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State, Regional Leaders Join Affordable Housing Push

Published on: 12/02/2022

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Government groups and leaders at every level are adopting plans to tackle the region and country’s affordable housing crisis, showing a range of answers not only to the question of how to make housing more attainable, but why it has gotten so expensive.

The latest proposals come from the Metropolitan Washington Council of Governments and Gov. Glenn Youngkin.

At the Virginia Governor’s Housing Conference on Nov. 18, Youngkin announced his “Make Virginia Home” plan, built largely on incentivizing localities to curb zoning law, streamlining state environmental review, establishing public/private partnerships with business site selectors to get workforce housing included early in their process, and possibly modifying the state building code to cut construction costs.

“For far too long, Virginians have faced unnecessary burdens that have limited their housing options and opportunities. Today’s plan is a needed step to improve housing options and keeps my commitment to lower the cost of living and make Virginia the best place to live, work, and raise a family,” Youngkin stated in a press release announcing the plan.

The specifics for now are unclear. Youngkin has said he will introduce legislation during the 2023 General Assembly session. But he has indicated he does not plan to put more state money into the project, and without more funding, attainable housing experts are skeptical those ideas will move the needle.

“I was there when he gave the speech at the housing conference—I did not hear a plan,” said Northern Virginia Affordable Housing Alliance Executive Director Michelle Krocker. “I heard a lot of interesting ideas. I heard him make the case for the connection between housing and economic development, which is certainly not new at all.”

That connection was a crucial part of the last administration’s successful effort to attract Amazon’s HQ2 to Northern Virginia, and has been at the center of a renewed, business-led push for attainable housing—which they call workforce housing—here in Loudoun. The Community Foundation for Loudoun and Northern Fauquier County’s “Workforce Housing Now” initiative, partnered with local businesses, is the latest push in a years-long effort to develop more attainable housing for employees of the businesses that pay those middle- and low-income salaries.

And there are two sides to the housing cost problem—the price of a home, and the money people have available to spend on it.

In real terms, the country’s minimum wage peaked in 1968, when it was $1.60 per hour. According to the Bureau of Labor Statistics, that’s the equivalent of $13.98 in today’s money—almost double the current federal minimum wage of $7.25. Under legislation passed in 2020, Virginia is gradually scaling up the state minimum wage to $15 per hour in 2027, and automatically increasing it with the Consumer Price Index thereafter.

Since that time, incomes have remained almost flat. According to the Census Bureau, the 1970 household median income in the U.S. was $8,734—or $63,080 in July 2021 dollars. Meanwhile the 2021 household median income was $70,784, marking only a 12% growth in median income over more than six decades. Some of that progress has since been wiped out by high inflation.

That also means people at the lower end of the income scale—the half of the population below the median income—have seen their incomes shrink in that time.

But home prices have not. The 1970 median home value was $17,000, or $122,779 in July 2021 dollars. The actual 2021 median home value was $281,400, marking growth of 129%, or more than double. That also means that where the 1970 household median income was just over half the median home value, the 2021 income was a quarter of the home value.

Things are even more dire in Loudoun, where the high $153,506 median income is still even further behind the $648,400 median home value. But wages are not something localities can regulate in Virginia.

Krocker said flat incomes couple with a shortage of housing in the region to make pricing unaffordable for many, while redevelopment continues to push to prices even of existing housing higher.

“Incomes are not keeping up with the cost of housing, and our supply is anemic, so those are things that are kind of the macro factors that have made it so difficult for people to afford housing,” she said. And because the region isn’t keeping up with the demand for housing, she said, older homes that might be more affordable are being purchased, renovated or rebuilt, and put back on the market at higher prices.

“This has been a trend that’s been growing, and it’s been exacerbated in our area because we’re so low in housing supply,” she said. “On top of all that, we have in many of our communities existing neighborhoods who say, ‘we don’t want any more development, we don’t want to see any more houses, there’s traffic, there’s pressure on our schools,’ et cetera. So now you have this added dimension of community opposition.”

That means localities in the region are focused not only on encouraging new affordable housing development, but helping buy up existing housing to keep it affordable.

The housing cost crisis also has a history strongly rooted in racism, Krocker noted, with many communities historically closed to people of color.

“This notion of redlining is a throughline that goes from 100 years ago. You can see the throughline of where Black and brown people weren’t allowed to buy into neighborhoods or into communities, and so how do we rectify that,” she said. “One of the solutions is to open up that single-family zoning to allow us to put maybe a duplex or a triplex in that single-family detached neighborhood.”

