Category: Affordable Housing

Redeveloping McMillan is the only way to save it

Posted on by Andrew Brown

At a recent public hearing, neighbors of McMillan Sand Filtration Site renewed calls to make it a park. But the only way that can happen is by developing part of it as a neighborhood, and it’s up to the DC Council to make it happen.


Rendering of the future McMillan Park.

Residents filled a June 6 public hearing held by the Office of the Deputy Mayor for Planning and Economic Development to oppose plans to sell the derelict 25-acre site to Vision McMillan Partners, who will build homes, shops, offices and a park there. But others, including Councilmember Kenyan McDuffieand groups like the Coalition for Smarter Growth say it’s the best way to bring McMillan back to life.

It would be prohibitively expensive just to make McMillan a park. Since the underground cells are made of unreinforced concrete, they would have to be demolished and rebuilt just to make them safe to enter. Allowing some private development will give the neighborhood new amenities while paying to keep the best of what’s already there.

Plan preserves historic structures while creating new park

VMP’s plan preserves all 24 of the plant’s above-ground structures, including the vine-covered sand silos visible from North Capitol Street, along with 2 of the below-ground filtration cells. 2/3 of the site will remain open space, while the southern third will become an 8-acre public park with a pool, recreation center, and a community center with meeting rooms and an art gallery. VMP promises that this will be “one of the largest and best-designed public park spaces in the District.”


Proposed site plan of McMillan redevelopment.

The historic buildings will become part of a new neighborhood with about 800 apartments and townhomes, half of which will be set aside for families making between 50 and 80% of the area’s median income. There will also be street-level, neighborhood-serving retail anchored by a 50,000-square-foot, full-service grocery store. Along Michigan Avenue, there will be taller office buildings with a medical focus, taking advantage of proximity to Washington Hospital Center across the street.

To make this happen, however, the DC Council must decide this fall whether to declare the land as surplus and “dispose” of it. They can do this either by selling it to VMP or granting it as-is to VMP under existing zoning, which wouldn’t allow major redevelopment to occur. They could also divide the property and sell off the parts to different owners and under different zoning. They can do all of this in a single set of hearings and votes, and they should to ensure that this process happens as quickly and fairly as possible.


This rendering shows how new and old buildings will coexist at McMillan.

Throughout the summer and fall, the council will hold separate public hearings on whether to surplus McMillan and the details of VMP’s plan. Meanwhile, the DC Historic Preservation Review Board is reviewing VMP’s plan to redevelop the site with housing, shops, offices and an 8-acre park and will hold hearings about it this month and in September. They’ve already offered comments about the proposal and will make their recommendations before the end of the year.

Plan will improve stormwater collection, traffic

Groups like Friends of McMillan Park and the DC Chapter of the Sierra Club argued that McMillan is already a public space and should become a public park. However, one DMPED official I spoke to after the hearing said that the city can’t afford to do the work necessary to make the site safe for public occupancy. If the District retains ownership, the site would most likely remain decrepit and fenced off indefinitely.


All 24 of the site’s historic above-ground structures will be preserved.

Opponents maintain that the site’s underground cells are needed to retain stormwater, mitigating the effects of frequent floods in Bloomingdale, which is downstream from McMillan. But DC Water already plans to replace two of the cells with water storage tanks, which will remain after redevelopment. Meanwhile, VMP has also promised to incorporate stormwater retention and buffers into the buildings and landscaping on the site, reducing stormwater runoff.

Another top complaint was traffic. Residents feel that the neighborhood’s roads are already quite congested, especially at rush hour, and could not handle the extra trips generated by a major office, retail and residential center on the McMillan site. There is no question that the Washington Hospital Center, the city’s largest non-government employer, needs better public transportation service, as it is not located near a Metro station.


Buildings will step down moving south from Michigan Avenue.

VMP plans to build a bus turnaround for shuttles between McMillan and the Brookland Metrorail station, which would operate until a planned streetcar line along Michigan Avenue is built. Moreover, North Capitol Street has been designated a Bus Priority Corridor, meaning that the city intends to make changes to the street design and traffic flows to permit faster and more frequent bus service. The development would also open new through streets across the McMillan site, improving traffic flow and connections within the larger neighborhood.

Ward 5 needs parks, but it needs housing too

Some opponents say that new development should happen elsewhere in Ward 5, like on vacant and abandoned lots along North Capitol Street or Rhode Island Avenue. While not enough resources have been dedicated to encouraging more infill development, there’s no reason why that can’t happen in combination with the redevelopment of McMillan.


Rendering of the completed McMillan Park.

It is true that Ward 5 needs more and higher-quality parks, recreation facilities, and community centers. But the surrounding neighborhoods and the city as a whole are growing and are need more affordable housing, as well as more diverse shopping and entertainment opportunities within walking or biking distance or a short transit ride.

