Local action puts 'affordable' in housing

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While most of the headlines about the Washington-area real estate market have something to do with skyrocketing home prices and windfall profits, another dimension of the market is also making news -- affordable housing.

Because area home prices have risen much faster than incomes, affordable housing isn't an issue for only low-income residents. Most organizations involved in affordable housing now speak of low- to moderate-income residents needing homes that are reasonably priced.

"I've been working in affordable housing for 40 years, and I have never seen a real estate market like the past five years," says Walter D. Webdale, president and CEO of AHC Inc., a nonprofit developer of low- and moderate-income housing in the Washington-Baltimore region.

A study by the Center for Housing Policy found that from 1997 to 2001, there was a 67 percent increase in the number of low- to moderate-income families in the United States who spent 50 percent or more of their income on housing.

Many who study housing affordability consider 30 percent a more viable figure for a family's housing budget.

"The 1980s were a similar market, with lots of condo conversions," Mr. Webdale says, "but today, affordable housing is totally disappearing. It seems that any property that was rental is being converted, and the market pushes the price out of our reach."

When it finds something within reach, AHC buys property and develops it into rental and for-sale housing that is affordable. A good example is the $100 million project in Arlington called the Gates of Ballston.

"We were able to save 464 units, but we had to bid against the private market," Mr. Webdale says. "Fortunately, we had unbelievable cooperation from the county, plus a variety of tax credits and other financing help."

The Gates of Ballston is under rehabilitation now, and the first units will be available next year. Seventy-five percent of the homes will be affordable units, while the remaining homes will be available at market rate.

Because the Washington region has grown so quickly -- faster than the housing supply -- the need for new, affordable housing becomes even more apparent.