Duncan Announces New Housing Policy: Nationally Recognized for Innovation, County Sets Even More Aggressive Goals

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Contact: Esther Bowring, 240-777-6530
Elizabeth Davison, 240-777-3600

For Immediate Release: January 8, 2001

Duncan Announces New Housing Policy:
Nationally Recognized for Innovation,
County Sets Even More Aggressive Goals

Montgomery County Executive Douglas M. Duncan today presented a new housing policy that sets aggressive affordable housing production targets in order to provide decent and affordable homes for all county residents. The new housing policy strengthens the county's long-standing commitment to providing housing choices and opportunities for its citizens.

"Montgomery County is nationally known for its innovative and progressive housing programs, and I am proud of our tradition of fairness and goodwill in promoting and maintaining livable housing and quality communities," said Duncan. "In my December 2000 State of the County address, I expressed my desire to make sure all of our citizens have equal access to sound and affordable housing. Our new housing policy reflects my priorities, especially for helping those not now adequately served by the housing market."

The new housing policy will better address the county's current needs as a result of changing population demographics and economic conditions. Montgomery County's high housing costs make it difficult for the 25 percent of county households earning less than $40,000 to find decent housing.

Meeting affordable housing needs will require creation of an estimated 1,000 to 1,200 new housing units a year, in addition to preserving the county's existing housing stock.

"Every day, Action in Montgomery (AIM) congregation members experience and see the critical need for affordable and moderately priced housing in Montgomery County," said Tom Cowley, member of St. Rose of Lima Catholic Church and AIM member. "We support Duncan's proposed housing policy. In June, Duncan committed to AIM to put $15 million into the housing initiative fund. We see this housing policy as further commitment and leadership in this area and we strongly commend him for it."

Trends that have prompted reconsideration of the county's housing programs include changing development patterns. The creation of large, new suburbs is being replaced with smaller scale infill development and redevelopment of older communities. The county's population has become more racially, ethnically and economically diverse. Demand is increasing for independent and assisted living senior housing, as well as for housing to help people transition from homelessness. As housing in the county ages, the focus will shift to maintenance, preservation, and revitalization.

The policy outlines seven major objectives. They include promoting variety and choice in housing; assisting persons with diverse housing needs; providing safe, high quality neighborhoods; encouraging an adequate supply of affordable housing; providing housing for all life stages; promoting equal housing opportunities; and encouraging sustainable communities.

This week, Duncan will transmit the housing policy to the County Council for their review and adoption.

For more information, call the County's Department of Housing and Community Affairs at 240-777-3600.

Housing Policy Executive Summary
"MONTGOMERY COUNTY: THE PLACE TO CALL HOME"

VISION

A safe, decent and affordable home is the cornerstone for a full, normal life. A neighborhood is the basic unit of community in which a family can grow and flourish. The vision for Montgomery County is for all of its residents to have decent housing in sound neighborhoods.

In our vision for Montgomery County, we see:

No one is homeless. Everyone has a place to call home.

All housing in sound condition, meeting all building maintenance codes.

Adequate living space within each housing unit for all occupants.

Affordable housing for all who live or work in the county, regardless of age or position.

Appropriate housing and services for each stage of ones life so that we can remain in the community as we grow older.

No discrimination in choosing where we live regardless of our race, national origin, sexual orientation, religion or disability.

Housing opportunities and supportive services for those of us who have mobility or sensory impairment, developmental or emotional disabilities, or mental illness.

Safe and sound neighborhoods with community services and well maintained facilities.

We will work to achieve this vision with:

The commitment of citizens, community leaders, housing providers, and public employees.

Funding and appropriate planning to one day make this vision a reality.

PURPOSE

The purpose of this Housing Policy is to guide the implementation of the County's housing programs and policies, provide recommendations for improving them, and direct the allocation of resources.

CONDITIONS

As a result of shifting demographic and economic conditions in the region, housing supply and demand have changed significantly since adoption of the last Housing Policy in 1981. High interest rates were then the main problem affecting affordability. Today we have:

§ Low production of multifamily housing has brought extremely low rental vacancy rates and caused rent increases to reach historic highs
§ Residential housing production, especially of units for individuals and households below the median income, has not kept pace with recent increases in demand.
§ Many of our neighborhoods are 50+ years old and need reinvestment and stabilization.
§ As the county nears build-out, most new development opportunities will be for infill development and redevelopment of older and obsolete communities and structures.
§ The county is becoming more racially, ethnically, and economically diverse as our economy and metropolitan area diversifies and becomes more international
§ Demand is increasing for independent- and assisted- living senior housing as our population ages.
§ Demand is increasing for housing for individuals and families transitioning from homelessness as federal programs expire.
§ The affordable assisted housing stock is under intense pressure.

OUR OBJECTIVES

This Housing Policy has 7 main objectives for accomplishing our vision. They are:

1. VARIETY AND CHOICE IN HOUSING
Promote variety and choice in housing of quality design and durable construction in various types of new and existing neighborhoods in conformance with the County's General Plan.

2. ASSISTING PERSONS WITH DIVERSE HOUSING NEEDS
Encourage housing for diverse residential needs, including housing for the elderly, for persons with disabilities, persons with mental illness, and persons transitioning from homelessness.

