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November 15, 2014

Providing public land and public funds to Arlington housing providers does not help tenants

Arlington Greens chair John Reeder spoke to the Arlington County Board on November 14, 2014
(his testimony was his own responsibility)

Good morning members of the board.
I am here to talk about affordable housing assistance and to caution you against just naively giving away public land to developers who fail to actually produce affordable rental apartments under the AHIF program.

AHIF is so ineffectual that it should be abolished, and its funding instead go to the housing grants program which directly and transparently helps mainly lower income people in Arlington. No public land and no more public funds should go to these developers.

The $12 million spent for the AHIF program in 2014 is really welfare for crony developers and delivers few benefits (in the form of lower rents and significantly more apartments) to tenants in Arlington.

In FY 2014, Arlington County spends $37 million from its local revenues for housing assistance, the largest category being the affordable housing investment fund (AHIF) with $12 million, and the second category being direct housing grants ($8 million).

The $12 million spent for AHIF may add at most 125 new CAF units this year (last year only 55 were added), and probably rent for $100 or so per month less than at market rate complexes, yielding a total benefit to low income renters of $150,000 a year. Even over 30 years, AHIF provides far fewer benefits even than its costs.

The new apartments added under the AHIF are very expensive; their rents charged are close to or at market rate rents; and the households served earning generally 60-percent of the area median income ($65,000 for a family of four).

On the other hand, the $8 million spent for housing grants directly and transparently helps about 1,200 households with about $500 per month each in lower rents paid. Its cost equals its benefits.

Households getting a housing grant earn no more than $46,000 (for a family of four), and must be 65 years or older, disabled, clients of county DHS programs (such as formerly homeless) or a working family with a child. Housing grants go to Arlington residents who are the most needy in our community.

The $12 million used today for AHIF could alternatively provide 2,000 households with a monthly rental grant of $500 versus 125 households receiving a $100 a month rent reduction in a new AHIF unit.

What is the better use of scarce local tax revenues to help low income Arlington residents?

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