Officials Debate Ways to Offset Loss of Affordable Housing
By Fredrick Kunkle
Washington Post Staff Writer
Sunday, January 29, 2006
The "For Sale" sign is planted on James S. Jennings's front lawn like a white flag of surrender.
Jennings doesn't want to move from Tasker's Chance, a housing development in the city of Frederick that is so new there are almost no trees to block his picturesque views of the Catoctin Mountains. But he says he cannot afford to live in Frederick County anymore. Rising taxes on his $255,327 ranch-style home have collided with the reality of a fixed income.
What really amazes him is this: He is relatively well off. If a guy like Jennings, a retired federal employee with decent health insurance, feels compelled to move, what does that say for less fortunate retirees or young police officers, teachers and firefighters?
"I am not the only person in this situation, not by a jugful," said Jennings, 73. "I'm doing better than a lot of people in this county."
Frederick County's growth in recent years has been fueled by newcomers who escaped the high cost of housing in Washington's inner suburbs. Now, the former dairy farming center is becoming more pricey, as transplants from neighboring Montgomery County slowly make it like the place they sought to leave behind.
A recent report by the Frederick County Affordable Housing Council, which is appointed by county and city governments, found that the number of homes is increasing, but the percentage of homes the average family can afford is falling.
In 2000, a family that lived on $60,256 a year might have been able to afford 42 percent of the homes in Frederick County; today, after adjusting incomes for inflation, only about 16 percent of the homes would be in that family's price range.
Many of those who choose to live in Frederick County now complain more loudly about the cost of buying a home or rising property taxes. With less disposable income, some have taken their lifestyles down a notch or, like Jennings, made plans to move somewhere cheaper.
The issue hasn't escaped the attention of elected officials -- including the Frederick Board of County Commissioners, whose five members are up for reelection.
"There seems to be universal acceptance that there is indeed a problem. That's a milestone," said James Upchurch, president of the nonprofit Interfaith Housing Alliance, which helps providing housing for low-income people.
What troubles Upchurch and others, he said, is that the folks who are leaving are too often the people communities need most, such as firefighters, police officers and teachers.
The Frederick County Public Schools district pays $36,351 for a first-year teacher with a bachelor's degree. But even seasoned, better-paid educators recruited by the county have spurned offers to transfer because of the housing market.
"We lost some dynamite candidates for that reason," said Marsha Wise, a school district personnel officer. "They were experienced, top-notch, and all the principals were clamoring for them."
Walter F. Murray, director of the county's Division of Fire and Rescue Services, said that of 268 full-time firefighters, paramedics, dispatchers and other staff in his division, 126 live outside Frederick.
They are people like Lt. Dan Healy, a career firefighter assigned to Station 15 in New Market. Healy, 32, who grew up in Laurel, joined the Frederick County force about six years ago. He said he makes about $52,000, usually more with overtime. His wife, Kim, 32, looks after their two young children and makes some pocket money selling Mary Kay cosmetics.
"We definitely didn't want a townhouse or an apartment, and that's all we could afford," Healy said.
So the couple and their two young children moved about 30 miles north of Frederick to Littlestown, Pa., near her parents. Their four-bedroom, 2 1/2 -bath colonial cost $142,000 -- less than half, he estimates, of what it would take to buy the same thing in Frederick County.
"I got hired here, and I was trying to move up here, and I couldn't afford it," Healy said.
The average price of a house in Frederick County hit $356,000 in the third quarter of 2005, according to Metropolitan Regional Information Systems data.
Public officials and housing experts say the affordable housing shortage has been driven by low interest rates and a strong regional economy. Other factors include stricter planning controls to avoid the willy-nilly growth that has strained roads, schools and critical resources.
During the 2000 to 2001 drought, for example, the city of Frederick discovered that more homes had been built or approved than its water supply could support, and a temporary housing moratorium was imposed. That drove real estate prices higher and sent developers into Washington County, West Virginia and Pennsylvania.
Tighter rules on allocating water slowed the boom. So did higher impact fees, which are one-time surcharges on new dwellings to defray the costs of building schools and infrastructure.
To pay for schools and libraries, for example, the county charges an impact fee of $10,487 for each new single-family home. The city of Frederick tacks on an additional $4,830 per dwelling for water and $4,950 for sewer. Under former Mayor Jennifer P. Dougherty, city officials also contemplated a transportation impact fee of as much as $10,232 per dwelling.
Such impact fees have been useful in ensuring that services can be improved to support a new home. But the fees also have intensified the affordable housing pinch.
Upchurch, the Interfaith Housing Alliance president, said impact fees now cost more than what the organization recently paid for building lots in Fayetteville, Pa., about 56 miles north of Frederick.
In response to the Affordable Housing Council report, Commissioner Jan H. Gardner (D) proposed changing the impact fee into a tax -- a more progressive way of raising money that hits people who buy more expensive homes harder. It would also give officials flexibility to waive the taxes in certain cases, such as for affordable housing.
But the proposal, which needed approval from the General Assembly, was unanimously killed Friday by the county's legislative delegation in Annapolis.
"Clearly, there was opposition from the builders and the chamber of commerce," Gardner said. "But I won't give up on the larger issue. Someone has to underwrite the cost of building more affordable housing; there's no other way."
Michael L. Cady, (R) vice president of the board, opposed the impact tax and saw it as class warfare.
As an alternative, Cady has proposed creating an affordable housing trust fund with $1 million from the county's $45.5 million budget surplus in fiscal 2005, to pay for impact fees or other costs for modestly priced dwellings. He proposed using money from the county's recordation tax to keep it funded. He also suggested reducing the proportion of costlier, single-family dwellings in new mixed-use developments that also include townhouses.
But Cady, who has been supportive of property rights and impatient with slow-growth supporters, could not even get a hearing for his proposals.
Now, the board is awaiting recommendations from the Affordable Housing Council, which is scheduled to report to the commissioners in March.
By then, Jennings hopes to be gone. County records show his combined yearly city and county tax bill will jump by $1,300 based on his home's recent assessment. He and his wife, Maureen, have already looked in Delaware, where the property taxes are lower.
"When I look at the realities of my financial situation, it's either get out gracefully, or get thrown out down the line," Jennings said.
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