AHS Urges County Board to Fully Invest In Affordable Housing In FY 2024 Budget
Dear Chair Dorsey and County Board Members,
Community expenditures should match community values. Recent matters before the County Board have made clear that Arlingtonians value efforts that address affordable housing.
Alliance for Housing Solutions (AHS) fully supports how these values are recognized in the County Manager’s FY2024 proposed budget for the County’s housing safety net programs, including Housing Grants, Homelessness programs, and Eviction Prevention. However, the proposed budget falls short of community values in its waning support of the Affordable Housing Investment Fund (AHIF) and Committed Affordable Unit (CAF) inspection program.
AHS is alarmed by the proposal to cut by half the funding for the Affordable Housing Investment Fund (AHIF). This is especially concerning at a time when all agree there is a serious housing crisis. Our safety net programs rely on the availability of CAFs to house our vulnerable neighbors. CAF unit production relies on funding from AHIF loans. Ample housing at all income levels is an essential component of a socially and economically sustainable community.
In order to achieve the Affordable Housing Master Plan (AHMP) goal of 15,000 CAFs by 2040, the County’s own AHMP Implementation Framework 2.0 identified a need for between $37M – $49M annually, to finance the remaining 6,500 units.  The Manager’s proposed $9.7 million is approximately half of last year’s FY2023 allocation ($18.7M). We must, at a minimum, maintain that level of annual funding.
It is equally important that Arlington protects the investment it has made in affordable housing by ensuring regular CAF inspections. The County must permanently fund the CAF inspection program of the County’s stock of approximately 11,000 CAF’s. This portfolio is growing and will need on-going oversight. Many CAFs are in older buildings that may have more maintenance and asset management challenges that should be monitored.
In addition to maintaining the FY2023 AHIF funding level and providing continued funding for the CAF inspection program in future years, AHS offers these observations regarding Arlington’s affordable housing programming:
Baseline AHIF funding:
Arlington should establish a baseline of annual funding for AHIF, such as $20M per year, to which one-time funds could be added as available each cycle. As more funds are identified, baseline funding should be increased to reach the AHMP Framework levels of $37M – $49M per year. This will help avoid the AHIF being subject to each fiscal year’s budgeting formula.
Long-term AHIF funding source:
Arlington needs to identify a long-term, reliable, funding source in order to reach CAF goals. Although the aforementioned base of $20M would remain far short of the $37M – $49M needed annually, continuing to inconsistently fund AHIF on an annual basis from each year’s available funds is not a reliable method to support housing projects in the CAF pipeline. Arlington should establish both a baseline funding amount and a steady funding source. This will help affordable housing developer partners plan their development applications with more predictability.
Barcroft Apartments loan debt service:
The County must explore all options for a non-AHIF funding source to pay the annual debt service on its Barcroft Apartments loan.  Utilizing AHIF funds each year will jeopardize funding for the many potential projects in the immediate development pipeline, including Crystal Houses, Serrano, Marbella, and Goodwill.
Maximizing leveraged funds:
Arlington must avail itself of opportunities to maximize leveraged funds using AHIF. Without a Notice of Funding Availability (NOFA) for two years, and only $9M for FY2024 (not enough for a 2024 NOFA), the AHIF will receive fewer developer repayments to the revolving loan fund to help replenish the AHIF balance. Each year a project does not proceed, Arlington has also missed out on the investment of that year’s Low-Income Housing Tax Credit (LIHTC) program and a leverage of up to $7 on every $1 of AHIF investment.
Publicly owned land:
The County should explore developing CAFs on publicly owned land. Arlington should look for additional opportunities, such as at the Lee Center and Fire Station #4, and any other potential co-location opportunities. This will help create more affordable housing projects like the very successful development of the Arlington Mill Residences project on County-owned land.
Homeownership:
Arlington needs to be prepared to adequately fund the Moderate-Income Purchase Assistance Program (MIPAP), in order to support minority and first-time homebuyers looking to purchase in Arlington. The passage of the Expanded Housing Options and findings from the Home Ownership Study will increase demand for purchase assistance tools like the MIPAP.
Fair Housing:
The County’s response to the Regional Fair Housing goals for Arlington will require sustained funding of more frequent and broader testing to meet its commitment to housing equity.
Housing Strategy Working Group:
Arlington must convene a working group to develop a more strategic approach to funding the County’s affordable housing priorities. Such a group could provide a shared understanding of long-term goals across the housing continuum and a road map of how to achieve them. The complexity of funding and issues underlying the continuum from homelessness to affordable homeownership require a revised approach developed with the joint voices of community, government, service provider, and developer.
Housing all Arlingtonians is of the utmost importance. It is AHS’ hope that the County’s FY2024 budget will reflect that priority as Arlington seeks to create and maintain a vibrant, sustainable, and welcoming community where all can thrive. AHS stands ready to support such an effort.
Thank you for your consideration,
/s/ David Leibson
Chair, Board of Directors
Alliance for Housing Solutions
/s/ Charles A. McCullough, II
Executive Director
Alliance for Housing Solutions