- The Washington Times - Wednesday, November 3, 2004

Last summer, Chris France finally purchased a piece of the American dream, in the form of a 1951 two-bedroom fixer-upper in Laurel.

“It’s always been one of my pictures of success,” says Mr. France, 30, the transportation

coordinator for a private school in the District. “Having a decent job, a car and owning my own house.”

What he ended up with was not quite what he started out looking for. His new home was a bit farther out than he would have liked, making his commute into the District top out at well more than an hour on bad day. And the place was smaller than he wanted, with only one bathroom and a kitchen that needed a lot of work.

“Logistically, it was the closest thing I could afford in a single-family home,” says Mr. France, who had hoped to purchase something in Silver Spring or College Park.

He’s not alone. Generally, house prices are rising faster than incomes. More and more Americans are finding themselves caught up in a housing crunch that has them priced out of neighborhoods near jobs and desirable schools and forced into spending hours on the road commuting to work.

A report, “Paycheck to Paycheck: Wages and the Cost of Housing in America,” released in July by the Center for Housing Policy, the research affiliate of the National Housing Conference, says the problem is spreading beyond the familiar high-priced areas of the Northeast into the heartland.

“The housing crunch is nothing new,” says Conrad Egan, president of the National Housing Conference, a coalition of private- and public-sector housing leaders working for sustainable housing. “But it’s becoming much more a nationwide phenomenon, affecting the South and Midwest along with New York and Boston.”

Some of the largest metropolitan areas have seen prices rise by one-third since 1997, according to a 2002 report in the Economist magazine.

And not just the nation’s poor are affected. Teachers, nurses, firefighters, police officers and others in the working class bear the brunt of increased housing costs. Retail workers and those on fixed incomes are also affected.

But information from the “Paycheck to Paycheck” database, produced in conjunction with the reports, shows just how difficult finding housing is for area residents with moderate incomes (www.centerforhousingpolicy.org/p2p).

The annual income required to support the purchase of a home worth $286,000 is $89,139, according to the study. The Web site also allows viewers to check affordability in the rental market based on preselected or customized occupations.

High homeownership and low vacancy rates in the Washington area have helped to push house prices beyond the limits of many middle-income families. And it’s not just D.C. families who are feeling the pinch. Many suburban Maryland and Virginia residents are hard-pressed to find a home they can afford.

For Martha Gay, a corporate executive who recently began another career as a teacher in a private school in Fairfax County, the costs are clear.

“Our quality of life is nowhere near what it used to be when we lived in Vermont,” says Ms. Gay, who exchanged a 1790s farmhouse for a 1,300-square-foot three-bedroom apartment when a job opportunity brought her family to Fairfax.

“The teaching opportunities down here almost doubled our salaries,” Ms. Gay says, “but we realized that they should have more than tripled in order to keep up with the cost of living.”

According to the Department of Housing and Urban Development, an affordable house is one that costs less than 30 percent of income in either rent or mortgage.

In 2003’s “The Two-Income Trap,” Harvard law professor Elizabeth Warren and her daughter, Amelia Warren Tyagi, analyzed data on household spending, housing costs and bankruptcy filings over the past 25 years.

They concluded that housing costs are a primary factor in pushing families over the edge into bankruptcy. Despite rising salaries, they say, families have less discretionary income now than they did a generation ago, thanks to housing and child-care costs.

What’s the cost of paying more for housing? It comes down to quality of life. It means skimping on something else, such as health care, or redirecting retirement funds. It can mean missing out on vacations, outings and family reunions because there simply isn’t enough money after all is said and done to pay for travel.

Despite the particular challenges of life in the Washington metropolitan area, data from the area would seem to counter at least some of the authors’ concerns. Foreclosure rates in the District, Maryland and Virginia are below the national average and well below the high levels of late 2001, according to data provided by the Mortgage Bankers Association.

That’s small comfort for Ms. Gay and her husband, a retired naval officer who is also a teacher. The two had planned on buying a home after about a year, once they were able to gauge the “lay of the land,” but after months of searching for homes and working with Realtors, they concluded there were no homes in the county they were able to afford.

“We thought we could buy a fairly big town house,” Ms. Gay says, “but in South Riding, for example, the new town houses start in the low $500,000s. Hello. I’m not in that market.”

