WHAT CAN THE LEAGUE DO TOWARDS INCREASING THE SUPPLY OF HOUSING AFFORDABLE TO LOW AND MODERATE INCOME HOUSEHOLDS IN MARYLAND?

 

A RESOURCE GUIDE

 

LWVMD

 

SEPTEMBER  2006

 


 

                                                TABLE OF CONTENTS

 

INTRODUCTION.. 3

I What is meant by affordable housing?. 4

II Local league housing positions. 5

III 2000-2005 increase in median price – for sale housing... 9

IV Building Permits. 10

V Housing choice voucher program... 11

VI Nonprofit housing groups active in the County.. 13

VII Impact fees, recordation fees, and transfer taxes. 19

VIII  Rental registration and/or regular inspection of rental units. 22

IX Inclusionary zoning/MPDU legislation.. 24

X Dedicated revenue source for affordable housing and other affordable housing policy initiatives. 26

XI Regulations that may have the effect of limiting affordable housing... 28

XII Financing tools used to expand affordable housing options. 30

XIII LWVMD POSITIONS ON HOUSING... 32

XIV LWVUS POSITIONS ON HOUSING... 33

XV MARYLAND COUNTIES BY REGION/LEAGUES INCLUDED IN STUDY.. 35

XVI LESSONS LEARNED.. 36

XVII TURNING INFORMATION INTO IDEAS FOR ACTION.. 39

Bibliography.. 41

 


 

 

INTRODUCTION

 

In 2005, the need for affordable housing was listed as a priority for action by many local leagues.  The existing lack of affordable housing throughout the state has been exacerbated in the past several years by the “real estate bubble”.  Local, state, and strong national positions exist on affordable housing, but it was not clear what the League should advocate for to alleviate this housing crisis. Our goal is the provision of safe and affordable housing in each jurisdiction that is within economic reach of all that community’s citizens.  The state League decided to form a committee to survey the status of happening with housing in each County. 

 

The Committee compiled this data to identify activities, regulations, laws, and funding sources that are effective in expanding housing opportunities in each jurisdiction, and those that are the most egregious in eliminating opportunities.  While committee members gathered information from most counties – the committee was not able to collect  significant information from, Caroline, or Prince George’s Counties.  The second part of our work is evaluating what was learned; formulating descriptions of policies that should be encouraged and a similar list of housing related policies that should be discouraged at state and local levels; and determining whether existing state and national positions on affordable housing support these policies so that advocacy efforts for affordable housing can be increased at both state and local levels.

 

Today there is a rapidly increasing housing affordability gap affecting a wide range of families and individuals in our Country.  According to the National Low Income Housing Coalition, in the past 5 years hourly wages have grown by only 2% while the median home price has increased by 52%.  According to the National Center for Housing Policy, 1 in 8 households in the USA now pay more than 50% of their income for rent or mortgage payments and/or live in physically dilapidated housing. Existing housing programs, funding  and policies falls dismally short of the need for housing assistance.  Less than 25% of income qualified low, very-low or extremely-low households receive any type of housing assistance. Maryland ranks as the fourth least affordable state for housing according to the National Low Income Housing Coalition report of 2004.

 

In 2005, the US Department of Housing and Urban Development updated their 1991 report “Not In My Back Yard: Removing Barriers to Affordable Housing”, concluding , “NIMBYism continues to prompt the implementation of regulatory barriers that pose major obstacles to rental housing, high-density development, and other types of affordable housing”.   The Campaign for Affordable Housing, a national nonprofit, reviewed public opinion polls and determined that “opinion poll respondents rank the need for affordable homes for low and moderate income families second only to health care and employment”.  In a recent HUD publication entitled The Public’s View of Affordable Housing, HUD stated: “There is a broad consensus that government should see that everyone has access to decent and affordable housing…According to the National Association of Realtors 68% of those surveyed in 2005 agreed ‘that government should place a higher priority on making housing – both for renters and homeowners-more affordable in my area”.  The Minnesota Housing Partnership (which included the LWV as a member) www.HousingMinnesota.org , sponsored a statewide public relations campaign emphasizing:

·       Those who need affordable housing are important to us and our community

·       Those living in safe, affordable housing are better able to take responsibility for themselves and raise their children to become productive citizens

·       Our community will be stronger if it adequately meets the housing needs of its workforce.

 

 

 

I What is meant by affordable housing?

 

 

There are two ways to look at what is affordable housing: 1) What an individual or family can afford, or 2) The housing stock in a community.

 

What an individual household/ family can afford to pay for housing is defined as housing demand:

•According to the federal government, housing is considered affordable if it costs no more than 30% of a household’s gross monthly income. For renters, this definition includes rent and utilities.  For homeowners, the federal definition includes mortgage payment, property taxes, insurance, and utilities.

•Housing industry standards are slightly looser estimating a household’s home-purchase affordability ratio at about 3 times its annual gross income. Using multifamily industry standards, a renter household can afford to spend up to 30% of its gross monthly income on contract rent( as opposed to 30% for rent+ utilities).

 

Housing supply is the existing housing in a jurisdiction.

•For homeownership units - estimate earnings needed to afford to purchase a home at the median sales price for the jurisdiction or estimate the price that a household earning the median income for the jurisdiction can afford to pay.

•For rental units, - estimate the rental household income necessary to afford a two-bedroom or three-bedroom unit at the price at which the  US Department of Housing and Urban Development says 40% of the units in that area rent for less than and 60%rent for a higher amount (the “fair market rent”).

 

Charts showing median housing prices, are included as Section III.

