AFFORDABLE HOUSING UPDATE FACT SHEET
CONTENTS
Housing
For Low Income Families and individuals
Programs
to Improve Communities
“Pass-through”
of Federal Funds for Smaller Jurisdictions.
Examples of local programs
that improve the availability or affordability of housing
Rental
registration and/or regular inspection of rental units
Revenue
sources for affordable housing
Regulations
that may have the effect of limiting affordable housing
TURNING INFORMATION INTO
ACTION
LWVMD
Affordable Housing Committee
AFFORDABLE
HOUSING UPDATE FACT SHEET
September 2006
The 2005 League of Women
Voters of Maryland Convention adopted a focus and update on affordable housing
throughout the state with a local information exchange on how to achieve a
greater supply of housing for low- and moderate-income households. In 2005 the
need for affordable housing was listed as a priority for action and strong
local, state and national positions already exist. Recently the disparity
between housing costs and family income has become worse. Our goal is the provision of safe and
affordable housing in each jurisdiction that is within economic reach of all
the community’s citizens, but each jurisdiction must address the problem in its
own way.
A rapidly increasing housing
affordability gap affecting a wide range of families and individuals exists in
our country. According to the Center
for Housing Policy of the National Housing Conference, 1 in 8 households in the
In
In 2005, the U.S. Department
of Housing and Urban Development (HUD) updated their 1991 report “Not in My
Back Yard: Removing Barriers to Affordable Housing” concluding that
NIMBYISM (Not in My Back Yard) 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 non profit organization, reviewed public opinion polls
determining 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 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…this year 68% of those surveyed by the National Association of Realtors
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 LWVMN as a member) sponsored a statewide public
relations campaign in the 1990s that helped obtain increased public support and
state funding for affordable housing.
The campaign emphasized
Affordable
Housing Defined
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 plus
utilities.
We
think of federal expenditures on housing as primarily money to help low and
moderate-income families and individuals. That is not the case! Housing related tax expenditures to
homeowners (tax deductions for mortgage interest, property taxes and exemptions
from capital gains) dwarfs housing assistance (the money Congress budgets for various
federal low/moderate income housing programs).
Federal housing assistance budget authority has decreased 48% since
1976. Meanwhile, housing related tax
expenditures increased by 260% since 1976.
Federal
housing programs administered by HUD can broadly be divided into two categories:
those that provide housing for low income families and individuals and those
that are focused on improving communities. While there are well over 100
federal housing programs, some of the more common ones include:
Public
Housing HUD provides both operating subsidies and
capital funds to Housing Authorities.
Housing
Choice Vouchers Tenant-based voucher assistance provides rental subsidies for
standard-quality units that are chosen by the tenant in the private
market. Seventy-five percent of newly available vouchers must go to
families with incomes below 30 percent of the area median income.
Elderly
Housing (Section 202) Capital advances are made to eligible private, nonprofit sponsors to
finance the development of rental housing with supportive services for the
elderly.
Housing
for persons with a disability (section 811) Capital advances are made to eligible
nonprofit sponsors to finance the development of rental housing with the
availability of supportive services for persons with disabilities.
The
Shelter Plus Care Program (S+C) Provides grants for rental assistance, in combination with
support services to homeless persons with disabilities (primarily those with
serious mental illness, chronic problems with alcohol and/or drugs, and
acquired immunodeficiency syndrome (AIDS), and related diseases).
Emergency
Shelter Grants
(ESG) Program provides grants to help increase both the number and quality of
emergency shelters for homeless individuals and families, to operate these
facilities and provide essential supportive services, and to help prevent homelessness.
Housing
for Persons With AIDS This program provides grants to eligible states, cities,
and nonprofit organizations to provide housing assistance and related
supportive services to meet the housing needs of low-income persons with
HIV/AIDS and their families.
Community
Development Block Grants (CDBG) Program provides annual grants on a formula basis to entitled
communities to carry out a wide range of activities directed toward
neighborhood revitalization, economic development, and improved community
facilities and services. Entitlement communities develop their own programs and
funding priorities and consult with local residents before making final
decisions. All CDBG activities must meet one of the following national
objectives: benefit low- and moderate-income persons; aid in the prevention or
elimination of slums and blight; or meet certain community development needs
having a particular urgency.
