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Howard County's Affordable Housing Shell Game

News

Howard County's Affordable Housing Shell Game

Hiruy Hadgu

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The introduction section of the 2006 "Report of the Howard County Task Force on Affordable Housing", closes by stating "The Task Force concluded its work by noting that the time allotted to consider this very complex issue was not sufficient to develop detailed implementation plans..."

That line encapsulates the County's posture toward affordable housing. Rhetoric and platitudes, but no action. Howard County has failed to provide any meaningful affordable housing to its residents. The same report estimated a conservative affordable housing deficit of 20,000 units. In 2006!

The data points available since then indicate very little progress in alleviating the shortages.

Who Needs Affordable Housing in Howard County?

According to the latest “Self-Sufficiency Indicators” report published by the Association of Community Services, 22% or 24,000 households in Howard County have income less than $60,000 and 6,300 households have income less than $20,000.

About 500 students that attend Howard County Public schools are homeless.

The same report states, in 2014, there was a shortage of over 6,600 rental units for households who made less than $50,000 and there are currently over 5,000 households on the Housing Choice Vouchers waiting list because only 761 rental units existed in 2017.

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Earlier this year, I wrote about the gimmicky nature of the solutions provided to the county's seniors. By 2035, nearly 22% of the population in Howard County will be aged 65 or older and 11% will be 75 and older. In addition to those who desire independent living, a proportion of the older adult population will need assistance and caregivers.

According to the Alzheimer's Association, 11% of those 65 and over and 38% of those 85 and over have Alzheimer's disease. By 2035, there will be nearly 24,000 older adults aged 85 and over. Not only will many over the age of 65, who are on fixed income need affordable housing, so will their caregivers.

The starting salaries for those who provide essential services to our county, such as school teachers, fire fighters, and police officers are in the $50,000s, if hired at entry-level. While these vary depending on experience, the cost of housing make it increasingly difficult for those who provide such essential services to live in the community they serve.

This Baltimore Sun article describes the challenges those with mental illness face to find affordable housing in Howard County. "Those with mental health conditions seeking support in Residential Rehabilitation Programs in Howard County, which provide supportive public housing and access to care and resources, have to wait between three to four years to secure a spot."

Another Baltimore Sun article describes the challenges that children with disabilities face as they move from K-12 schools into adulthood, finding suitable housing that meets their unique needs.

The state of affordable housing in Howard County is a disaster. The zoning regulations and agreements reached with developers have resulted in net lower number of affordable housing through alternative compliance to reduce the percentage of affordable homes, by charging so-called fees-in-lieu that have no market-basis, or by simply exempting large regions of the county from requiring any affordable housing.

The Downtown Columbia Affordable Housing Farce

The latest missed opportunity for meaningful affordable housing occurred during the Downtown Columbia Plan negotiations.

According to accounts by affordable housing advocates, the county and Howard Hughes Corporation (HHC) reached an agreement to pay money into a "Housing Trust Fund", which would be managed by  the Columbia Downtown Housing Corporation (CDHC) to make affordable housing available in Downtown Columbia.

But the developer did not keep its end of the deal. A February 2015 report by CDHC concluded: "it is clear that, to this point, developers have determined that it is more advantageous to pay the fee than to build affordable units."

In a 2015 County Council work session HHC Vice President of Development Greg Fitchitt  stated "The letter of the law essentially allows us to develop 5,500 market rate units and pay into the trust fund." They fully intended not to build a single affordable housing.

HHC Affordable Housing Need Assumptions

The final deal reached between the county and HHC in terms of affordable housing was also based on extremely flawed assumptions. Consider this piece of a slide show presentation by HHC in its 2016 pre-submission presentation for the Downtown Columbia plan.

A single mother (who earns $10/hour) and her son would pay $520/month to rent a one-bedroom apartment.

It does not take any additional data to challenge the numbers stated in the figure. But, the “Self-Sufficiency Indicators” report completely discredits this assumption. In reality, one adult and infant would need an income of $72,834 face a housing cost of $1,591 in order to live in Howard County. The developer estimated $20,800 and housing cost of $520.

As one reads the final developer rights and responsibilities agreement (DRRA) entered by the county with the developer, every subsequent section provides Howard Research Development (HRD), which is part of HHC, a way out of the previous section.

For example, in Article IV of the DRRA, Section 4.4.E provides “HRD may propose a comparable substitute location for the applicable LIHTC Development…[and]…the Covenant Parties agree to work diligently and in good faith with HRD to consider such comparable substitute location for the applicable LIHTC Development.”

Surely it is not unusual to have such contingency provisions in contracts. What makes this one particularly egregious is how HRD is already getting everything it wanted with respect to location of affordable housing – on top of a fire station, on top of a library, on top of Toby’s Dinner theater – away from the expensive apartments.