She said based on her own experience—living in a single family detached home, across the street from a duplex and down the street from an apartment building, in the Alexandria neighborhood of Del Ray where homes are selling for more than a million dollars—that doesn’t have to hurt existing home values.

And in a region of commuters, governments and attainable housing advocates are working across county and city lines.
A New Regional Vision

Newly-built price-controlled apartments at Heronview, developed by the Windy Hill Foundation and Flatiron Partners at the Kincora development, pictured in April 2019.

The latest proposal comes from the Metropolitan Washington Council of Governments, a group of elected leaders from among 24 jurisdictions in Maryland, Virginia and the District of Columbia, which is finalizing a Regional Housing Equity Plan as a guide for member jurisdictions.

The plan, a voluntary collaboration among eight regional jurisdictions including Loudoun to achieve unified goals around fair housing, represents the first time in 25 years that the region's localities have come together to address disparities in access to housing opportunity, according to MWCOG. Its range of goals include zoning reform, protecting existing affordable housing, reducing discriminatory barriers to access, and making public transportation more accessible and affordable.

MWCOG staff hope to make final revisions to the plan, send it to local jurisdictions for approval and then to the U.S. Department of Housing and Urban Development by April of 2023. MWCOG Housing Programs Manager Hillary Chapman said during the MWCOG Board of Directors meeting Nov. 9 said at HUD, the plan has the potential to shape housing planning across the country. And Loudoun’s representatives on the regional board, Supervisor Juli E. Briskman (D-Algonkian) and Loudoun Chair Phyllis J. Randall (D-At Large), pushed to go yet further, such as more focus on helping people get out of renting and into homeownership.

Randall often discusses the difference between renting a home and owning one, allowing people to build their equity and wealth. It’s a piece missing from many new affordable housing developments, and many new large-scale developments generally. Plans for Rivana at Innovation Station, a project supervisors have cheered and one of the largest in Loudoun’s history, has no for-sale units among its planned 2,700 residential units

“We collectively as a region have done a terrible job on affordable homeownership. Nobody’s cracked that nut, nobody’s figured out how to do that,” Krocker said.

Strategies for Success

The price-controlled homes at Ashburn Chase at a ribbon cutting event Oct. 5, 2020.

Some strategies are already showing some success.

The Loudoun Board of Supervisors adopted its Unmet Housing Needs Strategic Plan in September 2021, laying out a broad range of strategies to tackle the county’s housing cost problem. It’s a five-year plan looking at housing goals over a 20-year timeframe. Already many of the goals in that plan are done or underway, such as waiving permit fees on affordable housing development, inventorying the county’s publicly-owned lands with an eye toward possibly using it for attainable housing, steering cigarette tax revenues into affordable housing programs, and launching the Rental Housing Acquisition and Preservation Loan Program to help developers finance the cost of buying existing affordable rental housing to keep it available.

The county also already offers programs for potential homebuyers, such as the Down Payment/Closing Cost Assistance loan program and the Sponsoring Partnerships and Revitalizing Communities low-interest mortgage loan program.

Some of the strategies in Loudoun’s plan have already seen success in other areas, such as the idea of using publicly owned land to develop affordable housing. That has already happened in Fairfax County, Krocker noted, both by building on undeveloped land and by locating housing at facilities like fire stations and community centers.

“That takes the cost of land out of the equation, which is probably upwards of 40% of your development cost,” she said.

And she said she has seen a new generation of leaders arise in the region, willing to tackle the problem with more creative solutions, and willing to spend money to do it. Meanwhile affordable housing developers, spurred on by public investment, are purchasing or building homes with a complicated assortment of funding sources, ranging from the local Housing Trust Fund to federal programs.

“There are a multitude of plans, but there are common threads in all of those plans, and I think there was an understanding regionally that we had to come together and tackle this,” she said. “Because people live in one jurisdiction and maybe work in another, and there is a willingness to learn from each other, elected officials learning what’s working where. What works in a very urban area like Arlington is not going to necessarily work in Loudoun County, but you can take elements of that.”

And, she said, “the need is enormous.”

“People continue to struggle to afford shelter, and we have people who are paying 70% or 80% of their take-home pay on their rent. And that’s just not productive for any community, so we have to continue to look at what are the tools at our disposal, how can we be smarter, how can we do this more efficiently.”

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Source Url :https://www.loudounnow.com/news/state-regional-leaders-join-affordable-housing-push/article_d061416e-719f-11ed-afae-df67b7333349.html

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