HOME This is a grant program
available to states and local governments to support implementation of local
housing strategies designed to increase homeownership and affordable housing
opportunities for low- and very low-income Americans. Participating
jurisdictions may use HOME funds for a variety of housing activities, according
to local housing needs. Eligible uses of funds include homeownership
downpayment (American Dream Downpayment Initiative); tenant-based assistance;
housing rehabilitation; assistance to homebuyers; and new construction of
housing. HOME funding may also be used for site acquisition, site improvements,
demolition, relocation, and other necessary and reasonable activities related to
the development of non-luxury housing.
Healthy
Homes and Lead Hazard Control Addresses childhood lead-based paint poisoning and
other childhood diseases associated with housing. It promotes preventive
measures to correct multiple safety and health hazards in the home environment.
Fair
Housing and Equal Opportunity Office This Federal office investigates, conciliates, and
charges cases of housing discrimination prohibited by the Fair Housing Act. The
Fair Housing Act prohibits discrimination in housing based on race, color,
religion, sex, national origin, disability, or familial status (includes
individuals or families with children under 18 years of age and pregnant
women). The Fair Housing Act applies to almost all housing in the country.
The
Maryland Department of Housing and Community Development operates housing
programs in four broad categories.
Programs funded with state bonds and general
funds and administered by Community
Development Administration (CDA)
·
Homeownership
programs Funded in FY 2006 at $7.5M (state funds).
The
CDA Mortgage program provides low interest loans to eligible low- to
moderate-income homebuyers through private lending institutions throughout the
state. The Department recently launched
a 35-year mortgage product - More House 4 Less, with interest only
payments for the first five years.
The
Down Payment And Settlement Expense Loan program provides 0% deferred
second mortgage loans to eligible homebuyers. Homeownership For Individuals With
Disabilities Program. Homes are listed and sold through Long and Foster. Maryland Housing Rehabilitation Program -
Single Family is to preserve owner occupied single-family properties and
one to four unit rental properties. Special Targeted Applicant Rehabilitation
Program (STAR) assists in the rehabilitation of extremely low income (up to
30% area median) owner occupants of single family homes and families with
incomes of less than 55% of median with unfavorable credit ratings that make
them ineligible for other Department financing.
· Rental Housing Programs Funded in FY 2006 at $13.85M (state funds)
Rental Housing Production Program provides loans of up to $1.5M per project for
the development of affordable multi-family housing in priority funding
areas. Partnership Rental Housing, funded in FY2006 at $6M, provides funds
in partnership with local government for the rehabilitation and construction of
multifamily rental housing for families with limited incomes.
·
Special Loan Programs Funded in FY
2006 at $8M (state funds).
Accessory,
Shared And Sheltered Housing Program (ACCESS) finances the creation of accessory, shared
and sheltered housing facilities. The Historic
Preservation Loan Program provides loans to nonprofits, local jurisdictions,
businesses and individuals to assist in the protection of historic property
The
Heritage Preservation Tax Credit Program provides
Federal
Low Income Housing Tax Credits to support the development of multi-family rental
housing. This is a competitive process with awards going to profit and
nonprofit developers of multi-family housing.
Division
of Credit Assurance provides credit enhancement of bonds and mortgages for affordable
housing and community development, a banking function not of primary concern to
advocates.
Other State Programs
The
Community Legacy program is designed to help urban neighborhoods,
suburban communities and small towns that are experiencing decline and
disinvestment. It is funded at $5M in FY 2006 and operated by the Division of
Neighborhood Revitalization. The Maryland
Housing Trust Fund was created by the Maryland General Assembly to promote
affordable housing and is funded by a portion of the interest generated by
title company escrow accounts. It is listed by the state with DHCD programs.
The state budget estimates that the fund will allocate $1.45M in FY 2006 for
capital grants and a revolving loan program.
In
Multi-family
dwellings are licensed. The license must be renewed annually.
The license fee is $25 per rooming unit and $35 per dwelling unit.
A license may be issued or renewed only if (1) all dwelling units are currently
registered; (2) the license fee has been paid; (3) the premises have been
inspected; and new this year (4) the property is registered with Maryland
Department of the Environment as required by the Reduction of Lead Risk In
Housing Act - Environmental Article§6-8.
