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On affordable housing issue, there are no easy answers

March 10, 2005|by BOB MAGINNIS

Baltimore City Del. Maggie McIntosh, concerned that teachers, police and firefighters won't be able to live where they work, this week introduced a bill to force Maryland's local governments to pay attention to the affordable housing issue.

It's a topic I've written about since 1990, when the price of many homes here began to creep into the $90,000 to $100,000 range. Then as now, rents rose faster than wages, which made it difficult for families to save for a down payment.

Washington County is just beginning to address the issue, with Commissioners President Greg Snook recently telling the "State of the County" audience Feb. 1 that it's on the county board's "to be addressed" list.

Hagerstown has done better over the years, buying properties in distressed areas of the city, then renovating and reselling them to people who meet certain income guidelines.

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But because of the increase in property values, the number of "fixer-uppers" available for the city to buy has been dropping.

So, assuming you already own a house, why should you care about this issue?

If you have children, you might want them to live nearby, particularly if you're going to babysit for your grandchildren.

If you're an employer, you might want your employees to live close enough so that every snowstorm doesn't mean several no-shows when there's work to be done.

But the reason that hits home with me is what might happen to agencies that depend on volunteers to get their work done.

Over the years, I've covered a lot of these groups. I've taken note of the fact that many of those providing services, whether it was through groups such as Big Brothers-Big Sisters or Little League baseball, were not white-collar executives, but people more interested in providing service than working overtime.

If such people can't afford to live in Washington County, we will lose a great deal. It's an issue local fire and rescue companies have already dealt with, as volunteers who commuted out of the area became unavailable for daytime calls.

There are a number of possible solutions. In Montgomery County, the Moderately Priced Dwelling Unit program, or MPDU, has provided more affordable housing since 1974.

In exchange for putting some affordable units in their developments, developers get to build more homes than the zoning would normally allow.

The good thing is that MPDU is court-tested, so it could be enacted here, as-is, fairly quickly. But in a county much larger than ours, it produced only 11,000 homes from 1976 to 2001. There are administrative costs as well.

In the early 1990s Frederick County offered tax breaks to developers for building dwellings that would be rented to low- and moderate-income families for up to 30 years. But that doesn't create a permanent pool of affordable housing.

My own idea is to have government subsidize construction of starter home developments. Deeds would be restricted so buyers couldn't add on, ensuring turnover as families grew. Sale profits over and above a set percentage would go back into the program.

Tom Firey of the CATO Institute said that such provisions would prevent lower-income people from benefitting from the same increases in value that other property owners experience.

I agree, but life is about trade-offs. I'm betting that if the choice is accepting some conditions or not getting the house, most would-be homeowners would go along with the program.

The other option I wrote about in the 1990s was the conversion of rental apartments into condominiums. I'm not so enthusiastic about this now, because after reviewing portions of the Maryland Condominium Act, rental tenants in a building set for conversion have plenty of rights, including first crack at buying their apartment.

Certain handicapped or senior citizens can have their leases extended for up to three years, while others are eligible for up to $750 in moving expenses.

Unless the building is already empty, this wouldn't be an easy task. It seems clear, based on my non-expert reading of the law, that the only way to legally empty the building would be to wait for tenants to move, leaving some units vacant - and losing money - until all are gone.

Ensuring that some affordable housing is built locally will not be easy, but working on that would make more sense than appointing a commission to study property tax assessments and relief for taxpayers.

Existing law contains all the relief needed. Now that I've solved that puzzle, let's take a serious look at the affordable housing issue.

Bob Maginnis is editorial page editor of The Herald-Mail newspapers.

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