Programs Offer Housing Help, but Who's Buying?
Saturday, May 16, 2009
In most of the Washington area, it's gotten cheaper to buy a townhouse, condo or house. However, the increased affordability has complicated government programs to help moderate- and low-income families own homes.
Each jurisdiction has a different emphasis in affordable housing, including both subsidized rentals and homeownership opportunities. In Montgomery County, for instance, builders are required to sell a few of their new townhouses or condos at cost to families chosen by the county. Those families can't make more than 70 percent of the median income for the region, meaning the limit is about $50,000 for a single person, $72,000 for a family of four.
The District occasionally provides tax dollars to groups of tenants in decaying rent-controlled buildings who want to buy and renovate them. The vacant units available after the buildings have reopened have to be sold to those making less than 80 percent of regional median income.
In both places, demand to buy government-supported affordable housing has waned.
For instance, Las Marias, a condo conversion by low-income tenants in Columbia Heights, opened a little more than a year ago. One of the largest condos in the Northwest Washington building, priced at $363,000, has been on and off the market for a year. Two other subsidized units remain unsold there, too.
A three-bedroom townhouse in Germantown that cost just over $125,000 sold to a nonprofit group in April when no modest-income families applied to buy it.
Chris Anderson, manager of the Moderately Priced Dwelling Unit (MPDU) program for Montgomery County, said finding buyers for the more expensive high-rise condos in Silver Spring and Bethesda has been a problem for years, and it has always been difficult to find buyers for complexes restricted to residents 55 and older. But when there were no takers on a new three-bedroom townhouse -- that was startling.
"That was the first time that happened," Anderson said. "I'm not sure whether that is a harbinger for things to come."
Although government officials still say they have a role in helping working-class families find decent, affordable housing, the shifting market is raising questions. Should governments spend more money and time on rental housing? Does it make sense to sell subsidized units in high-priced condo buildings? What is the most productive use of tax dollars for affordable housing?
There are many reasons why fewer low-income families are lining up to buy these places. These days, buying requires a decent credit history, and many low-income people may use only cash or have a spotty record of paying debts. At some price points, even a subsidized unit is too much of a stretch.
And perhaps most of all, while the income-restricted units are less expensive than some units on the open market, they're more expensive than others.
For instance, two-bedroom units for sale at the Las Marias condo, on Columbia Road NW, are priced at $281,400 and $363,200. There are two-bedroom condos for sale on the same block for $410,000, but there's also a market-rate two-bedroom condo on the next block for $230,000, and another a few blocks away for $290,000.