Inspection
programs in the Counties range from none in Calvert and Cecil Counties to Montgomery County which
issues multifamily and single family licenses. Specific information about each
County will be covered in more detail at the unit meetings.
The County Council adopted a
Workforce Housing Ordinance on
In
The LWVUS has strong positions on affordable
housing that we can use as the basis to increase the League's state and local
affordable housing advocacy.
ADVOCACY
ON THE STATE LEVEL:
1. In July 2006, the Maryland Association of
Realtors started a campaign to increase public awareness of the need for more
affordable housing. Should LWVMD explore the possibility of working with
them on this campaign?
2. As the value of
real estate throughout the state increases dramatically, homeowners face
increased real estate taxes. Renters face rent increases to cover the
cost of their landlord's increased real estate taxes. State legislation
exists (referred to as circuit breaker) to limit real estate taxes for select
categories of homeowners. legislation in FY 2006 expanded those
categories. Legislation also exists for select renters to limit the
impact of real estate taxes on rent increases. Is publicizing these
savings for select low- and moderate-income homeowners and renters a campaign
the League should consider?
3. In Howard and
ADVOCACY ON A LOCAL
LEVEL:
Local League positions on
affordable housing vary considerably, but state and national positions can be
used for local advocacy.
·
Are the voucher
and public housing programs serving those most in need?
·
Has your
community established local priorities as to who gets vouchers (i.e.
preference for victims of domestic
disputes, for families experiencing homelessness etc)?
·
Does your County
use any of its vouchers for a voucher homeownership program?
·
Are voucher
holders dispersed throughout the community or segregated in low income or
minority communities?
·
Is this scarce
resource fully utilized or are there vacancies and under-utilized vouchers?
3. Does your jurisdiction have a dedicated source of
revenue for housing, such as a transfer tax or recordation fee? The
annual revenue that they generate increases as the volume of housing production
and the cost of housing increase. If a local League is looking for a
local source to recommend for funding local affordable housing initiatives,
looking at the revenues generated by these fees over the last four or five
years is a good place to begin. Some Counties (
4. Many jurisdictions require the payment of impact
fees when new housing is developed. This fee is to be used to pay for the
additional services residents of the home will require from the
jurisdiction. The amount of these fees are added to the cost of the new
housing making the production of housing affordable to moderate income families
(often referred to as workforce housing) more difficult. One option,
rather than a flat impact fee per unit, is to scale the amount of the impact
fee either to the square footage or the price of the unit thereby modest homes
for lower income families would require a lower impact fee. This might be
a logical campaign for a local League, whose County has a high impact fee
and where there is major residential building occurring, to consider.
5.
6.
Does
your jurisdiction have a master/general plan with a housing component? Local research on recent population growth
and projected population growth for each county and information on building
permits can be used to explore whether each jurisdiction is providing
sufficient opportunity to house all segments of their population.
7. In many jurisdictions, the condition of affordable
rental housing is a big concern. Requiring the registration of all rental
units, as
8. Might simple publicity of current housing prices and their disconnect to median incomes either in local League newsletters or as letters to the editors of local newspapers, be a first step in increasing affordable housing advocacy on a local level?
9.
Public information campaigns
about the demand for affordable housing and means to increase the supply of
affordable housing are often best accomplished by coalitions. The League
resource person has nonprofit group listings in each jurisdiction. These groups are working to increase the
local supply of affordable housing.
Local Leagues could consult them about whether a coalition for
affordable housing exists in the jurisdiction or if these groups are interested
in working with the League to start one.
For example,
Center for Housing Policy of
the National Housing Conference www.nhc.org/housing/chp
National Low Income Housing
Coalition www.nlihc.org
Maryland Department of
Housing and Community Development www.dhcd.state.md.us
US Department of Housing and
Urban Development www.hud.gov
Campaign for Affordable
Housing www.tcah.org
National Association of
Realtors www.realtor.org
Minnesota
Housing Partnership www.housingpartnership.org
Ruth Crystal, Chair
Sue Buswell
Dinah DeMoss
Carol Filipczak
Jean Israel
Melpi Jeffries
Anne Lee
Chris Madro
Roberta Safer
PJ Widerman
Joyce Woodford