VMP’s current plan reflects the input of community members gathered over the course of several design charrettes that were open to the public. It satisfies the need for several types of amenities in this part of the city in a balanced way. It combines buildings that are in keeping with the surrounding neighborhoods with a large park, and preserves some of the historic filtration cells and all of the silos and brick regulator houses.

We have an opportunity to transform a decrepit former public works site that has been fenced off for over 70 years into a citywide destination: a vibrant and attractive new place to live, work, shop and play that serves many of the needs of residents in this part of DC while incorporating many reminders of its unique history. The Council shouldn’t waste any time taking advantage of it, as an opportunity like this won’t come again soon.

If you’d like to tell DMPED and the Council to surplus McMillan and allow VMP’s plan to happen, you can contact them here. Comments must be received by June 20.

All images courtesy of VMP.

Click here to read the original story>>

Testimony before the D.C. Historic Preservation Review Board, Support for McMillan Sand Filtration Plant Master Plan Update

Posted on by Ted Van Houten

Please accept our testimony on behalf of the Coalition for Smarter Growth. My organization works to ensure that transportation and development decisions in the Washington D.C. region accommodate growth while revitalizing communities, providing more housing and travel choices, and conserving our natural and historic areas.

We wish to express our support for the revised Master Plan for the McMillan Sand Filtration Plant proposal. The new plan takes an already thoughtful plan and provides additional open space and careful treatment of the unique historic resources of the site. The plan will restore and provide public access to key elements of the distinctive historic resources. This would not be possible without the redevelopment program that helps pay for the cost of the restoration.

We recognize that the expansion of park space on the site was in part driven by D.C. Water’s enhancement of stormwater management and flood mitigation efforts. The expanded park space, driven both by D.C. Water and public demand for a larger park, has traded off a significant loss of affordable housing for the space. This is a major disappointment and a loss of D.C.’s use of public lands to address the housing needs of many residents, especially at lower income levels of 60 percent of AMI and below.

Notwithstanding this significant loss, we recognize the important historic preservation, public space, housing, and commercial space contributions of the revised Master Plan. For decades, access to this large area was prohibited, creating a wide gap between surrounding activities and neighborhoods. The revised plan would make this historic resource featured in a major public park a citywide destination.  The Master Plan honors and replicates the historic landscape elements of the Olmsted Walk that have disappeared from the site. We agree with the staff comment that additional work should be done with DDOT to ensure that the Olmsted Walk connection to the sidewalk design is more than a standard sidewalk.  This might require some flexibility in DDOT’s design standards.

The plan appropriately focuses taller office buildings towards Michigan Avenue and tapers building heights and forms as the development moves south to meet rowhouse neighbors. The plan adds separation to the neighborhood to the south with a large public park. Large scale buildings are needed close to Michigan Avenue to give a sense of enclosure and connect to the Washington Hospital Center. Eventually, we hope these new buildings will encourage reconfiguration of the hospital complex to create more pedestrian-oriented designs.

Preservation of Cell 14 and recreation of the Olmstead Walk along North Capitol Street highlight the historic features of the site; however, they should be balanced with the need to support a better pedestrian environment along these busy streets by better connecting the pedestrian to adjacent uses on the site.

The plan for complementary new uses of retail, offices, and residential will strengthen the facing hospital complex and reconnect the site the city. These proposed uses are likely to build upon and amplify the contribution that current hospital center-related activities make to D.C.’s economy and employment base.  While the northern components of the plan better connect the site to its surroundings, the large park and recreated Olmsted Walk also allow the site to stand out as a distinctive and special place.

Overall, we support the revised master plan as a sensitive approach to preserving and making publically accessible this industrial architectural and public works heritage. The housing, retail, and office components help address the needs of a growing city and hospital district. Given that we have already lost a significant number of low income housing units planned in the first Master Plan, we ask that historic design guidance work with existing proposed levels of housing and commercial space, and not force further reductions.  While we would like to see significantly more affordable housing in this plan, the redevelopment plan does contribute to important community and citywide needs. The proposed plan for preservation and development is a compromise to enable the restoration of this distinctive historic resource.

Thank you for your consideration.

Cheryl Cort
Policy Director

Testimony to Ms. Lynn Robeson, Esq., Zoning Hearing Examiner Re: 4831 West Lane LLC, Local Map Amendment G-954 and Development Plan Amendment DPA 13-01

Posted on by Ted Van Houten

Please accept these comments on behalf of the Coalition for Smarter Growth. Our organization works to ensure that transportation and development decisions in the Washington, D.C. region, including the Maryland suburbs, accommodate growth while revitalizing communities, providing more housing and travel choices, and conserving our natural and historic areas.

We want to express our strong support for the West Lane multi-family residential project because it enhances the diversity of housing choices and number of MPDUs within such close proximity to the Bethesda Metro station. This is a great benefit to the county and the region because the building provides more housing, especially affordable housing, in a job-rich area, next to Metro. This reduces overall traffic in the region, shortens commutes, reduces household transportation costs, and gives more moderate income households access to the jobs and amenities of a highly desirable community.

