Affordable Housing Master Plan Is Unaffordable

The Arlington Affordable Housing Master Plan (AHMP) has admirable goals, principal among them that: “Arlington County shall have an adequate supply of housing available to meet community needs.”

The question is whether constructing 15,800 CAFs in the next 25 years is feasible and affordable. If not, then the plan should be scrapped.

AHMP is predicated on the assumption that densification reduces housing costs. Yet long time civic activist Suzanne Sundburg has demonstrated that densification has just the opposite effect.

Pointing to the fact that the 3,000 CAFs constructed in the past decade have not met the loss of more than 13,000 market rate affordable units since 2000, she described the situation in a recent letter to County Board with the following analogy.

“No matter how fast a dog runs, it can’t catch its own tail. And using “bonus” and other density to add CAFs works the same way. More density 1) inflates land values, 2) raises housing prices, and 3) destroys MARKs at a faster rate than CAFs can be added. Doing more of the same on a larger scale and expecting a different result isn’t a ‘plan’ but it is a good definiton for ‘insanity.’”

So much for feasibility. Then there is the question of cost. While the plan itself provides no cost estimate, you can guesstimate the annual cost using some available numbers:

• new CAF construction—$58.2 million per year, discounted to reflect the payback of existing CAF construction loans
(632 units per year x $100,000 per unit less $5 million per year AHIF loan payback);

• average annual rent subsidy for new CAF residents–$17.3 million
(632 units added annually x $7,000 average subsidy x .30 proportion subsidized*325)/25 ;

• annual school subsidy–$21.3 million
($20,000 per student x 1,064 new students per year,
Assuming:
472 CAF units for new county residents per year and CAF student generation factor of .8;
8,569 new market rate units and market rate student generation factor of .08, i.e. 472*.8+8569*.08=1064 );

• School construction outlay for one 725 seat elementary school per year–$50 million;

The total–$146.8 million per year exclusive of transportation and other impacts–is simply unaffordable. The fact that the County is trying to sell this plan without a price tag should send a message to the voters—Caveat Emptor–let the buyer beware!

Voters should instead lobby for Sundburg’s recommended solution to the housing crisis:

1. Stop building CAFs. Private developers can build units more cheaply than can the county, so limit new construction to onsite affordable units in market-rate developments.
Using the RSMeans online QuickCost Estimator tool, the cost in Arlington to construct a 6-story, 180,000 square foot apartment building with 200 units ranges from $24 million to $30 million, or $135,00 to $170,000 per unit.

By contrast Arlington CAFs’ recent per-unit construction costs have ranged from over $250,000 (Arlington Mill) to over $270,000 (The Springs), without land acquisition costs. According to GMU’s 2014 Assessment of Arlington’s affordable housing program and policies, the CAF financing gap is increasing. The average estimated cost of $85,000–$100,000 per unit—the amount that we must finance using local dollars—will only grow larger based on the AHMP’s focus on producing units at 60% AMI, a higher percentage of family-size units, and locating CAFs in more expensive areas like the R-B corridor.

2. Redirect AHIF dollars to purchase the few remaining MARKs. According to the recent Development Forum presentation (see slide 28), there were only 3,437 MARKs left countywide (as of 2013) that are affordable to households earning less than 60% AMI. This would give us a better chance of preserving what remains and protect those already living in Arlington. Pursuing an unachievable target (adding 12,363 new CAFs) to make up for historic losses means that we are much more likely to lose all the remaining MARK housing. Focus limited resources on what can actually be saved and those who are actually living here right now rather than the many who want to move here.

3. Reallocate AHIF funds to expand housing grants, because unlike CAF rentals, housing grants can be targeted to current Arlington residents (with stronger oversight than is permitted/required under the HUD Section 8/Housing Choice Voucher program). Currently, 80% of housing grant funds are used to subsidize the rent of very low income elderly, disabled and families who live in Arlington. These CAF residents pay 40% of their income (if they have any) for housing. Shifting the use of taxpayer funds from construction to rent subsidies could enable Arlington to provide more support to those in greatest need who are already living in our community today.

4. Encourage developer construction of on-site affordable units rather than off-site construction or contributions to AHIF— to guarantee a more equitable geographic distribution of units. Rather than concentrating affordable units in certain buildings or areas through AHIF-funded construction of new CAFs, this method guarantees that new CAFs will be dispersed amongst all the new buildings coming online countywide—and at an overall lower cost per unit.

5. Broaden the focus of housing efforts to include a greater emphasis on aging-in-place/supportive housing. Return the real estate tax deferral/relief program for the elderly and disabled to the Commissioner of the Revenue, who will expand the program to a greater number of eligible seniors.

Include more strategies to address supportive or group housing for those residents with severe mental or physical impairment, including the increasing number of autistic children who will not be able to live independently once they reach adulthood.

6. Perform a comprehensive fiscal impact analysis of the plan including its impact on schools (e.g. the students generated by all the market-rate housing needed to produce/preserve affordable units). Failing to provide realistic cost projections (with the exception of general fund revenue needed for AHIF) borders on malfeasance and is hardly a recipe for success, if the true goal is preserving affordable housing.

7. Acquire more public land to meet the needs of a growing population. Parkland isn’t a luxury but a necessity. Without it we are building slums not communities.

In sum the AHMP is a political ploy to make people feel good as they are being recycled out of the county. It solves a political problem by papering over the gentrification that continues apace.

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