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Workforce Housing Policy in DC Metro Region

Workforce Housing Policy in DC Metro Region

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Published by Matthew Steenhoek
A paper that studies the need for workforce housing option in the Washington DC Metro Region and looks specifically at policies in Alexandria, Arlington, Montgomery County, and the District of Columbia. Completed as course work for a Housing Policy class being taught by Derek Hyra in the Urban and Regional Planning program at Virginia Tech.
A paper that studies the need for workforce housing option in the Washington DC Metro Region and looks specifically at policies in Alexandria, Arlington, Montgomery County, and the District of Columbia. Completed as course work for a Housing Policy class being taught by Derek Hyra in the Urban and Regional Planning program at Virginia Tech.

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Published by: Matthew Steenhoek on Jan 31, 2013
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Workforce Housing Policy in DC Metro Region
 
Matthew L. Steenhoek UAP 5604: Housing PolicyVirginia Polytechnic Institute and State UniversityUrban Affairs and Planning, Alexandria CenterProfessor Derek HyraFall 2010
 
 
Workforce households in the DC area are increasingly feeling what the Urban Land Institute callsthe “Beltway Burden,” a function of the combined cost of housing and transportation in the region. It isgenerally accepted that households making between 80% and 120% of Area Median Income (AMI)qualify as “workforce households.” The core of this group is the school teachers, police officers, and firefighters, and EMT’s who serve and protect our communities. Policy interventions are necessary to ensurethat workforce households, particularly the core group described above, can afford to live near their placeof employment.According to the one-year estimate from the 2009 American Community Survey (ACS), the AMIfor the Washington-Arlington-Alexandria, DC-VA-MD-WV Metro Area for a family of four is$102,340[1]. As indicated by the official name of the metro area, this AMI calculation covers anextremely large geographic area. The focus of this paper is on workforce housing conditions and policiesin the District of Columbia and three of the most affluent and urbanized surrounding jurisdictions: City of Alexandria, Virginia, Arlington County, Virginia, and Montgomery County, Maryland. Within theseclose-in jurisdictions, there is significant variability in the AMI, where more than sixty thousand dollarsseparates the District of Columbia from Arlington, its neighbor across the Potomac River. This highly-localized disparity has implications on how each jurisdiction attempts to address the issue of workforcehousing affordability.
Defining the Need Nationally
Historically, the focus of public housing support in the United States has not been on theworkforce housing segment. Most current measures utilized by housing affordability programs, themortgage interest deduction excluded, are only available for, or heavily weighted towards, householdsthat are below the 80% AMI threshold. This is evidenced by the Community Development Block Grant(CDBG) program which must dedicate at least 70% of its funds to benefit low- and moderate-incomeprograms at or below 80% AMI, the HOME Investment Partnership program which only assistshouseholds below the 50%, 65%, or 80% AMI levels, the federally-regulated multifamily housing bond
 
 
programs which must be primarily used for households with incomes up to 50% and 60% AMI, and thevarious housing trust fund programs that traditionally focus on households earning below 50% or 80%AMI (Schwartz 2006, 180-192).One program that featured a break from this mold was the Section 221(d)3 Below Market InterestRate program, established in 1961 under the Kennedy administration. This program enabled developersto secure below-market rate, FHA-insured mortgages from private lenders which, in turn, allowed rentalsat below-market rates to median income families whose incomes were too high for public housingqualification yet too low to meet market demands. Section 221(d)3 did not produce a great number of units during its limited lifetime. Generally an unpopular program, it was excessively expensive from ashort-term accounting perspective and it was seen to be helping “those who were too well off to deserveit” (Schwartz 2006, 130).Today, a need remains to provide housing choices for workforce families who are too affluent toqualify for traditional housing programs but who cannot afford median-priced market rate housing in thecommunities they serve. While it has become possible for workforce families to purchase median-pricedhomes in more markets, due to the drop in interest rates between 2008 and 2009, many markets remainwhere core workforce families cannot afford purchase. The Center for Housing Policy’s
Paycheck toPaycheck 
shows that elementary school teachers cannot afford to buy a median-priced home in 40% of national markets. Police officers are in roughly the same position, with 41% of markets falling outside of the affordability range; and licensed practical nurses are being priced out of almost 70% of housingmarkets.Affordability is generally better for rental products. Two-bedroom fair market rents are belowmedian mortgage payments in 88% of markets. While this statistic is promising for workforce families,there are other contributing factors that may threaten to reduce rental affordability for workforce familiesin many markets. As the residual effects of the foreclosure crises continue to be felt, and as more familiesrevert from home ownership to renting or remain renters longer due to uncertainty in the market, theavailable number of family-sized apartment units at a fair market rent may dwindle. This scarcity could,

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