Why is the affordable-housing crunch so severe in the suburbs? To some extent, it is because of county planning, says Conrad Egan, president of the National Housing Conference.

“The trend is due in part to deliberate policies to grow more jobs than housing,” he says.

Critics of such policies see them as a recipe for sprawl — the very problem they were enacted to remedy.

Essentially, counties such as Fairfax and Montgomery want more workers than they are willing to house. Why? Residential workers mean increased costs in the form of school construction, hiring teachers, etc. More houses are viewed by many residents as visible evidence of the growth they don’t want in their neighborhoods. Residents demand that their elected officials enact policies to slow the rate of housing growth.

According to the Washington Metropolitan Council of Governments, the number of jobs in the region will increase by 550,000 in the current decade while the number of houses will rise only by 312,000.

That means that workers are forced to live farther away from their place of business, contributing to increased road congestion, pollution and suburban sprawl.

But there are forces for positive change working as well. Affordable housing doesn’t have to be what it used to be.

“Most people think affordable housing means Section 8 or the projects,” says Darrin Dorsett, senior associate at the National Association of Counties. “But that’s often not the kind of housing we’re talking about.”

Today, affordable housing can include a realm of possibilities, beyond mere buildings — assistance with down payments, tax breaks and set-asides for affordable dwellings within larger developments, and accessory dwellings or “granny flats” that can provide housing opportunities for single workers or the elderly.

“The leadership in all the jurisdictions are aware of the changing times,” Mr. Egan says. “Here in the D.C. area, we are blessed. We’ve got more tools and resources than other areas.”

Some of those tools are those available to nearly every jurisdiction, such as HUD’s Home Investment Partnership Program, Community Development Block Grants and Low Income Housing Tax Credit Program.

Others, including the Washington Area Housing Trust Fund, are collaborations between a foundation and the business and government sectors.

Housing trust funds provide crucial predevelopment money to developers to help defray start-up costs. There are already 300 such funds in the United States, 37 run by states and the rest run by counties and cities.

The Washington Area Trust Fund is capitalized by Congress and provides critical early money to help nonprofit and for-profit developers secure the deal, according to the fund’s president, Peggy Sand.

“We have already committed funds for five loans and anticipate funding two more in the coming weeks,” she says.

One successful venture is Island Walk in Reston, a 102-unit Section 8 complex that made use of funding from a variety of sources.

“We often partner with other loan funding,” Mrs. Sand says. “The cost of housing makes it imperative that there is more than one place to go.”

Inclusionary zoning ordinances also work to ensure that a certain number of homes is set aside for affordable housing. Montgomery County has one of the oldest such ordinances, dating from 1974, and over the years has created 11,210 affordable housing units — 72 percent owner-occupied.

“When developers go to Montgomery County, they know affordable housing will be part of the deal,” Mr. Dorsett says.

The Arlington County Board recently approved a mixed-use church and residential project in Clarendon that will create 70 new affordable-housing units near the Clarendon Metro station.

Of these, 64 are affordable at 60 percent of the area median income (AMI), or $52,000 for a family of four; the other six are affordable at 50 percent of AMI, or $43,500 for a family of four. The project makes use of Home Investment Partnership Program funding in conjunction with other funding sources.

Nevertheless, many area residents, including Ms. Gay, still find themselves in a bind. They are priced out of both the high-priced homes and those that are designated as affordable housing.

“We’re middle class,” Ms. Gay says. “We don’t qualify for subsidies.”

It’s a problem that area planners recognize.

“There’s still a gap for those making between 80 and 120 percent of the median income,” Mr. Egan says. “Those people are still having a hard time.”

After two years in an apartment, Ms. Gay and her family have stopped shopping for a home.

“We’ve given up,” she says. “We’ve already made ourselves crazy looking.”

As for Mr. France, he’s hoping eventually to add another bathroom, a crucial maneuver because he needs a roommate to help offset his mortgage costs.

He’s already pulled down the cabinets in the kitchen. But it’s all worth it, he says, because of that level square of land out back, perfect for his plan for laying out a G-scale railway.

“I’ve got my eye on that piece,” he says. “It’s screaming for a garden railroad.”

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