2015 Washington Business Journal Minority Business Leaders Announced
- Rosie Allen-Herring, United Way of the National Capital Area
- Buwa Binitie, Dantes Partners
- Terri Copeland, PNC Bank
By Dr. Lisa A. Sturtevant
Vice President of Research
National Housing Conference
As we begin 2015, what are some of important indicators of the health of the local housing market and the need for affordable housing? Several key economic and demographic trends suggest slower growth in housing sales and price growth, continued rising demand for rental housing, and rising affordability challenges for many.
After fast growth in 2010 and 2011, the pace of job growth in the Washington DC region has slowed considerably (see figure 1) in recent months.
Figure 1:
Over the past 18 months, annual average job growth in the region has totaled about 17,000 jobs; in 2011 and 2012, the region added over 41,000 jobs on an annual basis. The slowdown in job growth has been driven by losses in the Federal government (see figure 2) and professional and business services (see figure 3) sector, the region’s two largest and among the highest-wage sectors.
Job growth has been stronger in lower-wage sectors, (see figure 4) including the leisure and hospitality and construction sectors. The region’s employment growth will be tied increasingly to growth in sectors that have traditionally included lower-wage workers.
In November 2014, the average sale price in the Washington DC region was up just 1.4 percent (see figure 5) compared to November 2013. Prices were flat in the District of Columbia, down three percent in Suburban Maryland and up four percent in Northern Virginia.
This slowdown in price growth follows double digit price appreciation in many parts of the region in late 2012 and early 2013. At the same time price growth has moderated, sales activity has slowed and inventories are rising. These trends point to a cooling for-sale market in 2015.
Between 2000 and 2013, median rents in the Washington DC region have nearly doubled (see figure 6), and in 2013 the median monthly rent for the region was $1,481. Median rents remain much higher in close-in suburban jurisdictions, particularly Arlington County ($1,820 per month), Fairfax County ($1,764 per month), and the city of Alexandria ($1,592).
Rental vacancy rates edged up very slightly in 2013 although the regional rental vacancy rate remains below historical averages (see figure 7) . Steadily rising rents and low vacancy rates reflect the strong demand for rental housing in the region, which will continue into 2015.
While the median household income in the Washington DC region is high relative to most places across the country, there are thousands of individuals and families with modest incomes and stagnant wages.
Low- and moderate-income households often struggle to find affordable housing in the region. Twenty percent of working households (see figure 8) —or nearly 190,000 households that earn up to 120 percent of the area median income—spend more than half of their income each month on housing.
In DC and Montgomery County (see figure 9) , more than a quarter of all renters—including many higher-income renters—are severely cost burdened.
And in our region, the typical elementary school teacher, police officer, or nurse (LPN) cannot afford to buy the typical home (see figure 10).
Many others cannot afford the typical rent for a one-bedroom apartment (see figure 11) . When households spend a disproportionate share of their income on housing, it leaves less for other necessities, such as food, child care, transportation and health care. It also leaves less for non-discretionary spending—the type of spending that can contribute to local economies.
Wages have continued to grow very slowly during the recovery which means that affordability could be a growing challenge in the region in 2015.
As a result of the changing structure of the Washington DC area economy, along with the aging of the Baby Boom population (see figure 12), the increasing racial and ethnic diversity—particularly in our suburbs (see figure 13), and the projected household growth among Millennials, there will be a growing need throughout the region for smaller homes, more multi-family housing, and more rental housing options.
Different parts of the population will be competing for the same types of more affordable housing in accessible locations, which will continue to drive up costs if supply does not keep up with demand.
Affordable housing needs will vary around the region and even with jurisdictions. And while it is important that local counties and cities develop housing strategies that are responsive to their local needs, it is just as important that jurisdictions throughout the region work together to ensure there is a sufficient supply of housing to meet the needs of a changing population.
The Washington DC region’s economy and housing markets will continue to be in a period of transition. Despite slower job growth and declining prices, housing affordability will remain a key challenge, largely as a result of slow-growing wages and economic restructuring. Access to homeownership will theoretically be opened up as a result of a change to FHFA’s downpayment policy which allow for mortgages with as little as a three percent downpayment.
However, potential homebuyers still face steep prices in many parts of the region. For example, less than 16 percent of percent of homes sold in November 2014 (including single-family, townhouses and condominiums) were priced below $200,000 which is a price that could be affordable to a household earning about $50,000. On the rental side, supply to the higher end of the market has been robust in many neighborhoods, but there remains a significant shortage of housing that is affordable to households with low incomes. It will be important to continue to seek ways to expand supply to meeting needs for more affordable housing.
Want to know what HAND members have to say about this post? Watch!
Next Month: New Construction: Where, What Types and For Whom?
When Transitional Housing Corporation (THC) broke ground on its newest property last October, the Harry and Jeannette Weinberg Commons, the District moved a little closer to creating more environmentally sustainable homes for families in need. The first multi-family Passive House in the area, Weinberg Commons will provide 12 apartments for families in need of permanent supportive housing and 24 apartments for families making between 30 – 60% of AMI all the while helping to minimize the energy footprint of the City.