After reviewing the proposed plans and public record, consulting with residents, and walking the site, we believe that the project offers its housing benefits through a sensitive and appropriate approach to the building design. The proposed building provides an attractive contribution to a pedestrian-oriented environment and complements the existing nearby residential buildings.

We are especially pleased to see the building’s relationship to Montgomery Lane which forms a supportive urban pedestrian environment. The existing and planned buildings along the north side of Montgomery Lane form a continuous street edge, which the proposed West Lane building completes. The 12 foot upper story setback provides visual interest to the building and addresses concerns of neighbors. A greater setback is not necessary or desirable. A greater setback will not further enhance the ground-level pedestrian environment. In addition, further unnecessary shrinkage of the building could threaten the number of MPDUs provided, while offering no increased public benefit.

The public use space provided at the corner of West Lane and Montgomery Lane is a good approach if it incorporates the main entrance of the building. The public use space at this location achieves two important objectives. It decreases the mass of the building by stepping back the building’s frontage, but still maintains the important building line along the street edge. It also provides a usable urban public space for people to wait or meet friends. The success of the public use space is dependent upon the entrance of the building opening up onto the public use space.

The appropriately scaled building and the well planned public use space are compatible with the neighborhood. The increased number of units ensures more pedestrians on the street – which is consistent with the Sector Plan and a benefit to all. The Sector Plan’s housing diversity goals are also furthered by the West Lane project. The proposed units are smaller and more affordable than those offered in surrounding buildings and include a substantial number of MPDUs – all within 950 feet of the Metro station.

For all of these reasons, the Coalition for Smarter Growth urges approval of the 4831 West Lane project.

Thank you for your consideration.

Sincerely,

Cheryl Cort
Policy Director

Testimony before the Hon. Muriel Bowser, Chair, Committee on Economic Development and Housing Council of the District of Columbia regarding: DMPED Performance Oversight – affordable housing in public land deals

Posted on by Ted Van Houten

Please accept these comments on behalf of the Coalition for Smarter Growth. We are a regional organization based in the District of Columbia focused on ensuring transportation and development decisions are made with genuine community involvement and accommodate growth while revitalizing communities, providing more housing and travel choices, and conserving our natural and historic areas.

Recommit to leveraging public land dispositions for very low income housing in mixed use projects

Table 1We know that while the city has grown in population and income, low income D.C. residents are experiencing even greater difficulties finding housing they can afford. Thus public lands, and every other realistic tool we have available, should be used to help address this pressing need. Our recent report, Public Land for Public Good, shows that the District has and can do great things with its city-owned land. The creation of mixed income housing opportunities on public land is an important source of affordable housing for our residents.

We highlight the Hine Jr. High School redevelopment project next to the Eastern Market Metro station as a leading example of what a public land disposition should do. The project will offer a great mix of uses, close to 30 percent affordable housing, and a design compatible with a historic district. All of this occurs next to a Metro station, close to the core of the city. The project has been in process since 2008 when the former school site was offered for redevelopment. The project will provide 163,000 square feet of office space, 40,000 s.f. of retail, and a total of 159 housing units. Of the total, 46 units will be affordable, or 29 percent. The mix of affordability for the housing units is a good example of what the city should be seeking in LDAs: 5 units will be affordable at 30 percent AMI, 29 units at 60 percent AMI, 12 units at 80 percent AMI (in lieu of IZ). Other public benefits include reconstruction and opening of a block of C Street SE, and a public plaza along C Street.

The Hine School project pre-dates the current administration. We are concerned that the commitment to affordable housing in recent solicitations for public land dispositions, especially at the lowest income level, is declining. I would be surprised if a DMPED Land Disposition Agreement (LDA) ever again results in 30 percent AMI housing. Current practice by DMPED asks that any residential component meet or exceed Inclusionary Zoning standards of 8-10 percent set aside at 50-80% AMI. IZ is the law and what is required for any residential development. We should expect much more for public land.

Table 1 shows the affordable housing set side and income targeting that was the practice of the last decade for solicitations in public land dispositions. Currently, DMPED’s solicitations provide little of the specificity that was the practice in the past. We urge the council to ensure that we are making the most of the unique opportunity to leverage the value of the District’s land to create more affordable housing through the land disposition process. We ask that the council recommit the District to clearly requesting and prioritizing proposals that offer substantial amounts of affordable housing, including units affordable to those earning 30 percent AMI. As was the practice in the past, we ask that requests specify the city is seeking 20 percent to 30 percent of the total number of residential units affordable at 30 percent and 60 percent AMI for rentals, and up to 80 percent AMI for ownership. We suggest table 2 as a model. In addition, we ask that DMPED better coordinate with other agencies to pool resources to ensure the production of housing affordable at deeply affordable levels as a part of larger mixed income or all-affordable development.

