Enhanced Weatherization Program
The District of Columbia Housing Finance Agency’s (DCHFA) Executive Director Todd A. Lee recently named Christopher E. Donald, Director of Multifamily Lending and Neighborhood Investments (formerly the Public Finance department). Donald will oversee the day-to-day operations of the department, which financed 14 developments in Fiscal Year 2016, and will result in the production or preservation of 2,090 affordable units for D.C. residents. “Christopher’s background in real estate finance and zeal for community building is the precise combination of skills and approach necessary to lead DCHFA’s multifamily division,” remarked Executive Director Lee on Donald’s hiring. To read the complete press release, click here.
HAND Member AHC is hosting a job fair in Arlington for property management positions on October 19, 2016 from 9:00 AM-12:00 PM! For more information, email ahcmjobs@ahcmgmt.com by October 14th. You can also view open positions here.
On October 13, 2016 at 10:00 a.m., the District of Columbia’s Department of Energy and Environment (DOEE), the Prince George’s County Department of the Environment, and the Montgomery County Department of Environmental Protection will hold a press conference and ceremonial signing of the Anacostia River Accord. D.C. Mayor Muriel Bowser, Prince George’s County Executive Rushern Baker, and Montgomery County Executive Isiah Leggett will attend the signing of the Accord, which signifies a renewed multi-jurisdictional commitment to work collaboratively toward removing trash from the Anacostia River and its watershed. After the press conference and signing ceremony, Anacostia Riverkeeper and Anacostia Watershed Society will provide educational boat tours of the Anacostia River as part of DOEE’s Anacostia River Explorers program. Press interested in attending must RSVP to Julia.christian@dc.gov. Additional details can be found below and in the press release.
WHO: District of Columbia Mayor Muriel Bowser
Prince George’s County Executive Rushern Baker
Montgomery County Executive Isiah Leggett
WHAT: Press conference and signing of Anacostia Accord
WHEN: Thursday, October 13, 2016 at 10:00 a.m.
WHERE: DOEE’s Aquatic Resources Education Center, Anacostia Park
By Lisa Sturtevant, PhD
You can’t hide from media reporting on Millennials and home ownership. But the message tends to be oversimplified and often contradictory. Millennials are getting set to jump into home ownership. Millennials are walking away from home ownership. Some reports say student debt is the reason Millennials can’t buy a home. Others say it’s not.
The attention to Millennials housing choices is justifiable. The generation of Millennials—those roughly age 18 to 34—have surpassed the Baby Boomers as the nation’s largest generation and are in prime household formation. Furthermore, surveys of Millennials uniformly find that the vast majority of this population wants to be home owners. For these reasons, Millennials will potentially have an enormous impact on the nation’s housing market.
As we know, however, housing markets are local. The Millennial population in the Washington DC region tends to be more highly educated and have higher incomes than Millennials in other parts of the country. But home prices are also substantially higher in the region than they are in other places. So what are the prospects for home ownership among 20- and 30-somethings in the DC region and how will their choices and the constraints they face impact their ability to accumulate wealth through home ownership?
There are about 1.5 million people between the ages of 18 and 34 in the Washington DC metropolitan area. The shares of Millennials tend to be higher in closer-in jurisdictions like the District of Columbia (35%) and Arlington County (34%), but Millennials make up substantial shares of the population in the region’s suburbs, for example in Loudoun County (20%) and Montgomery County (21%). The housing choices this group is making now and will make in the future depends on their economic situations and choices about marriage and family, as on the available housing opportunities in the region. These factors combined will determine the extent to which young adult households in the Washington DC region will be longer-term renters than past generations—or will move out of the region where they find more affordable home ownership opportunities.
There are two key decisions individuals make that are relevant to understanding home ownership potential among Millennials—whether or not to form an independent household (measured by headship rates) and whether to rent or buy (tenure choice).
Headship
Headship
Headship rates are defined as the percentage of people that are heads of households. The main way young people become the head of a household is when they move out of their parents’ home. Households are also formed—and therefore headship rates are higher—when roommates that are living together decide to live on their own. Headship rates decline when individuals living alone get married or move in together.
Headship rates for the 25-to-34 year old population were lower in 2014 than in 2005 or 2000. (The focus in this section is on the older Millennial population who are most likely to be looking at home ownership.) Therefore, young adults in the Washington DC region are not forming independent households at the same rate as they did at the height of the housing market or even back during a more “normal” housing market. The biggest decline in headship rates were in Prince William and Prince George’s counties. These are the jurisdictions that were hardest hit by the foreclosure crisis and also tend to have lower household incomes that in other jurisdictions in the region.
