- The Washington Times - Friday, June 29, 2007

Walk around the District’s quaint streetscape or drive through its leafy suburban neighborhoods, and you will notice an interesting fact: A lot of these federal-style town houses, charming Cape Cods and breezy bungalows are kind of on the small side.

True, the footprint of the typical American home has ballooned since those 1920s bungalows were constructed.

But there’s another reason for their relatively modest appearance. These houses weren’t built for the lawyers and lobbyists that occupy them now. Way back when, homes like these in Alexandria, the District, or some close-in suburbs housed teachers, firefighters and ordinary civil service workers.

Today, however, many city workers and federal employees have to head for the hills — literally — when it comes to finding affordable housing.

What makes a house affordable? According to the Department of Housing and Urban Development (HUD), a family should pay no more than 30 percent of its annual income on housing. Yet HUD estimates that 12 million renter and homeowner households now pay more than 50 percent of their annual incomes for housing.

According to the Housing Affordability Index prepared by the National Association of Realtors, which looks at median home payment as a percentage of median income, homes are pretty affordable, generally speaking. Nationally, the median home price is $220,500.

In the Washington metropolitan area, the average sales price in March for a detached single-family home in Arlington County was $770,503. It was $675,736 in the District, $714,042 in Fairfax County, $478,086 In Prince William County, $594,899 in Montgomery County and $368,666 in Prince George’s County.

So the housing/income equation can be a particular challenge in the greater Washington area, where the median income is $94,500 and home prices are high, particularly for teachers, firefighters and other government employees.

Loudoun County residents have the nation’s highest median household income, $98,483, but the housing costs in that county are equally high. The average price of a detached single-family home there in March was $623,530.

A recent survey commissioned by a coalition of real estate groups headed by the National Association of Housing and Redevelopment Officials (NAHRO), a housing and community development advocacy group, found that finding and maintaining affordable housing within communities is a key issue for most Americans.

The poll found that nine out of 10 Americans cited affordable housing as a high priority, and a majority — 69 percent — said that they would be more likely to vote for a presidential candidate who has a detailed plan for making the nation’s housing affordable.

“Homeownership is one of the strongest tools we have as a nation to build wealth for families,” says Saul Ramirez, chief executive officer of NAHRO. “Owning a home really is the American dream.”

You don’t have to be a millionaire to get a nice place. And you don’t have to be so crushingly poor that you qualify for low-income assistance. All you need is a little know-how, a lot of patience, and some willingness to think outside the box.

That’s what Mike Mackey did when it came to finding his new home in Alexandria. A city employee, Mr. Mackey supposed that he would have to travel fairly far afield or limit himself to a small efficiency. Instead, he found the city of Alexandria Office of Housing.

“I didn’t know what I was eligible for,” says Mr. Mackey, who currently serves as Alexandria’s gang prevention and intervention coordinator.

Mr. Mackey qualified for two Alexandria programs designed for moderate-income residents, the Employee Homeownership Incentive Program and Moderate Income Homeownership Program.

Program officials helped to facilitate what can be a fairly knotty process, particularly when Realtors and lenders are unfamiliar with various plans designed to help moderate-income home buyers.

“I was matched up with a gentleman who works for the city,” says Mr. Mackey, who now owns a three-bedroom two-level town house just minutes away from work. “He followed my case throughout and acted as liaison to provide the expertise. I contacted him numerous times, whenever I had any questions or concerns.”

Like other program participants, Mr. Mackey had to attend a 6½-hour class that provided guidance on everything from personal finances and understanding his credit report to what to expect during the buying process itself.

It was, he says, time very well spent.

“It was extremely useful,” he says. “I had done a lot of research on my own, but this really opened my eyes. There were a lot of things I didn’t know about.”

This year, 39 moderate-income households and 27 low-income households took advantage of Alexandria programs to facilitate homeownership..

“City assistance can expand the range of affordable homes,” says Shane Cochran, program implementation division chief for Alexandria’s Office of Housing, who notes that no funds have been lost to foreclosure in the last seven years.