Table2

Management of Affordable Dwelling Units

Since 2009, DHCD created a group to manage affordable dwelling units (ADUs) created through LDAs and Zoning Commission actions, along with IZ units. Given the many challenges to helping moderate and low income households buy and maintain affordable homes, we suggest that this process might be best done through DHCD contracting with a qualified nonprofit. Resale assistance for a price controlled home could benefit from extra attention that a nonprofit could provide to a seller. While we have suggested this for IZ units, we also think that ADU management would similarly benefit.

Thank you for your consideration.

Sincerely,

Cheryl Cort
Policy Director

Testimony before the Hon. Muriel Bowser, Chair, Committee on Economic Development and Housing Council of the District of Columbia regarding: DHCD Performance Oversight – Inclusionary Zoning

Posted on by Ted Van Houten

Please accept these comments on behalf of the Coalition for Smarter Growth. We are a regional organization based in the District of Columbia focused on ensuring transportation and development
decisions are made with genuine community involvement and accommodate growth while revitalizing communities, providing more housing and travel choices, and conserving our natural and historic areas.

We would like to comment on DHCD’s administration of the Inclusionary Zoning program. We have been involved with Inclusionary Zoning (IZ) since its beginning in 2003 and remain committed to ensuring that this important affordable housing program delivers on its promise. We are gratified that IZ is finally becoming a reality on the ground given the delays in issuing regulations, the housing market collapse, and extensive grandfathering. The start up of this program has faced many serious challenges, but we believe all these challenges can be overcome. We first want to remind the Committee of the importance of this affordable housing tool that produces below market rate units in matter of right developments throughout the city with no cash subsidy from the District. Of unique importance, IZ creates below market rate units in neighborhoods where few or no affordable units are likely to be produced in the future. This is a valuable affordable housing tool practiced by hundreds of jurisdictions throughout the country, including Montgomery County. This approach is credited with achieving economic integration is ways that other affordable housing programs are unable to achieve.

Montgomery County’s experience is instructive for looking at D.C.’s pathway to successful implementation. The county has produced over 13,000 IZ units since 1976. Due to short affordability terms, currently only 2,600 units are still affordable at 65 percent area median income (AMI). In addition, another 1,573 IZ units that were purchased by the county’s housing authority are rented to lower income families (this is through a provision in the county’s law that D.C.’s prohibits). The county’s IZ program provides nearly half of its affordable housing production. Among the changes the county has made to its program over the years are: extending the affordability term to 30 years for ownership and 99 years for rental; allowing income targeting to rise from 65 percent AMI to 70 percent AMI for high rise construction, and elimination of a troubled buy-out provision that allowed fees in lieu of on-site construction of units.

Administration of D.C.’s IZ program requires urgent and specific attention to ensure that as the over 900 units come online in the next 5 years, implementation will be smooth for all parties. We now face three key administrative challenges that can be fixed: severe understaffing, FHA rules, and overly rigid administrative regulations. Below are our recommendations for these key challenges.

Administrative problems that must be resolved immediately

1. Severe understaffing –1-2 overworked staff members are struggling to launch a new IZ program and provide oversight for roughly 2,000 affordable dwelling units (ADUs) already built or in process, created by PUDs (in lieu of IZ) and public land dispositions. Staff will be difficult to retain and attract if capacity is way below a realistic workload. Program applicants and developers will also not get the assistance they require.

Recommendation: Budget more staff and contract to a qualified homeownership organization
experienced in permanent affordability:

a. Add 2 additional staff positions;
b. Contract with a nonprofit group experienced in managing the homeownership purchase process and stewarding permanently affordable homes. Given the extra challenges of affordable home purchasing in a post-2008 economy, more assistance to homebuyers is needed to speed up the sales process. A nonprofit experienced in selling and stewarding permanently affordable homes could manage the homebuyer recruitment, preparation, qualification, selection and placement process. This nonprofit can also provide effective relationships with mortgage lenders and developers to secure financing, along with ongoing stewardship, enforcement, and resale assistance. This kind of close working relationship with buyers and owners is likely going to be more effectively created through a nonprofit dedicated to successful affordable homeownership and permanent affordability than a government agency;
c. Sustain housing counseling assistance for IZ applicants.

2. FHA conflict with local covenants regarding foreclosure – The Zoning Commission has revised the regulations to conform with FHA rules, and DHCD is working to get FHA’s final approval. After FHA clarifies its acceptance of the D.C. program, DHCD needs to educate mortgage lenders and recruit them to offer mortgages for IZ units. Bank of America, for example, reviews and approves IZ programs for their mortgage lending. DHCD should ensure that D.C.’s IZ program gets onto Bank of America approved list, along other lenders’ lists.

3. Rigid regulations – The administrative regulations are currently being revised but it is urgent that we expedite these revisions given the many barriers they place to an efficient matching process for applicants and units. Given the difficulty matching qualified and interested applicants to units, we suggest suspending overly prescriptive lottery requirements until a lottery is needed to fairly allocate a unit among a larger pool of qualified applicants.