Tenure
Home ownership rates have fallen pretty substantially since the height of housing market and the declines have been biggest among young adult households. Perhaps, surprisingly, though, home ownership rates have rebounded more quickly in the District and Arlington—places with some of the highest housing costs—than in many other places in the region. For example, the home ownership rate among 25-to-34 year olds in the District was 18.9 percent, lower than the 2005 rate of 27.2 percent but not too much lower than the rate among this age group in 2000. In Arlington County, the home ownership rate was over 30 percent for 25-to-34 year olds in 2005. The 2014 rate of 21.1 percent, however, is in line with the rate in 2000. The biggest drops in home ownership have been in Montgomery and Loudoun counties. One conclusion from these trends may be that home ownership opportunities have rebounded for the highest income Millennials who are able to buy in the District and close-in locations but remain limited for young adults with more modest incomes.
Home Prices
Most young adult households do not earn above the area median income and the vast majority of homes on the market are unaffordable to them. In 2015, the median income for a household headed by someone age 25 to 44 was $92,326. (Data were not available specifically for the 25-to-34 year old population; however, the median household income for this younger cohort will be lower.) Under standard assumptions, a household with an income of about $92,000 could afford to purchase a home priced at about $370,000 (four times income). However, options are few in many parts of the region. In the District, the average sales price of a condo in August 2016 was nearly $520,000 and the average townhouse price in the city was over $740,000! In the broad Suburban Maryland and Northern Virginia regions—which includes Frederick, Charles and Calvert counties in Maryland and areas south to the Fredericksburg area and west to Fauquier and Clarke counties in Virginia—prices were lower. The average condo in Northern Virginia was about $300,000 and it was about $230,000 in Suburban Maryland. The average townhouse sold for $406,000 in Northern Virginia and $293,000 in Suburban Maryland. But prices were much higher closer in and in areas well connected to jobs, transit, and amenities. For example, in the City of Alexandria, the average two-bedroom townhouse sold for $590,000 in August 2016. In Arlington, the average condo sold for $430,000.
Implications for Millennials—and the Region
There are no easy solutions to increasing home ownership opportunities for Millennials in our region since this particular housing issue is so closely tied to challenges related to student debt, access to credit and wage and employment growth. However, it is important to continue to support the construction of new housing that is affordable to more moderate-income homebuyers, which could mean changing zoning to allow smaller housing units or residential buildings that fill the “missing middle.” In addition, local governments, businesses and advocacy groups can work together to help identify resources for downpayment or other home purchase assistance for first-time homebuyers.
By Lisa Sturtevant, PhD
There is abundant research showing that stable and affordable housing is associated with improved educational outcomes among children in low-income families. Access to affordable housing can result in fewer moves and can reduce overcrowding and other housing-related stresses. Housing assistance can help families move to neighborhoods with higher quality schools and housing investments can be part of broader, holistic community development efforts that lead to better outcomes for children.
Housing is important to educational outcomes because the school that a child attends is usually determined by where she lives. (Charter schools and school choice in some communities can weaken this link between residence location and school location.) Higher-quality schools—whether measured by test scores, teacher tenure and quality, or availability of resources—tend be located in communities where housing costs and incomes are higher. As a result, when families are segregated by income, it also means their children are segregated by school quality.
Unfortunately, income segregation is on the rise for families with children. According to a recent study by researchers at the University of Southern California, between 1990 and 2010, families with children became more likely to live in neighborhoods segregated by income. Over the same period, there was no change in income segregation among families without children. This means that all of the recent increase in income segregation in the U.S. has been among families with children. We know that place matters not just for education outcomes but also for economic mobility opportunities for children, so this recent trend in income segregation among families is particularly concerning.
It is not uncommon to hear that “housing policy is school policy.” Housing programs can help lower-income families access neighborhoods with better schools, and can help alleviate the concentration of poverty in neighborhood schools. But what housing policies have worked the best to help families access good neighborhoods and good schools?
Inclusionary zoning policies can be a key way to support positive educational outcomes. There are more than 500 local inclusionary zoning (IZ) programs across the country, and many of the jurisdictions in the Washington DC region have IZ or IZ-like affordable housing programs. Research has found that affordable units produced through an IZ program are more likely to be located in low-poverty school districts than housing opportunities created through either the Housing Choice Voucher or Low-Income Housing Tax Credit programs. IZ is not a silver bullet for connecting children to high-quality schools, however, and program design matters. A RAND study has shown that Montgomery County’s MPDU program has been singularly effective at locating housing in low-poverty neighborhoods, which has led to better academic outcomes for children in those homes.
