WPost: Too Poor for Hot Housing Market, Too Affluent for Buyer Assistance

Too Poor for Hot Housing Market, Too Affluent for Buyer Assistance
By Cameron W. Barr and Annie Gowen
Washington Post Staff Writers
Thursday, December 1, 2005; A01

Photo:

Caption:
Renter Gwendolyn Halford, foreground, studies the kitchen of a Silver
Spring home with agents Michelle Velilla, left, and Sadie Mungro.
Photo Credit: By Melina Mara -- The Washington Post Photo

For half a decade, Gwendolyn Halford, a 48-year-old librarian for a
federal agency, has searched several Washington suburbs for a home to
buy. With an annual salary of about $60,000, she is too well-off to
qualify for most affordable housing programs, but she lacks the means
to purchase something she likes on the open market.

So she remains a renter, frustrated by the actions of elected
officials. "You are allowing developers to come in to build condo units
and homes at prices that a large percentage of the population can't
afford," she said. "So what is going on here?"

Across the region, government leaders have heard some version of that
question. They are scrambling to provide "workforce housing" --
price-controlled homes for families with high five- and even six-figure
incomes.

The Montgomery County Council is considering a bill that would require
developers of sites near Metro stations to expand their projects by
about 8 percent to add workforce units at below-market prices. A family
of four with a salary of $90,000, under one scenario, would pay
$300,000 for a townhouse. The median price for a new townhouse in
Montgomery during the first quarter of this year was nearly $460,000.

The Alexandria City Council voted in November to lend a city-supported
nonprofit organization $12.8 million to buy the Gunston Hall apartment
complex, which officials hope will include rental units for residents
whose salaries disqualify them from public housing. In the District,
Mayor Anthony A. Williams's recently launched New Communities
initiative would remake the struggling Sursum Corda neighborhood into a
mix of 1,700 homes, a third of them reserved for moderate-income
residents.

New York has for decades helped provide housing for city residents with
moderate incomes, but officials in the Washington area have long
concentrated their housing initiatives on the poor. The new workforce
efforts "do represent the first strong moves in government helping out
with housing people at middle incomes," said Tad Baldwin, an advocate
for affordable housing in the District and Montgomery.

In Montgomery, where Halford hopes to buy, about 66,200 households have
salaries that are 80 to 120 percent of the Washington area's median
income -- $89,300 for a family of four -- which is one way of defining
the workforce category. These households account for a fifth of the
county's population.

For elected officials, the upside of these initiatives is undeniable.
The beneficiaries are mainly public employees who can't afford to live
where they work and employers who complain that housing costs force
workers to commute too far or leave. Helping a firefighter, teacher or
librarian buy a house is the sort of goal few politicians would fail to
embrace, given the votes commanded by public employee unions.

But the motivation goes beyond politics. In jurisdictions where housing
prices have soared, the need is genuine. Officials are also contending
with reduced federal spending on affordable housing programs and an
escalating real estate market that encourages owners of rental
complexes to convert them into condominiums.

Affordable housing advocates welcome the fresh attention to the plight
of people who cannot buy or rent in the Washington area, but they worry
about local governments expending too much political energy and
resources on the middle class.

"We certainly acknowledge that middle-income families in Montgomery
have trouble finding affordable homes," D. Scott Minton, executive
director of the Housing Opportunities Commission, Montgomery's public
housing agency, told the County Council last week. "Imagine then what
faces the county's low-income families."

"We are concerned the poor are going to get left behind," Baldwin said.

Definitions Differ
Although the local housing market appears now to be cooling, the median
price for a house in much of the region remains well above $400,000.
People such as Halford say they are priced out of something that by
rights should be theirs. In her case, that means a two-bedroom
condominium with two bathrooms, a washer and dryer and secure parking.

"I don't think that's asking a lot," she said. She'll settle for less:
one bathroom and a hookup for the washer and dryer.

There is no unanimity on what workforce housing means. In some areas,
it is a new, more politically salable name for affordable housing.
Elsewhere it is about helping those who are too rich to qualify and too
poor to buy. And as some jurisdictions focus efforts directly on
government workers, others aim their programs more broadly.

