As Arlington County looks to close out its 2019 budget and plan for 2021, the Alliance for Housing Solutions continues to press for greater funding resources for affordable housing. On November 19, the County Board approved an additional $500,000 for emergency housing assistance during FY 2020. In addition, the County Board used many of the recommendations provided by AHS as guidance for the County Manager’s budget plans for the upcoming fiscal year.
See below for the letter AHS sent to the Board prior to the November 19 meeting, along with an update on the guidance the Board gave the County Manager.
AHS Letter
Dear Chairman Dorsey and Members of the County Board:
We are writing on behalf of the AHS board of directors and the undersigned organizations to urge the County Board to take immediate action on the county’s urgent needs for affordable housing through the FY 2019 budget close-out and the FY 2021 budget guidance.
Utilize Close-Out Funding to Prevent Displacement
We urge the County to use available close-out funding to create an Emergency Anti-Displacement Contingency Fund to be used in FY 2020 that is focused on the most vulnerable households for whom the County’s longer-term housing strategy could be too late. There are 28,000 individuals who are trying to make ends meet on 30% or less of our area median income (earning $36,000 or less for a family of four).
The following are close-out funding strategies that address these immediate needs:
Create a contingency fund for Housing Grants of up to $1 million in the current fiscal year to account for increasing rent pressures and housing needs. While current client projections indicate the program is likely to be able to meet demand with the funds available, should the application volume or rent costs increase in the remainder of this fiscal year, having additional dollars available for grants would be essential to meeting these households’ immediate needs.
Increase Emergency Stabilization funding by $500,000 for the current fiscal year with an expansion of program guidelines to allow up to three months of emergency assistance for each household, creating a more realistic “runway” for residents to resolve delinquencies and develop a near-term financial plan to recover from the crisis. Currently, renters have limited access to $500 of emergency rental assistance funding and up to $250 of utility expense funding through Arlington Thrive. These caps and the short-term nature of this assistance are often not enough to allow for stabilizing households in crisis.
Allocate $10-14 million to a Quick-Strike Land Acquisition Account to be used to purchase properties suitable for affordable housing development when (or before) they come on the market. This Account could be used by the County, affordable housing developers or other nonprofit land-banking entities to buy and hold the properties in anticipation of housing development and its funding application process. The current AHIF funding process has not been able to support these types of opportunistic acquisitions because of the preferences for projects in the more advanced stages of the development process. This could be implemented as a special category within AHIF that would follow a more streamlined review and approval process. Land purchases require much less underwriting and due diligence than full development proposals and so they can move faster than traditional AHIF allocations. If affordable housing development proposals fail to materialize as expected, the land can be held for future development opportunities or sold for other public or private purposes. Given rising land values, there would be very little financial risk involved in supporting these purchases.
Signal Sizable Increase in Housing Funding in FY2021 Budget Guidance
The County Board has an opportunity to show leadership on affordable housing issues with forward-thinking guidance to the County Manager that stresses the high priority of housing needs in the County. These needs have been made abundantly clear following the recent joint work session with the City of Alexandria where housing affordability rose to the top of the list, as well as the regional consensus expressed by the Council of Governments’ September resolution to meet aggressive targets for regional housing production and affordability.
We recommend that the County Board include the following elements in its FY 2021 budget guidance to the manager:
Increase the total Affordable Housing Investment Fund (AHIF) allocation to $25 million. Given the significant need for more affordable housing in Arlington as well as a positive long-term budget outlook, a significant boost in spending for AHIF and Housing Grants is warranted. In FY20 the County allocated $16 million to AHIF with $8.7 million in the base budget and $7.3 million in one-time funds. Increased funding to $25 million, with half of this total in the base budget, would cover expected requests from projects in the pipeline and potentially allow additional projects – either new construction or preservation of existing affordable properties – to move forward through the NOFA process.
Consistent with the Shared Prosperity Initiative of the Arlington Community Foundation, we support a greater focus on 30% AMI households within the County’s allocations of AHIF, Housing Grants, Emergency Assistance and other targeted programs. Any increases should be guided by an analysis of the most impactful strategy for deploying County funds expressly to meet the needs of households at 30% of AMI. Subject to the results of this analysis, we recommend that at least $2-6 million of the total annual allocation of AHIF be dedicated to funding for units serving these extremely low-income households.
Increase allocations to the Housing Grants program and update the eligibility guidelines to account for extremely low-income households that do not meet the program’s current categorical requirements. In the most recent fiscal year (FY19) there were 1,181 Housing Grant applications and only 280 approved. Those who were denied often were within the income level for the program but failed to meet other eligibility requirements. We urge the County to review and update these eligibility rules to provide a safety net for those who are most in need of this assistance such as young adults aging out of foster care, adults without a disability under age 65 or those unable to meet the work requirements.
We appreciate the County Board’s focus on the needs of Arlington’s most vulnerable households, and we urge you to take action now to prevent further displacement.
Sincerely,
Mary Margaret Whipple Chair, AHS
Dave Leibson President, AHS
Carol Brooke
Alice Hogan, Housing Commission member
Nina Janopaul, Arlington Partnership for Affordable Housing
Benedetta Kissel
Michelle Krocker, Northern Virginia Affordable Housing Alliance
Jennifer Owens, Arlington Community Foundation
Andrew Schneider, Arlington Thrive
Karen Serfis, Latino Economic Development Center
Kathy Sibert, A-SPAN
Rev. Jon Smoot, Habitat for Humanity of Northern Virginia
Walter Webdale, AHC Inc.
Arlington County Press Release (excerpts) Emphasizing funding affordable housing, preventing displacement
The Board directed the Manager to include options for increasing funding for the County’s Affordable Housing Investment Fund (AHIF) by at least $3 million, $5 million, and $9 million above the FY 2020 level of $16 million by using both ongoing and one-time funds. AHIF, a revolving loan fund, is the County’s primary vehicle for funding affordable housing.
The Board asked the Manager for recommendations for how an increment of new AHIF funds or other housing funds could be used to support the housing needs of residents making less than 30 percent of the Area Median Income (AMI). Recommendations, the Board said, could include a set-aside for achieving deeper affordability in new committed affordable housing projects in FY 2021; loans to refinance existing committed affordable housing projects and changes to Housing Grants formulas or eligibility to serve more residents making less than 30 percent of the AMI.
The Manager also will develop proposals for funding, staffing and policy approaches to better monitor trends in rents in Market Rate and Committed Affordable apartments and to support low-income residents facing housing instability as a result of significant increases in rents and/or utilities. Proposals the Board said it wants to see include counseling and tenant services; increased emergency assistance through the County’s eviction prevention fund; legal services; outreach specialists embedded within County agencies, on site and in partnership with Arlington Public Schools or within another community partner.
Any increase in AHIF funding proposed for FY 2021 should target meeting the needs of households in Arlington earning no more than 30 percent of the Area Median Income, the Board said. The federal government considers households earning less than 30 percent of the AMI to be extremely low-income. A four-person household in the Washington Metropolitan Area earning 30 percent of the AMI earns about $32,760 a year.
The Board also directed the Manager to develop a strategy for the County to fund or facilitate the purchase of property for affordable housing and community facilities.
Learn more and participate in the development of Arlington County’s 2021 budget.