Voucher mobility programs can be effective at connecting families to neighborhoods with high-quality schools, but intensive search assistance and other supports seem necessary. Research on the federal Housing Choice Voucher (HCV) program has generally found that while the program helps families find housing they can afford, families receiving a voucher tend to live in neighborhoods with low-performing schools. Housing search assistance and pre- and post-move counseling can make a voucher program much more successful at getting families into housing in neighborhoods with good schools and ultimately lead to better educational outcomes for children. Furthermore, the most effective housing mobility programs operate at a regional scale, streamlining the porting and the administration process across jurisdictions.
The housing tax credit allocation process is another important mechanisms for expanding housing options in neighborhoods with high-quality schools. Tax credits are allocated to the states from the Federal government and a state entity (e.g. a state housing finance agency) awards credits on a competitive basis to projects that meet criteria and recommendations set out in the state’s Qualified Allocation Plan (QAP). (Nine-percent credits are awarded competitively.) The QAP and the allocation process can have a big impact on the number and types of affordable projects that get built in neighborhoods with good schools. According to a recent report by Enterprise Community Partners, states can prioritize access to good schools in their allocation processes. Maryland, for example, has the option to increase the eligible basis of projects if they offer “reasonable access to jobs, quality schools and other economic and social benefits.” But the link between housing and good schools is not often an explicit part of a state’s QAP.
These policies can help families access housing they can afford in neighborhoods that have good schools. But it will never be possible to move everyone. Just like other approaches to connecting families to opportunity, developing joint housing-school policies should be a “both/and” proposition—both investing in housing in high-opportunity neighborhoods with good schools and investing in existing communities to improve neighborhoods and schools. And no matter the policy approach, it is an important first step to ensure that people who care about schools and people who care about housing—who all care about the quality of life of families and children—are talking and working together. Housing Virginia recently convened a group to explore and improve the connections between affordable housing and schools. As we head back to school, thinking about how to do more of that collaboration is essential for ensuring all students have a successful school year!
By Lisa Sturtevant, PhD
Demand for rental housing has increased dramatically in recent years, and despite a surge in new multi-family construction, many individuals and families still face daunting affordability challenges.
In many parts of the Washington DC region, new construction has ramped up to meet the growing demand for rental housing. However, these new apartments largely target the upper end of the market. Unfortunately with this new market-rate construction, existing affordable housing is often demolished. While it is critical to continue to promote policies that encourage the production of new affordable rental housing it is preservation that is perhaps more important.
Across the country and throughout our region, the most important source of rental housing that is affordable to lower-income households is found within the existing housing stock. Subsidized affordable rental housing continues to be at risk of becoming unaffordable due to expiring affordability contracts. Unsubsidized, or market affordable units, which comprise the largest share of affordable rental homes, are lost as a result of demolition as well as improvements and upgrades that lead to rent increases. As the demand for homeownership swings upward again, condo conversions will also put pressure on the existing stock of affordable rental homes.
Preservation is a challenge, particularly in high-cost regions like the Washington area. The challenge is even greater in areas that are best connected to opportunity—those near transit and jobs—and neighborhoods that are improving as a result of gentrification. There is a strong case that these are the places where housing affordable to lower-income individuals and families is most needed, but it’s also where preservation can be most expensive.
But preserving existing affordable housing is often much more economically sound than new construction. According to one study of preservation efforts in 37 states, the cost to rehab a unit was half the cost of building a comparable new unit.
Preservation policies can target resources on specific units or buildings, or can more generally focus on preserving residents’ access to affordable homes in a particular jurisdiction or neighborhood. In either case, key components of successful preservation strategies include:
i) being able to identify developments or neighborhoods that may be at risk of loss through gentrification or other factors; and
ii) ensuring sufficient resources to leverage preservation opportunities when they become available.
Because preservation is so challenging in high-cost areas, a set of strategies is called for. Many of the more inventive and effective preservation policies have been adopted by local jurisdictions in the Washington DC region…but there may be opportunities to expand the reach of existing preservation tools.
Inventories of At-Risk Properties. The effectiveness of any preservation program depends on the timely identification of at-risk properties. A comprehensive data collection effort can help local jurisdictions identify which affordable rental properties appear to be at risk of loss (including the reason behind it) and target outreach and preservation efforts accordingly.
