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September 29, 2013

Arlington trade association offers half truths and distortions on housing authority

Affordable Housing — @ 5:08 pm

The Alliance for Housing Solutions (AHS), Inc. is a trade association composed of housing contractors, banks, and commercial builders, and Democratic Party cronies to the County Board. AHS recently issued a broadside attack against the Arlington Housing Authority referendum. This is not a surprise since this group relies on Arlington County housing progam dollars to support the lavish executives salaries and profits, and an authority would more carefully spend public dollars on housing assistance and would cut their profits, high salaraies, crony status and waste. http://www.allianceforhousingsolutions.org/save-dates-2/

We answer their allegations and half truths, and often totally bogus statements below:

AHS says, A Housing Authority would bring no new resources….
As we have elaborated before, an Arlington housing authority would enjoy Virginia and U.S. housing benefits not available to Arlington today, among them guaranteed access to Federal tax credits, access to HUD credit guarantees on housing bonds issued, and access to some of the over $2 billion given out to U.S. public housing authorities by HUD.

AHS says, Arlington County has created more affordable housing units per 1,000 people than any other county in Northing Virginia….Arlington County has built or preserved about 300 affordable apartments each year over the past decade, mostly for higher income people making above $60,000 annually, but meanwhile private market and developers destroyed about 1,000 affordable apartments annually, meaning a net loss of over 700 affordable apartments each year since 2000. If Arlington does nothing different, all private market affordable apartments are gone in a few years. Yes, Arlington County is spending money, but ineffectively and not enough to even stop the loss.

AHS says HUD has provided no new funds or funding for new housing authorities since 1994.
This is totally wrong. According to an article in the Arlington Mercury Newspaper in March 2013, HUD indicated that a housing authority would be eligible for some of the funds from the HUD Capital Fund that last year gave out $2.41 billion public housing authorities. http://arlingtonmercury.org/countywide/elections-2013/hud-funds-for-housing-are-available%2C-but-worth-it%3F/

There is no evidence that a housing authority can do better in private financing than the county’s existing private affordable housing developers.
This is bogus on many accounts. There are a half dozen or more private housing developers in Arlington, all with their own financial staff and costs attempting to issue bonds and get financing. A single county agency can do this for much less in total costs. Moreover, according to the Fairfax County Housing Authority, it is able to issue housing bonds at a lower cost in both underwriting costs and bond rates than private bond issuers. Fairfax Housing Authority receives a credit repayment guarantee from HUD that lowers the interest rate it pays on its bonds issued to finance housing projects in Fairfax County. Most private housing providers operating now in Arlington also operate in Fairfax County and operate under the Fairfax Housing Authority funding and direction.

AHS says A housing authority would need a staff.The Fairfax Housing Authority has NO staff of its own, relying on existing Fairfax Planning, Housing and Human Services staff. The Housing authority board members are volunteer citizens who serve without salary. Arlington County already employees abundant and competent housing staff to handle the housing functions, no need to hire more immediately, and in fact our current staff would work better together working as a team. As importantly, Arlington County already pays for a bloated and overpaid private employees working at cross purposes in many of these private housing developers; we could cut these wasteful expenditures and reduce staff costs of both public and private contractors, saving public funds.
AHS says A housing authority would lessen competition (for housing development funds).
Actually the opposite has occurred in Fairfax County: the Fairfax County Housing Authority builds new affordable apartments at about half the cost of Arlington units (even in cases where the land is free). Fairfax Housing Authority forces the housing developers to compete strongly to keep the costs of affordable units low. Arlington housing developers today are crony contractors who cannot deliver quality at a low price, frequently overcharge rents or provide lousy conditions to their tenants. An authority will cut government costs per unit. This waste includes the lavish salaries these housing contractors receive: the largest housing developer in Arlington pays its chief executive over $250,000, a salary higher than the county manager or the school superintendent!

AHS says Arlington commits more local resources per capita to affordable housing programs than either Fairfax or Alexandria and produced more committed affordable units per person than either jurisdiction.Yes, Arlington County spends more funds than Fairfax or Alexandria, but that is because Arlington has virtually no private market rate affordable housing left. According to the Virginia Tech Center for Housing Research, Arlington has the second most expensive rental housing in the Metro DC area and about one-seventh of Arlington households (14,000) need affordable rental housing because their high rents cause them to be “housing cost burdened.” Unfortunately, the funds that Arlington has spent have generated few apartments, and those mostly very expensive. In June, over 3,000 people applied for one of the 120 new Arlington Mills apartments, each of which cost about $250,000. Mostly only people earning $65,000 a year can qualify to rent one of these subsidized, overpriced units.
AHS says the creation of a housing authority would actually slow down or suspend these efforts (to build or retain affordable housing in Arlington) at the worst possible time…Nearly all of the housing developers operating in Arlington have operated for years in Fairfax County and the City of Falls Church under the auspices of the Fairfax Housing Authority. That Authority has won awards and plaudits from HUD for its efficient and speedy process to issue bonds and get funds for its projects. That Authority automatically obtains the critical Federal Tax credits for its new projects, whereas Arlington has to compete and wait and hope that its projects MIGHT get federal tax credits that typically provide one-third or more of the funds for a housing project.