county has more jobs than housing for those employees.
Finding #2: A fair share allocation of affordable housing is a crucial first step in addressing the region-wide affordable housing crisis and its implications.
To address the affordability crisis, each jurisdiction needs to provide enough affordable housing to support the needs of its residents and employers. Imbalances between the location of jobs and housing increases traffic and reduces access to jobs, especially for those who rely on public transportation. A model exists for calculating a jurisdiction's fair share of affordable housing. The model is based on the average of each jurisdiction's share of projected household and job growth. According to the projected growth estimates, Fairfax County's fair share allocation by 2010 is more than 15,000 affordable units, whereas Frederick County's is more than 2,000.
Finding #3: Four nationally recognized affordable housing policies have the potential to significantly contribute to producing affordable housing in the Washington, D.C. region.
Inclusionary Zoning, which is used in numerous communities, including Montgomery County, requires market-rate developments to include a certain percentage of moderate income housing. The effectiveness of a mandatory inclusionary zoning policy depends on the household income targets established, the percent set aside for affordable housing, and the size of development that will trigger the policy. Montgomery County's mandatory inclusionary zoning policy, or moderately priced dwelling unit (MPDU) program, is the exemplar of the Washington, D.C. region and is highly regarded throughout the country. In contrast, voluntary programs have been found to be largely ineffective.
Dedicated Funding Sources ensure that a reliable annual source of revenue is available to produce and preserve affordable housing. Affordable Housing Trust Funds can have dedicated funds for affordable housing. Two jurisdictions, Montgomery County and the District of Columbia, have recently enacted laws to dedicate substantial amounts of money to housing trust funds, which in the past relied on annual appropriations for funding. Montgomery County has enacted a law that earmarks 2.5 percent of the property tax or $16 million, whichever is largest, to the trust fund. Similarly, the District of Columbia established that 15 percent of the real estate tax and recordation fees would be dedicated to the Housing Production Trust Fund. However, this act has not yet been fully implemented.
Other potential untapped revenue sources are Jobs-Housing Linkage fees and Tax Increment Financing (TIF).
Zoning for Housing Choices allows more units to be provided in more appropriate locations. Too often, zoning rules unnecessarily constrain the supply of housing in desirable locations, such as next to areas well served by public transportation or near a downtown district. Zoning for transit-oriented development (TOD) encourages affordable housing development and a diversity of housing types in accessible locations at densities sufficient to support efficient bus or rail transit. This serves families better by offering a variety of affordable travel choices. The Rosslyn-Ballston Metro Corridor in Arlington County is a national model for smart growth principles, including compact, transit-oriented zoning. Given the success of the county's policies to accommodate tremendous demand for new housing and jobs, more aggressive policies are needed to ensure a sufficient amount of affordable housing is preserved and constructed in order to maintain a diverse community and provide a fair share of affordable housing opportunities.
Other land use constraints on providing more affordable housing include outright bans or burdensome regulations for creating accessory apartments, or "granny flats," provided either as a separate unit on the property or in the same owner-occupied house. Accessory units provide an opportunity to increase and diversify the affordable housing supply in existing neighborhoods in a way that is almost undetectable in appearance. Legal accessory apartments can make homeownership more affordable because the rental revenues can be counted as income for mortgage loans. Montgomery County is currently revising its regulations to ease the burden on creating accessory apartments.
Affordable Housing Preservation policies stabilize a jurisdiction's affordable housing supply during rapidly changing housing markets. Policies practiced in the Washington area to address this need include: Arlington County's anti-displacement policies for the Rosslyn-Ballston Corridor and D.C.'s tenant right to purchase, moderate rent control law, and property tax relief for low income, senior and persons with disabilities households. These preservation policies attempt to protect renters and homeowners from sharp increases in rents, property taxes or outright displacement. As D.C.'s and the inner suburbs' housing markets become more attractive, displacement will become be a greater problem. Except for D.C.'s long-standing tenant protections, the region has little experience in policies that preserve housing affordability in place.
It is also evident that jurisdictions need to identify publicly assisted housing and affordable private developments that are at risk of being converted to market rate and create a plan for preserving them. Jurisdictions can enact laws to stabilize privately owned rental housing, including rental housing conversion restrictions, moderation of rent increases, an emergency rental assistance fund, and tax credits for low income renters and owners.
Finding #4: No jurisdictions in the region have adopted a comprehensive affordable housing strategy or adopted all four policies evaluated in the Affordable Housing Progress Report.
As indicated throughout this document, a few jurisdictions have adopted some policies that are demonstrated successes. Recently, Arlington County has created a promising approach to a comprehensive affordable housing strategy. The assessment and goals created in this process are a model for other jurisdictions. Identifying the policy tools to meet the goals, however, is urgent unfinished business for Arlington, and the rest of the region. It is critical that local jurisdictions learn from each other and create a comprehensive affordable housing strategy that addresses all of the region's affordable housing needs.
See formula in Appendix A and B, and methodology description in endnote 17. | |