The recently created National Housing Preservation Database tracks at-risk, subsidized properties throughout the country. The District of Columbia’s Preservation Catalog provides a local example of a database that includes information on subsidized properties in DC which may be at risk of being lost from the affordable stock. It is important to keep track of subsidized units with expiring contracts, however, it is equally—or perhaps even more important—to be able to identify and track market-rate affordable units. With support from the Metropolitan Washington Council of Governments, developing a regional database of market-rate affordable rental properties would be a worthwhile endeavor.
Notably, inventories developed for tracking are only useful for preservation when a jurisdiction has an acquisition strategy. To be effective, the strategy would have to include a funding source and a process for working with developers when market-rate affordable properties become available for sale.
Property Tax Abatements and Exemptions. Some local jurisdictions have attempted to help preserve affordable rental housing by offering property owners tax incentives in exchange for preserving units as affordable—Chicago and New York City offer two examples of fairly comprehensive property tax abatement/exemption programs. Here in the Washington DC region, Fairfax County has a property tax exemption option for non-profit property owners that serve extremely low income households. In many cases these tax incentives are designed to make it financially feasible for owners of low-cost rentals to make improvements to their properties without raising rents to levels unaffordable to low-income residents.
Preservation tax incentives tend to be most effective in neighborhoods where rents are not yet rising significantly – this highlights the importance of tracking at-risk units and developing ways to predict neighborhood change.
Right of First Refusal. Right of First Refusal (RoFR) policies can require owners of rental properties to give advance notice of the intention to either sell the property, make substantial property improvements, or convert to condominium ownership, and then requires that a preservation buyer has an opportunity to match a purchase offer. In some cases, the tenants or the local jurisdiction indicate the intent to make an offer, though the purchase is usually made by a non-profit developer.
For a RoFR policy to work well, there must be a capable buyer that has experience purchasing and operating rental housing. In addition, the buyer needs quick access to capital to close the transaction. Local funding sources that can respond quickly and flexibly to requests from nonprofits and tenant groups seeking to purchase and rehabilitate at-risk housing can therefore enhance the effectiveness of RoFR policies.
Several jurisdictions across the region, including the District of Columbia and Montgomery County, have RoFR policies though their reach has been limited by very high property prices and insufficient resources.
In many ways, preservation policies are harder to create than policies designed to promote new affordable development. However, as rents continue to rise, it is critical to stem the loss of existing affordable homes. If not addressed, low- and moderate-income individuals and families in our region will face dramatically declining housing options.
The State of Maryland Department of Housing and Community Development (DHCD) is seeking proposals from qualified applicants to receive an allocation of Project-Based HUD- Veterans Affairs Supportive Housing Vouchers (VASH). All proposals will be evaluated on scoring criteria developed by DHCD. DHCD will select one proposal to submit to the United States Department of Housing and Urban Development (HUD) for consideration as part of a national competition.
DHCD must submit its proposal to HUD by September 9, 2016. HUD issued Notice PIH-2016-11 on July 1,2016, which provides additional detail regarding this national competition.
The Application may be found at the following link: http://dhcd.maryland.gov/HousingDevelopment/Documents/rhf/VASH%20RFP.pdf
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Payments: Orders placed on the event registration page are not confirmed until payment is received. A confirmation email will be sent to the email address listed in your registration. If you paid by credit card, a receipt will be sent to the email address listed in your registration. If you mail a check, all payments must be received within seven days of completing your registration form. Checks should be remitted to: HAND, PO Box 48386, Washington, DC 20002
Guest List & Dietary Preference: If your registration includes a luncheon table or multiple guests, please submit guest names and menu choices by May 1, 2020. Submit guest names here.
Housing Expo: Plan to exhibit? Download the Housing Expo FAQs here.
Omni Shoreham Hotel Room Block: For attendees looking to secure overnight accommodations on May 25th, HAND has secured a rate starting at $189 for conference attendees. There are a limited amount of rooms available, so visit this link today to reserve your room. May 10th is the last day to secure a room at the discounted rate.
Ad Submission: The artwork for advertisements should be submitted to annualmeeting@handhousing.org. You can download the ad spec sheet here. Deadline for ad submission is April 13, 2020.
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Door Prizes: Are you interested in donating a door prize to this year’s Annual Meeting? Email annualmeeting@handhousing.org to coordinate with our team.
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