Housing Study (presented at the May Meeting by Bill Knoeller, Jane Aldridge, and Grace Horton. Presented in October 2003 to the Board of County Commissioners.)    Update from March 2004
 

   If you live in the U.S., you've been seeing headlines like these for quite a while now. We've seen them in St. Mary's County, too. While the lack of ffordable housing is a national problem, the solutions have been mostly left to local jurisdictions.  For over a year, the St. Mary's LWV's Housing Study Committee (Bill Knoeller, Grace Horton, and Jane Aldridge) has been evaluating the availability of affordable and low-income housing in St. Mary's County.

THE HISTORY
    In 2001, the Board of County Commissioners appointed a Fair and Affordable Housing Committee to study and report on existing conditions. That committee submitted a report early in 2002, making a number of recommendations on affordable housing in general, as well as addressing the special issues of the Lexington Manor Task Force.
    The Fair and Affordable Housing Committee also recommended that a housing needs assessment be done to confirm whether or not there was a real need in the county for more affordable and low income housing. The Board of County Commissioners contracted with the Danter Company to do a study on housing. Some of the Danter Company's findings are summarized in this report.
 
THE LINGO

• Affordable housing: housing that costs no more than 30% of the occupants' income. A corollary is "rent overburdened," rent that costs more than 30% of the occupants' income.
• Housing trust fund: a sum of money set aside from fees, taxes or donations so that it can be used to support the cost of acquiring, developing, or rehabilitating housing that is reserved for low-income and moderate-income occupants.
• Community land trust: publicly- or privately-owned land or buildings donated to a private, non-profit cor-poration for the construction of housing for lower-income occupants (either renting or buying).
• Voluntary inclusionary zoning: zoning regulations that contain incentives for developers to include low/moderately priced housing in a development; e.g., if a developer reserves 20% of the units for moderate-income occupants, then greater density is permitted in the subdivision.
• Mandatory inclusionary zoning: zoning regulations that mandate a specific minimum percentage of units in all developments above a minimum size be afford-able to low- and/or moderate-income occupants. This zoning led to Montgomery County's nationally acclaimed mixed-income subdivisions.
• Linkage program: employers who have a large, modestly-paid workforce (such as WalMart or Lowes) pay into a housing trust fund to assist housing providers to develop and maintain low-income housing, or em-ployers provide the housing themselves.

 
THE PROBLEMS

Problem 1:
    The population of St. Mary's is growing; the amount of land in St. Mary's is not. In 2000, the population of St. Mary's County was 86,211. It is projected to reach 94,040 by 2006, and by April 2003 it had already reached 90,000. (Several hundred new jobs are expected in the near future at the Patuxent River Naval Air Station.) The cost of land is the principal limiting factor in building both rental and ownership housing.

Problem 2:
    The Danter study states that "current development trends in the county are not affordable for a significant portion of the population." Over 3/4 of the jobs in St. Mary's County do not pay enough for people to afford housing, either renting or buying.  The median income in St. Mary's County in 2001 was $72,500 for a family of four. There were 33,338 positions in the work force. Of these 26,199 (78%) were near/below 50% median income ($36,250). The two largest employment categories were professional/scientific at 28.1% and retail at 16.4%. Other categories were construction, local government, services, etc. Thus, there is a considerable housing affordability gap between the higher income category (probably mostly Pax River engineers/technicians, upper management, administrators, etc.) and the lower income category (probably mostly retail, police, fire, and teachers).
    In St. Mary's County, 28% of households are rent overburdened, mostly those having incomes between $10,000 and $35,000 per year. Since affordable housing is defined as 30% of income, this means that a single wage earner household with a $36,250 median income could afford only about $900 per month for housing. Average rent for a two-bedroom apartment is about $1,000 per month. Thus, the $36,250 median income worker can quickly become rent overburdened, and home ownership is out of the question.