Passive House design reduces the amount of energy usage in a building, keeping utility costs low and rents affordable. Instead of relying on active energy reduction systems with high-installation costs, Passive House buildings concentrate on energy use reduction and work with natural systems to manage heat gain and loss, resulting in possible utility costs savings of up to 90 percent. Located at 5010 Southern Avenue in southeast, the project will provide a deep energy retrofit on the property and will include super-insulation, an air-tight building shell and balanced energy recovery ventilation. In addition to being an innovative approach to net-zero building, Passive House structures are also considered to adhere to the most stringent energy standards in the world.
THC is not new to meeting the needs of the most vulnerable in different and innovative ways. The organization provides housing and support services to more than 500 formerly homeless and low-income families so they can make their own transformational life changes. THC offers holistic support through employment services, housing counseling, and resident and clinical services. Located in six of the eight wards in D.C., THC properties include award-winning transitional, permanent, supportive, rapid rehousing and affordable rental housing for those looking to end the cycle of homelessness.
Weinberg Commons is yet another example of THC’s transformative methods in providing affordable housing to those who need it most. The community reflects former DC Mayor Vincent Gray’s twin vision of creating more environmentally sustainable buildings while delivering affordable housing more quickly. The project also complements the strategy to consolidate and synchronize the application process between city agencies and developers in order to produce affordable housing in less time. Weinberg Commons will combine state-of-the-art environmental features with affordable rents and a slate of support services for homeless families. This innovative endeavor will be the first of its kind in the District, and it will also model the successful integration of sustainability in affordable housing projects moving forward.
“We are addressing the District’s family homelessness crisis as we contribute to a greener city,” said Frank Demarais, THC’s Interim Executive Director in regards to THC’s commitment to Passive House development.
THC’s HAND membership has proven to be a valuable resource for the organization. As a multi-state/regional affordable housing and community development association, HAND provides a collective voice for affordable housing in the region. By bringing together lead agencies in the area and individuals in housing development, policy and financing, HAND provides THC leadership and staff access to the best thinking available in the industry. Through its trainings and dedication to supporting community housing providers, HAND is a go-to resource to help THC achieve its mission of ending family homelessness by 2020.
HAND is pleased to spotlight Transitional Housing Corporation, which certainly contributes to our organization’s COLLABORATION, INNOVATION and TRANSFORMATION within the metropolitan area!
On December 31, 2014, our dear colleague David Reznick, co-founder and Chairman of the Board of Reznick Group, P.C passed away surrounded by his loving family. The affordable housing industry has lost a trailblazer and visionary in the field and our thoughts are with his family during this difficult time.
Memorial contributions may be made to Yachad or David Reznick Memorial Foundation for Housing and Community Services, Inc., 1400 16th Street, NW, Suite 420, Washington, DC 20036.
HAND was afforded the opportunity in 2013 to present David with our Lifetime Achievement Award honoring his career, leading industry-changing financing strategies that have helped create thriving communities and homes for families with low-incomes nationwide. In addition to his award, HAND surprised David with a tribute video featuring his colleagues, families and friends sharing heartfelt accolades about his impact on the industry. He will be sorely missed.
Exelon Corporation is in the process of acquiring Pepco Holdings, Inc., including Pepco’s Maryland operating companies: Potomac Electric Power Company (Pepco), and Delmarva Power & Light Company (Delmarva Power). Why does the merger of Exelon and Pepco Holdings matter for affordable housing? Tens of millions of dollars are at stake! To show that the merger is in the public interest, Exelon is proposing to create a Customer Investment Fund (CIF) and how these funds are to be used will be up to the MD PSC. HAND has joined the National Housing Trust in an effort to ensure the proposed merger is in the public interest.
Hearings will be held starting today through January 14th in different parts of Maryland. The hearings will provide an opportunity for the MD PSC commissioners to learn about why improving the energy efficiency of multifamily affordable housing is in the public interest. For questions on this effort, please contact Todd Nedwick at tnedwick@nhtinc.org or 202-333-8931 x 128.
For assistance drafting talking points, please use these templates:
If you plan to testify at a hearing, please sign up using the Google Document here.