Policy issues for future consideration

Beyond the immediate administrative issues that should be our top priority, longer term policy issues should be considered to fine tune the program. The robust recovery of the housing market in D.C. over the last few years demonstrates that IZ is not a deterrent to housing production. For example, over 4,500 housing unit permits were issued in 2011. This is 64 percent greater than the last peak in the market in 2005 when over 2,750 permits for housing units were issued. D.C. housing production has gone from a few percent to more than half of the region’s residential output.

The experience to date on the development review and financing phase of IZ is that the economics work. Over 900 IZ units are in the pipeline at various stages of development approvals, and construction, with a handful of completed projects. This development pipeline demonstrates that financing for projects subject to IZ is not a problem. IZ policy standards have also contributed to creating approximately 1,000 affordable dwelling units (ADUs) through PUDs since the mid-2000s.

We flag the following policy issues for further assessment, as we act immediately to fix the administrative problems discussed above.

1. Income targeting: Current income targeting is at 80 and 50 percent AMI. Given that market conditions have changed since 2006, is income targeting still at the right levels? How many 50 percent AMI units can we expect to produce? How effective is the 80 percent AMI income targeting in providing units sufficiently below market?

2. Condo fees – while IZ standards have avoided the problems that early ADUs experienced before IZ policies were developed, unpredictable rises in condo fees could pose a problem in the future.

Recommendations:

a. Require par value assessments for condo fees for IZ and ADUs: Rising condo fees over time are potentially a problem even though IZ incorporates an initial fee based on what is projected to be a realistic fee to ensure that the overall housing payment by the buyer does not exceed a certain percent of her or his income. To avoid future excessive increases in condo fees, we suggest requiring that at least for IZ units and ADUs, par value tied to the affordable price of the unit be the basis for assessing the condo fee rather than a square footage basis. This will allow condo fees to rise as inflation and costs rise without subjecting the owner to a rapid escalation that would make the condo fee too expensive for the affordable unit owner.
b. Initial fee setting: This is already addressed by IZ regulations but could affect a building as a whole if a developer sets fees too low to support ongoing building costs. Given this problem for all condo owners, we recommend strengthening consumer protection against lowballing condo fees. Enabling OP and DHCD to comprehensively collect data on condo fee rates from existing buildings would provide these agencies the information they need to appropriately set condo fee rates as a part of the purchase price of an IZ unit or ADU. Secondly, consumer protection for condo purchasers can be improved by changing how the verification of the initial condo fee is set. Currently a certified third party is paid by the developer to verify the fee. We suggest charging the developer a fee that would have been paid to the third party, and have the city contract with a third party directly to verify the condo fee.

Overall, IZ is a sound policy that requires focused attention to address the administrative hurdles to a smooth-running program. The program promises to provide a substantial new source of below market rate housing throughout the city. While the program faces challenges, it is worth the effort. We thank the D.C. Council for its long-standing support for this innovative affordable housing policy.

Thank you for the opportunity to testify.

Cheryl Cort

Policy Director

Testimony before the Prince George’s County House Delegation in Support of PG 420-13: School Facilities Surcharge

Posted on by Andrew Brown

Please accept these comments on behalf of the Coalition for Smarter Growth. Our organization works to ensure that transportation and development decisions in the Washington, D.C. region, including the Maryland suburbs, accommodate growth while revitalizing communities, providing more housing and travel choices, and conserving our natural and historic areas.

We urge you to support Bill PG 420-13 – School Facilities Surcharge, in order to take reasonable measures to catalyze transit-oriented development by removing unnecessary barriers to investment near transit stations. The bill lessens the burdens on multifamily housing construction near major transit stations which is exactly what is needed for Prince George’s to compete for the workforce and employers of the future.

Multifamily units, especially studio units, produce a fraction of the school-aged children that single family housing generates, thus the reduction in the school facilities surcharge will not overburden the county. It will, however, strengthen the tax base by attracting more of the largest segments of our population — young professionals and retirees seeking to live in a more urban, transit-accessible environment.

The recent assessment by the Prince George’s Planning Department in “Where and How We Grow Policy Paper,” urges the county to depart from its historic pattern as a spread out bedroom community. Instead, it urges the county to encourage development in Centers and the Developed Tier by reducing fees. It cites regional growth forecasts showing that economic development and workforce housing preferences will demand a major increase in multifamily housing near transit:

“[M]ore than 79 percent of units in the [County’s] pipeline are single-family detached units intended for the Developing Tier; however, to meet future demand, more than 60 percent of new housing units to be built should be multifamily units located in walkable communities at transit-accessible locations.

“Furthermore…between 2000 and 2010 Prince George’s County acquired one of the lowest numbers of new residents in the region. Without a recalibration of county priorities and policies that promote TOD and high-quality, mixed-use development, it is likely that the county will be at a continued disadvantage relative to its neighbors when it comes to attracting residents and employers who value the connectivity and amenities that other such communities provide.”