Problem 3:
     The rental housing we have now is inadequate, both in quantity and in quality.  Over 60% of the rental units were built before 1990. In comparison with other parts of the country, the quality of housing in St. Mary's County is not only lower, but it is also priced above the rental level typical of higher-quality housing. The housing rental market is already nearly saturated with only a 1% or less vacancy rate. The Danter Report says there is "an urgent need for modern rental housing and affordable ownership housing (priced below $150,000) including single family homes, manufactured housing and condominium development."
 
THE SOLUTIONS
Who's in Charge 
    In St. Mary's County, the Housing Authority is advised by a Board of Housing Authority Commissioners (recently enlarged from 5 to 7 mem-bers) who are appointed by the Board of County Commissioners. The Housing Authority administers rental assistance and home ownership programs for low- and moderate-income citizens. The Housing Authority also manages public housing projects, and works to stimulate the development of sufficient market-rate housing.
Rental Assistance Programs in place now 
    The Housing Authority has opted to seek out rental assistance programs for low-income residents rather than building housing. It does own Patuxent Woods (a rental project) and a few scattered rentals in the county, as well as Holland Forrest Landing, an ownership community. Rental assistance may be in the form of subsidies to a developer of housing for lower income persons such as tax credit to the developer or tax abate-ment. It may be a subsidy to the individual renter under a voucher system or funds from governmental agencies to offer rentals for 30% of the renter's income.
    Money for rental assistance programs comes from the state and federal government. In 2001 more than one thousand households in St. Mary's County used this rental assistance, and 404 landlords were willing to accept housing vouchers. These funds are targeted to specific persons:
•    those with disabilities;
•    families whose children are separated from the family because of the lack of adequate housing;
•    working families transitioning to economic independence;
•    the elderly;
•    families from condemned properties.
    Plans for the future from the Fair and Affordable Housing Committee  Among the many documents the Fair and Affordable Housing Committee examined was the Cohen Report, a study of housing livability and affordability in St. Mary's County with analysis and recommendations, prepared by the Maryland Community Partnership at the University of Maryland.

    The report identifies two critical factors in the development of affordable housing: land acquisition costs and infrastructure (roads, water, and sewer).
     Both of these factors may be addressed by establishing community trusts: a community land trust (land donated by individuals or companies and then used for affordable housing sites) and a housing trust fund (created from business license fees, real estate transfer fees, property taxes, or "linkage fees"). The housing trust fund can support private sector builders, a housing authority, non-profit organizations, or a combination of entities to the reduce the cost of acquiring, developing, or rehabilitating housing for low and/or moderate income families.

Click HERE for a report on the position taken by LWV of St. Mary's on Affordable Housing.

Source material:
The Washington Post
The Enterprise
"St. Mary's County Housing Needs Assessment" by the Danter Company
"Housing Livability and Affordability Issues in St. Mary's County: Analysis and Recommendations" by James R. Cohen
Interview with Dennis Nicholson, Director, St. Mary's County Housing Authority
Information from John Savich, Director, St. Mary's County Department of Economic and Community Development

FOLLOW-UP ON AFFORDABLE HOUSING March 2004
    You may recall that one of the recommendations of our Affordable Housing Study that we submitted to the Board of County Commissioners (BOCC) last year was “financial incentives such as reduced impact fees or reduced inspection fees for developers who build low income/affordable housing or include a percentage of such housing in a new development.”
    Late in 2003 the BOCC asked our State delegation to propose legislation that would enable it to adjust the above-mentioned fees when appropriate. The League and some individual members wrote letters to Senator Dyson, Delegates Wood, Bohannon and O’Donnell asking them to support the request. The response was lukewarm—but eventually, House Bill 1304 was produced. 
    A synopsis is:

Authorizing the County Commissioners of St. Mary's County to waive, defer, or provide for the amortization of building impact fees under specified circumstances; limiting to $350,000 the total amount of building impact fees the county may waive, defer, or amortize in any fiscal year; and providing for the termination of the Act.

    The bill passed in 2004.

ARTICLES
"Open Space Funds to Aid in Effort to Demolish 'Flattops' Housing" (The Washington Post, 13 Nov 2003)