The District, for instance, uses workforce to mean those with salaries
40 to 80 percent of the area's median income. "When you get into 120
[percent], those folks are generally making upwards of six digits,"
said Stanley Jackson, deputy mayor for planning and economic
development and a former housing director. "We have a huge population
here of folks who are making substantially less than that. Some of our
[government] workers are making substantially less than that."

Officials in Alexandria have not defined what they mean by workforce.
In Montgomery, a bill introduced by council member Steven A. Silverman
(D-At Large) would apply to households with salaries that are 120
percent of the area median income or less, meaning that a family of
four with an income of $107,000 would qualify.

At an October conference in the District on "inclusionary zoning" --
the practice of requiring developers to include price-controlled units
in market-rate developments -- urban policy consultant David Rusk
offered some advice to policymakers: "Advocate [inclusionary zoning]
primarily as meeting workforce housing needs rather than advancing
social justice," he said in a keynote speech, although he urged
listeners to maintain their commitment to affordable housing for the
poor.

In Montgomery, where Silverman and former council member Isiah Leggett
are seeking the Democratic nomination for county executive, the debate
is about kinds of workforce housing, with little discussion of options
for the poor.

They rarely acknowledge that Montgomery's affordable housing programs
for low-income residents are treading water. The county's inclusionary
zoning program, a national model, has produced more than 11,000
price-controlled units since 1974, more than a quarter of the total
produced in the United States.

But officials and experts say Montgomery now must struggle to maintain
its affordable housing stock. In recent years, as the pace of
development has subsided, only 200 or so new price-controlled units
have come online annually.

Nearly 17,000 names are on closed waiting lists maintained by
Montgomery's Housing Opportunities Commission to track those seeking
public housing or federally funded vouchers for low-income renters.

Last year, nearly half of the $21 million in disbursements from
Montgomery's Housing Initiative Fund went to buy and renovate apartment
buildings that officials considered "threatened." In many cases, the
threat came from an owner who intended to convert affordable apartments
into luxury units.

"We have a need for tens of thousands of affordable and workforce units
here," Leggett said. He argued that Silverman's plan amounts to
"nibbling around the edges" of the problem and proposed that the county
develop entire projects of price-controlled housing.

Silverman countered that Leggett's idea is vague and unworkable and
said his own proposal will "create middle-class housing units as soon
as buildings are built."

'Expanding Our Focus'
In Fairfax County, the Board of Supervisors voted recently to consider
expansion of its affordable housing policy. It now requires some
developers of low or mid-rise buildings to allocate a percentage of the
apartments or condominium units as affordable housing. Officials are
looking at applying the requirement to high-rises, mostly around Metro
stations. The demand for the county's 1,957 homes and apartments is so
high that applicants are chosen by lottery.

Supervisor Catherine M. Hudgins (D-Hunter Mill) said she hopes the
county will increase the income levels of those applying for the
high-rise program to appeal to teachers, law enforcement officers and
other middle-class residents.

"We're not shifting our focus -- we're expanding our focus," Hudgins
said.

In Arlington County, officials have continued to increase funds going
to traditional affordable housing as they try to address workforce
housing with an assistance program for moderate-income homebuyers.

Meanwhile, the county has lost about 10,000 apartments that would be
affordable to those whose salaries are 60 percent of the area's median
income or below, said County Board Vice Chairman Chris Zimmerman (D).
Cheaper apartments are far more scarce. Of more than 42,000 rental
units in the county, only about 200 are priced at a level that a person
whose salary is 40 percent of the area's median income could afford.

"When we talk about the housing we've lost, the greatest losses are at
the lowest levels of income," Zimmerman said. He said he was "concerned
that we not lose sight of the fact that the most desperate needs are
still at these lower income levels."

Halford, the librarian, saw a two-bedroom condominium in a Silver
Spring high-rise Friday. Looking past the tired brown carpet, the dated
appliances, the "little bug" crawling in a kitchen drawer, she saw some
potential. But for $199,000, she said, "I would want it to be in better
condition than that."

Staff writer Debbi Wilgoren contributed to this report.