- The Washington Times - Friday, May 22, 2009

As home prices climbed higher each month during the peak of the housing boom, local governments increased their efforts to find work-force housing for employees. Although home prices have fallen in most of the Washington area, there still isn’t enough moderately priced housing near the workplace for government employees and first responders such as teachers, firefighters, policemen and emergency personnel.

Maryann Dillon, director of real estate development for the Housing Opportunities Commission of Montgomery County, says “work-force housing” became a buzz phrase a few years ago because of the housing boom’s impact on affordability.

“The issue may have temporarily faded a bit in some areas of the country, but in the D.C. area there is still a lot of concern about affordable housing and trying to fix the work/home balance,” says Ms. Dillon. “The main goal is to get employees living near their work.”

The Urban Land Institute’s (ULI) Terwilliger Center for Workforce Housing says that Fairfax County recently was named by the Census Bureau as the nation’s most affluent county. According to ULI, the median new-home price in the county is $960,000, and the average monthly rent for a two-bedroom apartment is $1,306.

Consider as an example a Fairfax County public school teacher with a master’s degree and five years experience who earns an annual income of $58,649. Unfortunately, that teacher isn’t likely to buy a home in the county since his or her income is too high for affordable-housing programs and too low for market-rate housing.

State and local programs are in place that can provide down-payment and closing-cost assistance for government employees and for others whose employers participate in public-private partnerships to encourage homeownership. Additionally, programs offer low-interest mortgage loans and encourage the development of affordable housing designed specifically to allow first responders, health care workers and teachers to live near their workplace.

Michele Watson, director of homeownership programs for the Virginia Housing Development Authority (VHDA), says her agency allocates funds to local government, nonprofit and for-profit organizations on a competitive basis based on what they will do to create and preserve affordable housing.

“We try to make sure that we funnel our funds to the segment of the population with the greatest need,” says Ms. Watson. “After Sept. 11, there was considerable concern about the fact that policemen, emergency medical technicians, firefighters and others who provide critical services were living far away from where they were assigned to work. This is still an issue today since housing continues to be expensive.”

Montgomery County held a ribbon-cutting ceremony last fall at the Village at King Farm, a transit-oriented smart-growth community where low-cost condominiums are being offered for sale to Rockville city and Montgomery County employees.

“Jerry Weast, Montgomery County’s superintendent of schools, told us at the ceremony that he provides daily shuttle-bus service to West Virginia to bring teachers to school each day since they cannot afford to live in Montgomery County,” Ms. Dillon says. “That’s just one example of what we are facing.”

Doug Myrick, homeowner-ship program coordinator for Arlington County, says his county’s Workforce Housing Initiative, a public/private partnership, provides a mix of services such as special mortgage products, homeownership education, financial literacy training and discounts on properties built by participating developers.

“We recognize that having safe, affordable and convenient housing increases productivity,” says Mr. Myrick. “It also helps reduce the carbon footprint by having people live close to where they work. Arlington County has excellent public transportation. If people have to drive, at least they don’t have to drive as far.”

Arlington County’s Workforce Housing Initiative includes seven employers with a combined work force of over 11,000 people, including county government employees, teachers and hospital employees. Both first-time homebuyers and repeat buyers are eligible for up to $1,700 in rebates from real estate agents, lenders and title companies at settlement. Additional benefits include access to discounted properties, homeownership and financial literacy classes, and to special mortgage programs through VHDA and Freddie Mac.

The governments of Prince George’s, Anne Arundel, Montgomery, Frederick, Charles and St. Mary’s counties and nearly 100 other employers participate in the Maryland “House Keys 4 Employees” program.

This program allows eligible homebuyers using a Maryland Mortgage Program loan to receive extra down payment and closing cost assistance.

The Maryland Department of Housing and Community Development will match contributions from employers up to $5,000 for down-payment and closing-cost assistance in the form of a deferred zero-percent loan that is repayable when the loan is refinanced or paid off or the house is sold or transferred.

