PRESS RELEASE: Barcroft Apartments: The Most Expensive Affordable Housing To Come Down the Pike

Comments At Arlington County Board Meeting, December 16, 2023.

The Barcroft Apartments Affordable Housing Financing Plan (AHFP) is an enormously complex deal to restructure the original Barcroft Apartments purchase loans to enable buyer Jair Lynch to qualify for money from VHDA to renovate some of the units.

The documents describing this deal consist of dozens of pages of single spaced legalese first made available to the public on about December 14, 2023. Aside from the lack of transparency in providing such short notice, there are serious questions about the long term financial viability of Jair Lynch’s plans to renovate the site.

For example, in explaining why it can’t provide more than 134 CAF units available at 30% AMI, the staff report says:

“For example, debt service on the $150 million line of credit the County used to fund the original loan to JLREP currently carries $9 million in annual debt service (interest only). This is more than four times what was originally projected for FY2023 in 2021. The difference is coming directly out of the County’s annual AHIF appropriation. This puts a strain on the ability for the County to undertake new affordable housing projects (p.15).”

That’s an understatement considering that AHIF’s total appropriation for FY2024 is $20.5 million (p.23).

Another issue is the cost of renovating 93 units, which Jair Lynch puts at about $26.7 million (p. 2). Add to that the $29.6 million acquisition cost of the units and the total per unit cost comes to more than $600,000.

Compare this cost to the per unit cost of new apartments at Gilliam Place—about $410,000 in 2019, Queens Court–$439,000 in 2021 (p.2, 5), and Ballston Station–$583,000 in 2023.

The exorbitant per unit cost of Barcroft Apartments is due to the grossly inflated purchase price of $425 million or 3 times the $138 million assessed value of the dilapidated property at the time of sale.

Jair Lynch insists that the bidding process was competitive. Forget that the original slumlord was gifted $425 million for 75 years of neglect. Stakeholders should get over it and move on.

That may not be possible, considering that these cost estimates are only for 93 of the 1335 units. At the same rate the cost of renovating the remaining units would be over $350 million, or 17 times AHIF’s annual budget.