Affordable rental units in Alexandria have also felt the pinch that resulted from the recent booming real estate market, as property owners scrambled to convert to condominiums or rent their units at market rates. Between 2000-2006, Alexandria lost more than half of its affordable units, says Helen McIlvaine, deputy director of the city of Alexandria’s Office of Housing.

“In 2005, the city took steps to preserve its rental housing stock,” she says. “We’re trying to preserve what’s already in place, enable new acquisitions and rehab existing properties.”

New legislation allows Alexandria to collect one cent of every real estate tax dollar generated to support affordable housing initiatives with private developers and nonprofit agencies.

“Since 2005, we’ve provided loans to keep several hundred units affordable over the long term,” Ms. McIlvaine says.

Alexandria is not alone when it comes to finding creative solutions to the growing lack of affordable housing. Montgomery County has one of the nation’s oldest affordable housing programs geared toward moderate-income residents. Its Moderately Priced Housing Program dates from 1974 and is considered the nation’s first plan that gives builders incentives to include affordable housing within their developments even as it requires them to do so.

The affordable homes are dubbed MPDUs, for Moderately Priced Dwelling Units, and currently make up 12.5 to 15 percent of the homes in new subdivisions of 20 houses or more.

Montgomery’s inclusionary zoning has produced nearly 12,000 affordable homes, about 7 percent of the county’s housing stock, according to information provided by the county.

Residents earning about 70 percent of the area’s median income are eligible for these MPDUs. Developers get a density bonus, meaning that they get to build more homes.

Montgomery County does not provide financing or assistance to help a household purchase an MPDU.

Households are expected to qualify for a mortgage of at least $120,000 and meet down payment and settlement requirements as well as pay monthly utility and other costs. Program participants are selected based on their ability to do all of this.

In addition, participants must not currently own or have owned a home in the past five years.

Maximum annual household income for a family of four cannot exceed $66,000, effective May 1.

Like many similar housing programs, Montgomery’s MPDU Program has some other restrictions. There is a control period during which the home cannot be resold at market rates. Buyers are expected to occupy the home. And no refinancing is allowed for more than the controlled amount established by the MPDU office.

Owners can only sell at a controlled resale price to an approved program participant. Once a home is sold after the control period has expired, the owner must pay 50 percent of the profit to Montgomery County.

Often, local jurisdictions offer their own programs.

Rockville’s Real Estate Effort for Affordable Community Housing (R.E.A.C.H.) program assists first-time home buyers with a total household annual income equal to or less than $91,500 with interest-free loans of up to $12,000 to help defray down payment or closing costs.

Buyers are required to complete a three-hour education course prior to the loan application process.

In the District, council members have co-sponsored legislation that would give residents of public housing an option to buy rental properties. The District’s senior citizens may be able to take advantage of the Senior Citizen Home Repair and Improvement Program, while District police officers can qualify for the D.C. Metropolitan Police Housing Assistance Program.

Other programs offer assistance to low-income tenants and tenant groups who are threatened with displacement because of the sale of their buildings as well as first-time home buyers.

Low- to moderate-income District residents may be eligible for the Home Purchase Assistance Program (HPAP), up to $70,000 if they are heads of households and first-time home buyers and meet income eligibility standards.

Participants must have good credit ratings, no ownership interest in any residential real estate for the previous three years, and must use the home as their primary residence.

District government employees may be eligible for the Employer Assisted Housing Program, which matches down payment funds up to $1,500 and provides deferred loans up to $10,000.

Applicants are expected to be first-time home buyers, have good credit ratings and the ability to qualify for a mortgage loan from a private lender.

Meanwhile, Fairfax County has committed to spend almost $23 million in the next fiscal year to finance affordable housing, based on the collection of one penny per dollar of the real estate tax year collected each year.

Half of this money is earmarked for families that earn no more than half the area median income.

In Fairfax, households earning up to 70 percent of the area median income are eligible for some housing assistance.

So you may not have to head for the hills just yet, unless you want to. For city employees like Mr. Mackey, life in town can be a real boon.

“I love that I can live in the city I work,” says Mr. Mackey. “It makes me feel so much more connected.”

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