Again, we ask that you support Bill PG 420-13 – School Facilities Surcharge. Thank you for your consideration.

Cheryl Cort
Policy Director

A few steps can fix Inclusionary Zoning

Posted on by Ted Van Houten

DC’s Inclusionary Zoning (IZ) affordable housing program has suffered from serious administrative problems in its start-up phase. As a policy, however, it is still sound, and is the right policy for DC’s future.


Photo from 2910 Georgia Ave.A handful of IZ units are on the market, along with over 900 units in the pipeline. There are also 1,000 units that came through the Zoning Commission’s Planned Unit Development (PUDs) process since 2000, using the same policy standards as IZ.

Unfortunately, 2 early IZ units sat on the market for more than a year, and the developer has sued the city to get out of the IZ requirement. This doesn’t reflect a fundamental flaw in IZ; rather, it arises from understaffing at the DC government and rigid local and federal regulations. There’s not much time to fix the sputtering implementation of this important affordable housing policy tool.

IZ brings many benefits

IZ sets aside 8-10% of new housing construction for households earning 50-80% of Area Median Income (a 50% AMI household of 3 earns $49,250 per year, a 80% AMI household earns $78,221 per year). IZ is worth fixing because we have plenty of evidence that this kind of program can produce results beyond what other housing programs can. IZ provides affordable housing in mixed-income and wealthier neighborhoods throughout a jurisdiction rather than concentrating it in a few neighborhoods.

This benefit of economic integration has been documented. Low-income children in programs like IZ perform better in school than their peers, because they live in low-poverty neighborhoods and attend local low-poverty schools. Another other advantage of IZ is that it does not require a direct subsidy from the government to construct the affordable unit, but rather lets the developer to build extra market-rate units, and uses that value to pay for the below-market ones.

Other than a nominal administrative cost, IZ is a very cost-effective way to sustain the city’s production of new moderately-priced homes. There are many successful similar programs throughout the country, including Montgomery County’s long-running IZ program, Moderately-Priced Dwelling Units (MPDUs).

DC IZ also has a sister program which creates affordable dwelling units through PUDs and public land deals. (Confusingly, these are often called ADUs, which is the same acronym, but not the same thing, as Accessory Dwelling Units, market-rate basement or garage units inside someone’s house). This program does not appear to have problems filling units at the same income levels. That success shows that IZ can also overcome its challenges with some concerted attention.

Three problems have stalled IZ

Three debilitating problems with the program’s administration can be fairly easily corrected and get it back on track: severe understaffing, rigid regulations, and rigid FHA lending rules.

Severe understaffing: Only 1-2 people administer the program inside DC’s Department of Housing and Community Development (DHCD). Without a few more staff people, IZ and the sister affordable dwelling units (ADUs) cannot be administered effectively. The Mayor and DC Council need to provide a few more staff positions to manage these programs.

An alternative to administering the program entirely inside the DC government would be to give responsibility for the for-sale units to a nonprofit experienced in managing permanently affordable homeownership programs. CityFirst Homes is already doing a similar job with the District’s first major housing land trust. Evidence suggests that more hands-on assistance from a non-profit like CityFirst Homes can drastically cut foreclosure rates and yield more successful homeowners.

The other component that requires sustained support is the housing counseling agencies who educate applicants and help them through the process. Ensuring the city’s budget provides for this is another key ingredient to success. In all, these administrative costs amount to a modest budget item and are a fraction of what it costs to subsidize new affordable housing construction.

Rigid IZ regulations: DHCD manages a process for connecting a person who qualifies for affordable housing to available units. This involves a centralized application and lotteries. Details of that process have proven too rigid to accommodate the realities of matching housing seekers and available units.

The city is in the process of revising the regulations to give the program necessary flexibility. This revision should be in effect in a few months.

An alternative to the current lottery system would be to let the developers market the units to qualified households, and simply have the District housing agency certify the applicants as qualified and provide general oversight. This is already the process for the PUD and public land “ADUs.”

With sufficient support from housing counseling agencies, residents in search of an affordable home should be able to get enough help to conduct that search, especially with the city’s useful website, dchousingsearch.org.

Rigid FHA lending rules: The Federal Housing Administration has emerged as the predominant mortgage backer in the post-2008 affordable homeownership world. Nationwide, most local housing programs have encountered a critical conflict with FHA rules where local programs (like IZ and ADUs) often require that the affordability provisions survive foreclosure. FHA does not allow for this.

The only way to deal with FHA mortgage lending standards that conflict with local program requirements is to change the program to conform to FHA’s standards, and get FHA to sign off on the changes. DC is acting to change its standards to comply with FHA. The timeline for receiving FHA’s approval is uncertain but the city hopes it will happen shortly, we hope in the next month or so.

If a unit goes into foreclosure and then sells on the market, the city would lose its investment in an affordable home. There are other safeguards the city could put in place that do not conflict with FHA. They would at least allow the city to recover the value of the affordability of the unit, should a foreclosure occur and the unit sell on the market.

