(Challenges of Rural Counties in Providing Affordable Housing for Residents)

Dinah L. DeMoss (cyber_terrapin@verizon.net), LWVKC, September 25, 2006

NOTE: This is not an exhaustive report but the current impressions of the author. All observations and opinions are that of the author.

There is tremendous growth throughout the Eastern Shore (ES). It appears that some local governments are successful in working with developers to provide for affordable housing either through inclusionary development or in the funding of infrastructure upgrades.

The ES is becoming the ‘Affordable Housing’ of the Western Shore. Telecommuting, Flex Time, and an increase in acceptable ‘drive time’ makes the ES very attractive for relocations and second homes. The ES attracts retirees from D.C., Baltimore, Philadelphia, and even NYC. These pressures are pricing the ES ‘workforce’ out of the housing market. Rising prices are limiting the availability of affordable rental units.

‘Economy of Scale’ comes into play, with the administration of many of the tried and true tools being too costly for the small administrative infrastructures of the counties. Budgets of most ES counties are modest, more definitive and aggressive approaches to most issues, especially homeownership, are not deemed to be cost effective. It was stated that Kent County ‘used HUD earlier but paperwork was prohibitive’.

An estimate is 12% poverty on the ES. A look at census figures indicates a trend toward female headed households including grandmothers raising grandchildren and an advancing average age with many on fixed incomes. Rising utility rates, increasing assessments, and growing maintenance costs are presenting affordability issues for a growing number on the ES.

Poverty is being addressed through housing, employment, transportation, health care, and social services. The address of these issues is done on a regional basis, either treating the entire Eastern Shore (ES) as a region or the division of the ES into Upper, Middle, and Lower. The consortium of for-profit, non-profit, religious, and educational organizations and institutions addressing affordable housing on the ES (utilized by local jurisdictions and counties) spans counties, regions, states, and even reaches to the Western Shore.

There is concern, both of the jurisdictions and the citizens, that has all scrambling to address the issue of Affordable Housing. The problem has a wide scope from homelessness to Workforce Housing. There is the issue of owner’s property rights vs. the public good and development rights vs. preservation of Agriculture Culture. (Some property can be developed moderately to low priced, but not cost effective for the developer.)

MPU’s are still out there, even under our atrophied economy and outside pressures. Many elected officials are advocating high density, mixed use, and Smart Growth against a tide of general public opposition. Attention is being paid to MARYLAND'S CONSOLIDATED PLAN, MDHCD, and Managing Maryland’s Growth Models and Guidelines for Infill Development, MDP, October 2001.

LWVTC has been an integral part of the AFFORDABLE RENTAL HOUSING COALITION beginning about 2000 (contact Barbara Heatley or Mary Ann Draught). LWVKC sits on the Workforce Housing Committee and participated in formal efforts in Chestertown 15 years ago.

To understand the problems of the Eastern Shore, as opposed to the metropolitan Maryland Counties, one should review:

http://www.ers.usda.gov/briefing/Infrastructure/ruralhousing/

Maintained by Richard Reeder

Recommended by Dr. Lynch of the University of Maryland

Affordable Housing programs for rural areas only and what the USDA does for Affordable Housing in Rural America:

http://www.rurdev.usda.gov/md/housing.htm

Caution: It is hard to compare rural counties to urban or metro counties. The numbers of more populated areas are so large that comparing to non-populated areas can be misleading. Also, the ES has a relatively large group quartered population.

Let me present what Joyce Woodford, LWVQA and I could find in response to the initial study guidelines of the Affordable Housing Committee of the LWVMD. A list of the types of tools referred to in the study guidelines:

What are current County practices concerning affordable housing?

Transfer taxes and recordation fees

i. None

Impact fees

i. QA

Other real estate exactions

i. Caroline excise tax for education

Rental registration

i. None

ii. Some movement in Easton

Regular inspection of rental units

i. Kent-Chestertown (rentals on the Lead Paint List), Millington (?)

ii. Talbot-Easton

Inclusionary zoning and MPDU legislation:

i. Being considered No MPDU legislation

ii. Caroline Planned Neighborhood Zoning (Floating)

Are there any dedicated revenue sources for affordable housing

i. QA-Affordable Workforce Voucher

ii. Talbot-Easton Housing Trust Fund (fees and donations)

What are the funding sources used for:

i. QA Mortgage Assistance

ii. Talbot Easton infill, upgrade, and maintenance in and around the historic district.

Other affordable housing policy initiatives:

i. QA refer to QA Housing Authority

ii. Cecil refer to Cecil Housing Authority

iii. Kent Chestertown acquired lots over 15 years ago to be sold for $15,000. There are 4 left.

Regulatory barriers (or opportunities) to affordable housing. Of particular interest are:

i. Zoning

1. Unincorporated dev. Limited to 1 house per 1-3 acres (For protected Farm Land—as little as 1 in 30 acres. Kent County has been referred to as the most protected land East of the Mississippi River.)

2. TDR’s-Owner’s Rights vs. Community Good

ii. Permits

1. QA Sewer Allocation Controls for the Kent Island/Grasonville Area

2. Flush Tax

3. Septic System Permits-- Development that requires the use of septic systems is of concern, but with the increased constraints on discharge of existing public sewer systems, municipalities have been hesitant to annex.

iii. Adequate public facilities ordinances

1. None (implementation costly in terms of determination and legal challenges)

iv. Regulations concerning mobile, prefab homes, accessory dwelling units [MSOffice1]

1. All counties allow mobile and prefab homes subject to their normal building parameters

2. Upgrade and maintenance of existing mobile home sites, but new mobile home placement relegated to mobile home parks. New park development restrained by development requirements.

3. Accessory dwelling units being encouraged on Eastern Shore by and large as rental units/caretaker residence/in-law apartments. Main house must be owner occupied.

v. Other?

1. Chesapeake Bay Watershed building restrictions—Critical Area

Financing tools used to expand affordable housing

i. Historic tax credits--Not applicable. Gentrification has priced these homes out of the affordable range

ii. Low income housing tax credits

1. Used to develop rental housing

2. 30 unit low working income and aged complexes in Kent County in 2001

iii. Tax increment financing (TIFS)--None was identified

iv. Other?

1. Grant opportunities through USDA

2. Priority Funding Areas KC is targeted up to $91K (106K) income and $359,798 for a house by CDA