Furthermore, the contract uses the term “Net New” dwellings, meaning the percentage of affordable housing is calculated by excluding dwellings that are already under construction, which will effectively lower the percentage of new affordable housing to be built.

The MIHU Mess

According to the county's website, the moderate income housing unit "(MIHU) Program is an inclusionary zoning program that requires developers of new housing in specific zoning districts to sell or rent a portion (generally 10-15%) of the dwelling units to households of moderate income. MIHUs are sold or rented at affordable prices and rents set by Howard County Housing."

MIHU Income Eilibility

The income eligibility is shown in the table.

Under certain conditions, the law allows the developer to pay a "fee-in-lieu" of building affordable housing.

For example, in the Western Part of the county where homes prices can reach and exceed $1 million. But, what is this fee?

In 2013, the fee calculation methodology changed to a $/sq. ft-basis. It was set at $2.00 per sq. ft and pegged to a regional construction cost index. The fee-in-lieu as of 2017 is $2.09 per sq. ft. The market-basis for the fee is not clear. How was the initial $2.00 per sq. ft selected? If it is not market based, the dollar total of fees-in-lieu are not sufficient to produce the same number of units that would have been produced had developers opted to build the units.

No of Units Subject to Fees-in-Lieu

After the 2013 fee-in-lieu change, the number of units subject to fee-in-lieu sky-rocketed. This figure shows that the number of homes jumps from 3 in 2009 to 261 in 2013.

Top Three MIHU Exempted Projects

The following table lists the top-three developments that received this MIHU exemption from 2013 to 2017.

In Howard County, many I have spoken with have shared with me their deep distrust of the developers' ability to work in good-faith with the county to provide solutions. Many have also shared with me their lack of faith in the county to enforce zoning regulations.

I have witnessed these as well. Many will recall, the recent adequate public facilities ordinance (APFO) debate, during which developers suddenly had an affordable housing awakening.

Affordable Housing as a Wedge Issue

Before CB1-2018 - the bill that updated the county's APFO - was passed, developers as well as certain county leaders added a loophole amendment, to exempt certain projects from the growth management standards.

The loophole provided an exemption if the proposal is billed as an “affordable housing” project. Four conditions must be met in order for the project to be approved: at least 40% of the project should serve those with 60% of area median income, the project is seeking or has received low income housing tax credits, the project has received the County Executive’s support, and a hearing by the County Council.

It is not difficult to foresee in the near future many “affordable housing” projects brought to the council. Given the developers and the county’s predilection to provide alternative compliance and fee-in-lieu exemptions, the final version of the project will have very little if any of the initially proposed number of affordable homes. This is how the county operates. This is how developers operate. They maneuver around the legal requirements.

What Should be Done?

In the search for solutions, there are serious stakeholders and there are those who simply create obstacles.

In 2015, CDHC presented a recommendation that made 15% of housing affordable to households at an average of 60% of Average Median Income (AMI) - 1/3 would serve 40%, 1/3 at 60%, and 1/3 at 80%.

This was met with stiff resistance. Instead of providing any workable solution, developers enlisted organizations such as Howard County Chamber of Commerce, who sent a letter saying “we agree with the expectation that downtown Columbia will include expanded opportunities for in-town living in both housing for and affordability. The need for affordable, workforce housing is a goal shared by all. We do not, however, agree with the recommendations proposed by CDHC.

The public does not trust the process. County leaders have given everything in return for nothing. Exemptions, free money by way of tax-increment financing (TIF), very low fee-in-lieu exemptions, and developers' lack of good-will, has led to our current problem.

So the first thing to do is establish this trust in the process.

Next. No exemptions. Require a minimum of 10 to 15% affordable housing in all zoning districts of the county. New Town, Turf Valley, Maple Lawn, Village Centers, Downtown Columbia, River Hill, either have received exemptions or do not require any affordable housing.

Once the threshold is established, survey the county's existing affordable hosing inventory and the locations. In parts of the county where the threshold is met, require the developer to pay a fee that is market based.

Where possible revise existing agreements. If the Downtown Columbia DRRA can be renegotiated, we need to go back to the drawing table. I have already stated my concerns regarding the $90 million TIF the county has given to HHC. These questionable practices should be audited to protect the county's welfare.

Inclusionary zoning practices rather than practices that concentrate poverty in specific areas of the county should be the goal. If we continue in the current path, we will increase the segregation by income and race, which is already apparent. All we have to do is look at the free and reduced meal (FARM) percentages in certain schools.

We need solutions. Not platitudes.

We need problem solvers. Not obstacles.