With these three administrative fixes in place, DC should be ready to smoothly operate a program to place the right applicant in the right unit as 900 more IZ units come online.

Mend it, don’t end it

IZ’s growing pains have led to some calls to more fundamentally modify or scrap the IZ program. We should consider and debate these suggestions only once DC fixes the immediate problems and the program administration is running smoothly.

Some opponents continue to question the policy itself, but experience across the country points to IZ as a valuable and effective tool to create moderately-priced housing in strong markets with virtually no direct cost other than a small budget for staffing the program.

Photo courtesy of 2910 Georgia Ave.

Read the original article on Greater Greater Washington. >>

Strategies Detailed to Remedy DC’s Affordable-Housing Crisis

Posted on by Joe Wisniewski

Lack of affordable housing is an unintended consequence of a region’s success, and can certainly be seen in the Washington D.C. metro area.

As the public demand for walkable neighborhoods has increased, low- to moderate-income residents are being priced out of those neighborhoods. And unfortunately, the public policy regarding housing affordability in the United States remains “drive until you qualify.”

Thus began Chris Leinberger of the Brookings Institution at a recent seminar entitled “Walkable Neighborhoods: How to Make Them for Everyone,” sponsored by the Coalition for Smarter Growth.

The seminar also featured Ed Lazere of the DC Fiscal Policy Institute and David Bowers of Enterprise Community Partners, who brought their own unique spins on the affordable-housing problem in D.C.

Lazere illuminated some startling statistics regarding housing affordability (D.C. lost half of its low-cost apartment rental units from 2000 to 2010). Bowers added the human element with stories of how housing affordability has affected some actual D.C. residents (illustrating his concept that “data without stories are just numbers”).

Leinberger pointed out that Hollywood does more market research than any other U.S. industry, crediting the popularity of television shows such as Seinfeld and Sex and the City supplanting that of, say, Leave it to Beaver, as reflecting the national consumer demand for walkable neighborhoods away from suburban forms of development which remained in demand until the mid-1990s.

The result of this increased demand has naturally been an increase in land values in walkable communities, specifically in D.C.’s 139 designated activity centers. This, coupled with the lesser issue of increased construction costs associated with the development of walkable neighborhoods, according to Leinberger, has led to gentrification.

Bowers pointed to D.C.’s U Street and H Street corridors as the city’s two most recent neighborhoods to undergo gentrification which, Leinberger stated, was either good or bad, depending on where you sit.

The side effect of gentrification, of course, is pricing out D.C.’s low- and moderate-income residents from these neighborhoods, often displacing long-time residents in the process. And where are they to go? Bowers pointed out that 20 percent of D.C. residents spend half of every take-home dollar on housing already. “They are drowning,” Bowers said.

The main solution to housing affordability in walkable urban places, Leinberger stated, is simply to create more walkable urban places. This is a recognition that housing affordability in in-demand neighborhoods is, by definition, a supply/demand problem.

Leinberger enumerated additional remedies, of which the following is a subset:

  1. Offering standard tax credit and vouchers from the local government in lieu of increased tax revenues from other parts of the walkable urban district;
  2. Participating in federal government programs associated with the U.S. Department of Housing and Urban Development’s Choice Neighborhoods, the next generation of the department’s Hope VI programs;
  3. Instituting inclusionary zoning to require affordable units within a district with higher walkable urban infrastructure investment;
  4. Implementing fee capture upon resale of any market-rate unit within a district with such infrastructure investments;
  5. Allowing ancillary units in for-sale housing (i.e., “granny flats”) to expand the housing supply; and
  6. Encouraging employers to locate in transit-oriented developments in order to increase tax revenues in those districts.

These remedies are not just theoretical, but have been implemented in jurisdictions nationwide. Likewise, they are made possible based on increased profitability that does indeed occur in walkable neighborhoods.

Chris Leinberger dropped a staggering statistic regarding how much D.C. land values have increased in the past decade. On one particular site in Capitol Riverfront, he noted that the land value was probably at around $5 per square foot a decade ago. That same land was recently sold to Toll Brothers at a cost of $825 per square foot. “That increase is stunning,” he added.

In addition, in Arlington County, Virginia, the eight significant walkable neighborhoods occupying 10 percent of the county’s land today generates 55 percent of the county’s revenue, up from 20 percent just a few short decades ago. The county now captures part of this value growth by requiring that developers apportion a percentage of their residential units as affordable housing, or make a contribution to the county’s affordable housing fund.

While there is no one silver-bullet remedy, jurisdictions can, with perseverance, creativity, and hopefully a sense of urgency, address the “unintended consequence of success” that housing affordability poses as they create the walkable communities preferred by consumers of all socioeconomic backgrounds.

Click here to read the original article from Mobility Lab. 

Photo courtesy of  Paul Goddin.