 

 

 

II Local league housing positions

 

Baltimore City

Work with local government and community associations to maximize the availability of decent safe affordable housing for all citizens.  Support for:

·       Effective housing code and zoning codes adequately enforced

·       Rent subsidies for low income families

·       Local emphasis on the following national positions

o      Fair housing laws and equal access to housing

o      Publicly assisted housing to be included in viable, balanced communities with provisions that encourages integration and stability

o      Zoning practices and procedures that will counteract racial and economic isolation

o      Participation of citizen groups in the development of publicly assisted housing programs

 

Calvert

·       Advocate for housing in the affordable range for moderate and low income families and for the elderly.

·       Advocate for inclusionary zoning, acquisition of public land for low cost housing and allocation of a percentage of all sewer taps for low cost housing.

·       Support affordable/work force housing for families with children.

 

Howard -       

·       Support for an adequate housing choice, in a suitable living environment, within the economic reach of all citizens (Persons) of all ages. Support for maintaining and increasing diverse housing types as well as increasing the number and percentage of affordable units in the county (2005)

·       Relocating low-income persons displaced by government action (1968, 1985, 2005).

·       Assistance in the relocation of low and moderate income persons involuntarily displaced. (2005)

·       Zoning regulations which require a minimum percentage of affordable housing for persons of moderate income. (2005)

·       A portion of new affordable housing to be reserved for Howard County public employees. (2005)

·       Favorable tax treatment for the building and maintaining of affordable housing. (2005)

·       Public and private partnerships to build and manage affordable housing facilities (2005)

·       Other measures to include county financing and construction of housing: public financial assistance to rehabilitate existing housing; rental housing. (2005)

 

·       Growth Management measures that include:

o      a growth cap which controls the pace of private development when public services are inadequate.

o      an adequate public facilities ordinance which defers new development until essential public facilities, which meet established capacity standards, are available to service the development. Essential facilities are water, sewerage, schools and roads.

o      impact fees as a means of funding some of the capital costs incurred when new development occurs.

o      developer-provided sites and/or public facilities which meet county-set standards for acceptability.

o      agriculture as a preferred land use in the rural areas of the county.  (1991)

o      provisions for clustering in rural areas through legal mechanism that would:

o      maintain “remainders” as open land in perpetuity, by such methods as turning over “remainders” to a third party like an environmental trust;

o      requiring “remainders” to be of reasonable size and quality (1991)

 

Kent

Support for the: Active enforcement of the county-wide housing code; active enforcement of the county-wide building code; County government actively seeking means to meet the county housing needs through private and public money.

 

Montgomery

Housing and public accommodations:  support for Montgomery County policies and programs to increase the supply of affordable housing, to prevent discrimination in housing and public accommodations, and to meet the needs of the homeless. (1989)(2005)

Support for:

·       Affordable housing:  Comprehensive efforts by Montgomery County to maintain and increase the supply of affordable housing including: (1967,1968,1970,1978,1985, 1989, 2005)

o      flexible and comprehensive approaches using private, county, and federal funds

o      Continued reliance on the Montgomery County Housing Opportunities Commission

o      changes in zoning ordinances and related regulations to require provision for low – and moderate income housing in all residential and mixed – use zones

o      use of scattered sites and application of the principles of economic diversity in residential zoning categories

o      use of inclusionary zoning, Moderately Priced Dwelling Units

o      preservation of existing communities where feasible and/or desired

o      strict enforcement of housing codes with shift to civil penalties

o      use of tax structure and policies such as tax abatement to maintain and increase the supply of affordable housing

o      supportive community services

o      permitting accessory apartments with adequate controls to prevent neighborhood deterioration 

o      The regulations governing approval of accessory apartments should be changed

§       reduce the 5-year requirement for a house to have an accessory apartment 

§       allow the board of appeals to use discretion in granting waivers in exceptional cases

o      encouragement of increase in the stock of single room occupancy (SRO) housing such as personal living quarters by appropriate means

o      permitting use of mobile homes on scattered sites and encouragement of well designed mobile parks

·       Fair Housing 

o      Comprehensive fair housing legislation in Montgomery County covering

                        real estate and lending practices (1966, 1989)

o      Continuation of the office of Landlord/Tenant Affairs with quasi-judicial powers (1972, 1989)

o      A model lease, defined as a mutual contract, which includes a warranty of habitability and protection against retaliatory eviction (1972,1989)

·       Homelessness

o      Montgomery County policies and programs to provide shelter and services to  meet the needs of the homeless, including emergency shelters, transitional housing, detoxification centers, halfway houses, permanent group housing for persons with disabilities and support personnel. (1989)

·       Public Accommodations and Human Relations

o      Comprehensive legislation to outlaw discrimination in Montgomery County with respect to public accommodations

o      Adequate financing for the Human Relations Commission so that it can perform the functions authorized in the law (1964)

 

St. Mary's

·       Create a housing trust fund from fees, taxes, and contributions to be used to construct low income/affordable housing.

·       Establish a community land trust of donated or purchased land to encourage builders to construct low income/affordable housing

·       Examining the concept of monetary incentives for developers who build low income/affordable housing or include a percentage of such housing in new developments.

 

Talbot

·       Recommend that the Board of the League of Women Voters of Talbot County take action, as called for in the local, state and national League positions, to promote inclusion of the following in the town and county Comprehensive Plans

o      “Phase in a system of scheduled inspections of rental properties to enforce the Minimum Livability Code, ensuring that all rental housing is adequately maintained.

o       Take other action as deemed necessary in conjunction with this recommendation.  

 

·       Washington

·       The League of Women Voters believes that government should develop policies that assure the opportunity for individuals and families to obtain decent housing and therefore supports  efforts  that would help county employees afford homes in Washington County. The League thinks it is important for county employees to live in the county where they work.