HEARING SCHEDULE:
1. Tuesday, January 6, 2015 — Beginning at 7:00 PM
Kent County Public Library
408 High Street, Chestertown, Maryland 21620
2. Wednesday, January 7, 2015 — Beginning at 7:00 PM
Chesapeake College – Cadby Theatre, Wye Mills Campus
Eastern Shore Higher Education Center
Routes 50 and 213, Wye Mills, Maryland 21679
3. Thursday, January 8, 2015 — Beginning at 7:00 PM
Salisbury University, Room TETC – 153
1101 Camden Avenue, Salisbury, Maryland 21801
4. Tuesday, January 13, 2015 — Beginning at 6:00 PM
Montgomery County Council Office Building Auditorium
100 Maryland Avenue, Rockville, Maryland 20850
5. Wednesday, January 14, 2015 — Beginning at 6:00 PM
Prince George’s County Community College Room 227 – Community Room B
301 Largo Road, Largo, Maryland 20774
The 2015 Northern Virginia Housing Expo will take place on Saturday, March 21, 2014 from 10 AM to 3 PM at Herndon High School, 700 Bennett Street, Herndon, VA. Hosted by AHOME in cooperation with VHDA and all of the local Northern Virginia housing agencies, this 5th annual event will inform and equip renters and first-time buyers looking for Northern Virginia housing options. Free and open to the public, the event will feature dozens of exhibits and useful workshops. The group has also created a new web site loaded with housing resources at www.NoVaHousingExpo.org. Early Registration Rates will be available until January 31, 2015.
The demolition of the vacant Daily Times building in Salisbury to make way for a new medical center and the redesign of the Brentwood Fire Station into a municipal center that will house town offices, the police department and a public meeting space are two of the 27 projects receiving grants through the Strategic Demolition and Smart Growth Impact Fund program.
The awards include $2.5 million to help Baltimore demolish long-time vacant buildings in strategic neighborhoods as part of its Vacants to Value initiative.
DHCD is announcing the award of $7.5 million to benefit 27 projects in 12 counties and Baltimore City. Those funds are expected to leverage an additional $178 million in public, private and philanthropic investments.
The Strategic Demolition and Smart Growth Impact Fund program compliments the Community Legacy program by providing the necessary predevelopment funding to jump-start transformational community and economic revitalization projects.
Established in 2012, the program funds such predevelopment activities as demolition, land assembly and infrastructure improvements that are critical to attracting other public and private investment. This funding is also available to local governments and nonprofit community development corporations, who many times are working with private entities and other partners invested in Maryland neighborhoods and focused on creating jobs and housing opportunities.
Please visit the Maryland DHCD Blog to see the full list of Fiscal Year 2015 awards.
The NeighborWorks America board of directors has named Paul Weech the new president and CEO for the organization. Weech brings to the position more than 25 years of leadership experience in housing, community development and financial services.
“I am very excited to take on the stewardship of such a strong and historic organization, which has been a major force for progress in housing and community for more than 35 years,” says Weech. “I believe my role is to support and continue to grow what is already a pre-eminent organization with the reach, resources and commitment to truly make a difference.”
Weech comes to NeighborWorks America from the Housing Partnership Network, a business alliance of the nation’s top performing nonprofit development organizations. As the Housing Partnership Network’s executive vice president for policy and external affairs, Weech was responsible for policy development and advocacy leadership for the organization, including producing its policy treatise, “Toward a Housing Policy Reform Agenda.” In the two years before joining the organization full time, he provided policy leadership for both the Housing Partnership Network and the Stewards of Affordable Housing for the Future.
Weech has served as chief of staff at the U.S. Small Business Administration; staff director for the Senate Committee on Banking’s Subcommittee on Housing and Community Development, Housing and Urban Affairs; and senior analyst for housing and credit for the Senate Committee on Budget. He also worked in various mission-related roles in Fannie Mae’s National Community Lending Center and Office of Corporate Strategy.
Whether in the public or private sector, Weech has made service to others the cornerstone of his career. “I believe that by working together we have the opportunity to lift people up, increase their opportunities and outcomes, and help them provide a better life for their children,” says Weech. “I have been blessed to have a career in which I wake up every day with meaning in my life.”
Weech serves on the boards of several organizations, including the National Low Income Housing Coalition, National Housing Conference, Bollinger Foundation, Housing Association of Nonprofit Developers and Ford School of Public Policy’s Alumni Board. He received a Master of Public Policy degree from the Ford School for Public Policy Studies at the University of Michigan and a Bachelor of Arts in political science from Duke University.
Press release can also be viewed on the NeighborWorks America website.
The Federal Housing Finance Agency (FHFA), the federal regulator of Fannie Mae and Freddie Mac, announced that it would lift its suspension of mandatory funding to the Housing Trust Fund (HTF) and the Capital Magnet Fund (CMF). These two programs were created by Congress in 2008 to increase the supply of affordable housing in the U.S. As originally envisioned, both programs would receive funding through a modest assessment on Fannie’s and Freddie’s ongoing business. FHFA suspended those obligations in 2008 when Fannie and Freddie were put into government conservatorship.
This long-awaited announcement to capitalize the Housing Trust Fund is the most significant federal initiative for affordable housing production in many years. So what exactly does this mean? How will the program work? How much money will be available for housing? And who will these funds serve?
Enterprise Community Partners has provided an excellent synopsis of the specifics of the bill: blog.enterprisecommunity.com/2014/12/freddie-funding-housing
Please click here for the article in its entirety.
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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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