3. SAFE, HIGH QUALITY NEIGHBORHOODS
Maintain and enhance the quality and safety of housing and neighborhoods.

4. COMMUNITIES WITH AFFORDABLE HOUSING
Encourage an adequate supply of affordable housing in economically inclusive communities throughout the county for those living or working in Montgomery County, especially for households at the median income and below.

5. HOUSING FOR ALL STAGES OF LIFE
Provide a sufficient housing supply to serve the county's existing and planned employment and the changing needs of its residents at various stages of life.

6. EQUAL HOUSING OPPORTUNITY
Promote and enforce fair housing ordinances to ensure that all residents have an equal opportunity to purchase, rent, finance, and occupy housing in the county.

7. SUSTAINABLE COMMUNITIES
Encourage sustainable development and environmental sensitivity in housing, neighborhood design, and redevelopment.

TOOLS

To accomplish our objectives, we have used several techniques. They are:

Mandatory Inclusionary Zoning -- the Moderately Priced Dwelling Unit program

Preservation of agricultural land and open space through the Transfer of Development Rights program

Revenue bond authority for the Housing Opportunities Commission.

A locally funded housing trust fund, the Montgomery Housing Initiative

Scattered site public housing

Mixed-income housing

Concentrated code enforcement in older communities

Single family and multifamily rehabilitation loan programs

Replacement homes for owner occupants of condemned properties

Personal Living Quarters, a pilot program for single room occupancy style housing

Conversion of hotels to efficiency apartment facilities (single room occupancy)

Accessory apartments

Fair Housing, education, testing, research, and enforcement programs

Group Home Loan program

Adaptive reuse of surplus public schools and surplus school sites

Right-of-first-refusal to purchase multifamily housing in the county

Rental agreements to preserve the affordability of multifamily housing being transferred

Condominium transfer tax

Downpayment Assistance Program

County-funded Rental Assistance Program

FINE TUNING

As part of the Housing Policy effort, we identified how existing programs could be improved. These housing programs were evaluated:

Housing Initiative Fund/Home Funds

Moderately Priced Dwelling Unit Program

Group Home Program

Rental Assistance Program

Code Enforcement Programs: Vacant and Condemned Housing and Neighborhoods Alive!

ANNUAL AFFORDABLE HOUSING PRODUCTION GOALS

The current income distribution of households in the county shows that about 25 percent of county households earn less than $40,000. To continue to serve these households, we believe that an affordable housing production goal of 1,000 to 1,200 units per year is necessary as well as preservation of the existing affordable housing stock. The following chart lists the County's affordable housing production programs and establishes an annual production goal for each program based on market conditions, program history, forecast needs, and industry and provider capacity.

Comparing these production targets with averages achieved in each category over the past two years, we see a dramatic increase in affordable housing units. These goals are aggressive, but they can be achieved with the funding and organizational focus we propose.

Affordable Housing Program: Proposed Annual Production Targets
(Averages for the last two fiscal years, FY99 and FY00, are shown in parentheses)

Programs:

Moderately Priced Dwelling Units

200 owner units
(149)

100 rental units
(83)

$0 Total Cost (County $)
($0)

Section 8 Certificates/Housing Vouchers

200 rental units
(190)

$0 Total Cost (County $)
($0)

Group Home/Transitional/Special Needs Housing Production

100 rental units
(29)

$500,000-$1,000,000 Total Cost (County $)
($145,000)

Recycled Single Family Home Ownership
(HUD foreclosed houses)

30* Owner Units
(11*)

$600,000 Total Cost (County $)
($296,000)

Non-Profit Multifamily Rehabilitation

150* rental units
(55*)

$1,500,000-$2,250,000 Total Cost (County $)
($543,000)

Housing Opportunities Commission and Non-Profit New Construction

200 rental units
(0)

$800,000-$2,000,000 Total Cost (County $)
($0)

Preservation of Federally Assisted Housing

200* rental units
(121*)

$1,600,000-$2,400,000 Total Cost (County $)
($780,000)

HOC and Non-Profit MPDU Acquisition

60 rental units
(29)

$1,800,000 Total Cost (County $)
($870,000)

Multifamily Rehabilitation Loans

150* rental units
(5*)

$750,000-$1,500,000 Total Cost (County $)
($108,000)

Construction of Elderly Housing and Assisted Living Units

250 rental units
(18)

$3,750,000-$5,750,000 Total Cost (County $)
($683,000)

Accessory Apartments

50 rental units
(15)

$0 Total Cost (County $)
($0)

Preservation of Threatened Multifamily Housing

950* rental units
(950*)

$0 Total Cost (County $)
($0)

Acquisition of Threatened Multifamily Housing

150* rental units
(24*)

$0-$1,500,000 Total Cost (County $)
($516,000)

HOC Public Housing Rehabilitation

100* rental units
(40*)

$700,000-1,500,000 Total Cost (County $)
($290,000)

Totals:
New units ........ 1,160 (513)
Preserved units.... 1,730 (1,206)
Total units........ 2,890 (1,719)

Cost to County:
$12-$20,300,000
($4,231,000)

*Units preserved, not added to the housing stock.
** Loan

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