Arlington’s current housing program is wasteful, expensive and inefficient

Democratic County Board members praise “Arlington’s innovative private-public partnership” in which the county supplies funds to private organizations, some of which are “non-profit” and some of which are for-profit.  In fact, an examination of this “innovative partnership” finds  that the private organizations and developers receive most of the benefits while the public pays the tab and renters receive very little for the large sums of money spent.

 

The Arlington Department of Community Planning, Housing and Development employed 90 employees at a cost of $8.4 million in salaries in fy2009.  The county staff may produce 400 CAF (committed affordable units) in that year at a cost of $21,000 in staff salary per unit.

 

 

In addition, the county sends millions of federal dollars and local dollars directly to the housing providers, the largest of which is AHC, Inc.  In FY2005, AHC received $1.6 million  in direct public support (most of this through Arlington County Government). 

 

AHC paid its president a salary of $202,143 in fy2005, another director $153,000; and its senior employee $190,000, according to public data from the U.S. IRS.  In essence, AHC acts as Arlington’s housing authority and its top executive is paid over  $200,000.  AHC’s gross income was $8.4 million; and in addition made a profit of over $1 million in 2005, all of which it retained.  How does a “nonprofit” make a million dollar profit?

 

 

The Fairfax County Housing Authority is run by a largely volunteer citizen board of directors who are paid no more  than $300 in compensation annually as set out in Virginia law.  The president (or chairman) of the Fairfax Housing Authority thus earned $300 a year for  running Fairfax’s housing operations.  The Fairfax Housing Authority grossed an income of about $20 million in 2007.

 

Is Arlington merely subsidizing the life style of “nonprofit” employees who make $200,000 incomes while Fairfax relies upon voluntary citizens paid $300 a year to operate a program three times larger than AHC?

 

Arlington spends far more than necessary on affordable apartments.  The two most recent large projects of preserving affordable apartment units occurred in Buckingham and in the Arlington Mill project on Columbia Pike.  At Buckingham, the county will spend a projected  $51 million to keep 140 units or a cost of $364,000 per apartment (many of which are one-bedroom  units).  At the Arlington Mill project, the county will spend $26 million to create 61 new units at a cost of $426,000 each.

Two years ago, the county board could have designated  the three Buckingham Villages as historic property (as is all of the rest of the entire 1,700 Buckingham apartments), and could have purchased roughly 460 units for its assessed tax value of about $44 million. 

 

The county would have owned the land–over 20 acres–outright–including the open space and trees.  These 560 apartments would have cost less than $100,000 each.  More importnatly, the land would have been public land keep as a land trust for open space or if needed, for future schools or recreational areas.

How can the county spend $400,000 for an apartment and succeed in keeping these as affordable without enormus rent subsidies?  Moreover, there are entire apartment complexes that could be bought at prices far less than these.

 

At these inflated capital costs, it is no wonder  why Arlington has been unable to stem the loss of 1,700 affordable market  rate units each year and has been unable to meet even the rather modest goal of adding 400 new CAF units annually.

 

The Arlington public-private partnership for affordable housing  is yet another example of lemon socialism–profits for private companies, and large government outlays for little if any housing units.

 

High salaries and profits for developers and the bill for taxpayers with Arlington tenants getting very little  if anything of value.

 

 

Favola record on “aggressive affordable housing policies” shows a dismal result

Despite the County Board’s goals set in the 1990s—no net loss of existing affordable units and the addition of 400 new committed affordable units (CAFs) each year—the number of affordable rental units in Arlington fell by about 13,000 between 2000 and 2008, from 20,000 in 2000 to 10,000 in 2004, and to fewer than 7,000 in 2007 and 2008, a 1,600 loss annually. Ms. Favola became a Board member in 1997.

In 2006-07, the County Board refused to save all 560 apartments in Buckingham Villages 1-3 along with its trees and greenspace.  The Buckingham Apartments were in great condition and housed over 1,500 people. 

 

About two-thirds of the 560 apartments were or will shortly be razed, and luxury townhouses and condominiums built in their place.  However, many of the luxury townhouses are still unsold and empty and the developer (as of September 2008) has halted construction of the luxury townhouses:

 

 

 

During the past four years, the county reached only 74 percent of its goal of adding  400 CAF units annually. During fy 2004 to 2007, the county added an average 298 CAFs annually (139 CAFs in 2004, 284 in 2005, 295 in 2006, and 472 CAFs in 2007).  Moreover in2007, 185 existing CAFs were re-counted as CAFs, so the net increase in the actual supply of CAFs was 287. Then about 240 of these 287 units were existing Buckingham Apartments already modest cost market rentals.

Using their own goal of 400 CAFs,  a teacher would give a “grade of 74%” to  Ms. Favola and her Democratic Board colleagues, probably a “C-” or a  D.    But when one considers the loss of 1,600 market rate apartments annually during the past  8 years that clearly did not meet the Board’s own goal, the grade must be further lowered to an “F.”

 

At the September 2  debate before the Arlington Civic Federation, Ms. Favola claimed that, “Arlington has created more affordable units per 1,000 people than any other jurisdiction (in the Washington area).” (Source: David Schultz, “Reeder Criticizes Favola’s Priorities,” Arlington Connection, Sept. 9, 2008).  This assertion is unsupported by data.

Neighoring jurisdictions have done as much or more than Arlington. The District of Columbia built or rehabilitated 2,000 affordable units in fy2008, according to the DC Department of Housing and Community Development director Victor Selman (testimony before the DC City Council, April 20, 2007).  With a population of 582,000, this amounts to 343 units per 100,000.  Arlington financed 472 units in fy2007 with a population of 208,000 or a ratio of 230 units per 100,000.

During the 4 years of 2004-07, Arlington averged 298 units annually, a ratio of 146 units per 100,000 population.  Fairfax County Public Housing authority in fy 2007 financed 1,412 units or about 141 units per 100,000 population (Source: Fairfax County Housing Authority, “Fund 319 The Penny for Affordable Housing Fund,” FY2009 Advertised Budget Plan (Vol. 2)-685.).  Thus, Arlington and Fairfax are currently about even in effort per 100,000 population even though Arlington has a much greater need for multi-family housing (two-thirds of Arlingtonians live in apartments).

From 2004 to 2007, the number of homeless people in Arlington (counted each January) rose 13 percent from 408 to 462; 42 percent of the homeless in January 2007 were living out in the open in Arlington (“unsheltered” according to government terminology). In December 2007, the Arlington County government cut all funding for ASPAN, the Arlington nonprofit organization then operating the county’s winter homeless shelter. This action was taken after its director complained about the dilapidated, unsafe and overcrowded conditions of this county-owned building slated to be demolished. Favola promised in February 2008 that the county would replace the aging structure for the homeless, “down the line” (Sun Gazette, Feb. 5, 2008). But no new shelter has been built.

 

The affordable housing crisis is particularly acute for mentally ill and disabled Arlingtonians. There are only 42 affordable apartments county-wide that are dedicated for this population, and several hundred people are languishing on a waiting list. In 2006, County Board members, including Ms. Favola, failed to restore $6 million in funds that were slated to establish group homes for 400 mentally and physically impaired individuals.

 

Is this best we can do in Arlington? I believe we can do better. And I support the housing authority referendum in November because it will enable the county to establish a permanent affordable housing stock (rather than sinking millions of dollars into units that are “affordable” only on a temporary basis). A housing authority, overseen by citizen volunteers, would to improve transparency and encourage a more efficient use of limited housing dollars.