 

Testimony before the D.C. Zoning Commission: Support Case No. 04-33F Text Amendments: PUDs and Inclusionary Zoning – Termination of Affordability Controls upon Foreclosure

Posted on by Ted Van Houten

Please accept our testimony on behalf of the Coalition for Smarter Growth. My organization works to ensure that transportation and development decisions in the Washington D.C. region accommodate growth while revitalizing communities, providing more housing and travel choices, and conserving our natural and historic areas. I also note that we have been working to create and implement a successful Inclusionary Zoning program since its inception in 2003.

We are here to express our strong support for these amendments. We concur that the proposed text amendments are needed to ensure that IZ and ADU covenants conform to FHA guidelines. We appreciate that the city can take other steps through regulations to protect the public’s interest in its investment in below market rate homes without conflicting with FHA requirements. We look forward to the District developing these regulations to complement this action.

These amendments are critical to removing a major barrier affecting the IZ program. Administration of IZ has experienced a number of substantial challenges as units have come on line in the last year. While these challenges remain a major disappointment, they can be overcome. The first challenge is the severe understaffing of both the IZ program and the management of ADUs – affordable dwelling units generated through PUDs and public land dispositions. It appears that no more than one or at most two DHCD staff members manage every aspect of the ADU and IZ programs. Elected officials have touted the benefits of these affordable housing units, but they have not provided the modest funding needed to adequately support these assets. A few more staff members and continued support for adequate housing counseling services are needed to ensure that these programs have the resources they need to work with applicants and developers.

While ADUs are largely managed by individual developments with oversight from DHCD, IZ was designed to more closely manage the recruitment of applicants and the placement process. The intention was to provide greater assistance to residents in search of a home they could afford and allow them to come to one place to find assistance, rather than chase project after project. ADUs have not experienced the problems in leasing or sales of units at 80 percent AMI that IZ has. Considering these differences, and other factors, DHCD is in the midst of revising the IZ regulations. We hope this process will take no more than a couple of months. Apparently, the regulations were too rigid to respond to obvious needs in practice, such as ensuring that an applicant who enters a lottery for a for-sale unit is qualified to get a mortgage for that unit. There appear to be a variety of glitches in the IZ regulations that are inhibiting the smooth process of connecting the right applicant with the right unit. We are hopeful that this regulations revision will resolve these problems within the next several months.

You are here today to resolve one of the other barriers that we have recently encountered – the rise of FHA as the leading backer of affordable residential mortgages, and FHA standards that conflict with affordable housing covenants common among local government programs. These amendments will allow prospective buyers to secure FHA financing and purchase affordable units subject to the Inclusionary Zoning program and ADU requirements. We welcome these appropriate and necessary text amendments to the current PUD and Inclusionary Zoning regulations to improve the effectiveness of these programs and increase the availability of affordable housing in the District of Columbia.

Thank you for the opportunity to testify.

Cheryl Cort

Policy Director

Walkable Neighborhoods: How to Make Them for Everyone

Walkable Neighborhoods: How to Make Them for Everyone

Posted on by acustis


Tuesday, January 22, 2013
Refreshments 6:00 pm
Program 6:30-8:30 pm

National Capital Planning Commission
401 9th Street NW, North Lobby, Suite 500
(Metro: Archives)

Walkable urban places are in high demand. A decade ago, Columbia Heights, H Street NE, and Petworth weren’t considered particularly desirable places to live. Today, these neighborhoods are booming, and so are many more city blocks close to transit and downtown. In addition to the more established affluent neighborhoods, demand to live in newly-popular neighborhoods that offer walkable, bicycle-friendly, and transit-oriented lifestyles is driving up housing prices. Given the turnaround in 2000 of D.C.’s decades-long population decline, the city’s growth could be used to ensure that everyone – especially disadvantaged D.C. residents – shares in the benefits of a stronger city and stable tax base. But rising housing prices loom as an increasing problem for moderate- and low-income who want to stay in the city and take part in the District’s resurgence.

 

How can we continue to offer more opportunities to live in walkable, transit-oriented neighborhoods and share the benefits with people across the income spectrum? Join us to discuss this challenge with Chris Leinberger, David Bowers, and Ed Lazere.

  • Chris Leinberger is a land use strategist, developer, researcher and author of Walk this Way: The Economic Promise of Walkable Places in Metropolitan Washington, D.C.. Chris will discuss the benefits of rising values from walkable urban places and the need complement these opportunities with affordable housing strategies.
  • David Bowers of Enterprise Community Partners will discuss how a stronger affordable housing strategy can be a part of the city’s agenda, especially as demand to live near transit continues to rise.
  • Ed Lazere of the D.C. Fiscal Policy Institute will explain how the city’s growing financial strength can help ensure that new prosperity is shared with everyone through the budget decision-making process.

This event is part of CSG’s 2013 Walking Tours & Forums Series, possible by the generous support of the National Association of Realtors. In cooperation with APA Virginia, AICP credit for this event is pending.