Additional matching funds (up to $10,000) are available through the “Smart Keys 4 Employees,” provided that the residence is within a priority funding area and within 10 miles of the borrower’s place of employment or within the boundaries of the local county.

Government employees in Montgomery County and the city of Rockville may qualify to buy a two- or three-bedroom condominium at the Village at King Farm in Rockville, where the Housing Opportunities Commission of Montgomery County and the Montgomery County government have converted a former apartment complex into condominiums.

Each two-level home will have 1,200 to 1,600 square feet with features such as reserved parking, hardwood floors and high-end kitchens with granite counters and stainless steel appliances.

“This is the first county program to develop housing following the guidelines of Montgomery County’s work-force housing initiatives,” says Ms. Dillon. “Not only is it affordable for government employees, but this development follows smart-growth principles. We envision people being able to walk to the fitness center, swimming pools, playgrounds and parks, along with shops and restaurants. There’s also a shuttle to a Metro station.”

Fairfax County, like most other local governments, has programs that assist first-time homebuyers, whether they are government employees or not. The county recently introduced a “Silver Lining” program, which assists first-time homebuyers in the purchase of foreclosures.

“The program was first marketed to county employees, including public school employees and other government employees who have not owned a home within the past three years,” says Kristina Norvell, director of public affairs for the Fairfax County Department of Housing and Community Development. “Now the program has been opened up to other buyers, too. So far, we have 38 households who have purchased a foreclosed home in the county. We have another 51 households out looking at properties now and one contract pending approval.”

The Silver Lining program has income limitations according to family size and is limited to homes under $362,790 for a single-family home and $270,000 for a town home. Condominiums are not included in the program. Buyers must contribute 1 percent of the sales price for down payment and closing cost assistance.

The Silver Lining loan is a second mortgage of up to $91,767, which has a 30-year term with zero interest and no payments. If borrowers sell or refinance before 30 years, they will be required to repay the loan and split the equity with the county government.

In the District, the Department of Housing and Community Development has two homebuyer assistance programs.

The Employer Assisted Housing Program is geared to encourage D.C. government employees to live within the city limits. D.C. government employees and personnel at all agencies, the Metropolitan Police Department, D.C. public schools and D.C. public charter schools are eligible for matching down payment funds of up to $1,500 and a deferred loan of up to $10,000 if they are first-time homebuyers.

Buyers also can take advantage of the Home Purchase Assistance Program, which is open to all first-time homebuyers who meet low-to-moderate income standards.

“The best place for people to start looking for homebuyer assistance is their employer and their local government because they have the information about local loan programs,” says Ms. Watson. “Typically, these programs will then send the potential buyers to two or three lenders who participate in the homebuyer assistance programs to see how much they can afford to spend and how much help they can qualify for.”

Homebuyer education classes are mandatory for all recipients of funding from VHDA and most other programs, since the intention is to help families become responsible homeowners who can afford their loans.

“The housing downturn has been terrible for so many families, but it is a double-edged sword, allowing some other families to become homeowners now that homes have become more affordable,” says Ms. Watson. “But the biggest obstacle to homeownership is still the down payment, so this is where employers and local and state governments are able to step in and fill the gap.”

Ms. Dillon points out that work-force housing issues do not fit the usual definition of affordable housing programs.

“Usually affordable housing programs are geared to people who earn less than 80 percent of the median income in their area,” says Ms. Dillon. “Work-force housing is usually geared to people who make 70 to 120 percent of the median income. This creates some controversy among policymakers because when there are scarce budgetary resources, it can be difficult to decide if the government should help the most vulnerable among us or working people with moderate incomes. State and local governments struggle with this issue every day.”

Web sites with work-force housing information:

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www.mmprogram.org

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www.thevillageatkingfarm.com

www.hocmc.org

https://www.montgomerycountymd.gov/apps/dhca/index.asp

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www.dhcd.dc.gov

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www.vhda.com

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https://www.arlingtonva.us/departments/cphd/housing/initiative/cphdhousinghousing_initiativemain.aspx

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www.fairfaxcounty.gov/rha/homeownership


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