Stung by the controversy that arose over the proposed rehabilitation of the Abingdon Apartments, the Alexandria City Council has adopted new, stricter guidelines for issuing tax-exempt housing bonds that set specific maximum rents a developer can charge for units set aside for low-income persons.
Tax-exempt housing bonds are issued through the Alexandria Redevelopment and Housing Authority for the rehabilitation of older apartment complexes and the construction of new developments in order to hold down costs.
Developers bitterly opposed the guidelines, saying they ultimately will reduce the amount of rental housing available in the city.
Angus Olson, head of the authority, told the council before it adopted the guidelines that the authority would "get out of bonding in Alexandria altogether," should the guidelines pass. Olson fears the guidelines will make tax-exempt financing less attractive to developers, moving them to conventional financing. The city has no control over conventionally financed rehabilitations. "I think there's a choke point where developers will begin to seek conventional financing," Olson said last week. "We're as close to it as we've ever been."
The new guidelines go substantially beyond those now used by the authority in deciding what projects are eligible for tax-exempt bond financing. They are particularly strict in determining rent levels for units set aside for low-income persons. Twenty percent of all units must be set aside for low-income families when a housing project is financed by tax exempt bonds.
The new guidelines set the maximum rents for those units that have been set aside: $383 for an efficiency; $455 for a one bedroom; $528 for a two bedroom; and $646 for a three bedroom apartment. Except for the three bedroom, all of these rents are below the citywide average rent.
To qualify as low-income, a person must make 80 percent of the median yearly income for the area or less. For one person, that means a maximum income of $18,900; for two persons, $21,600; for a family of three, $24,300; and $27,000 for a family of four.
Housing authority regulations allow developers to base rents for those units that are set aside for low-income families on the income that is allowed for a family of four paying no more than 30 percent of income in rent. This has sometimes resulted in higher rents than the new city guidelines would allow.
The new guidelines also call on developers to adjust the rents on the set aside units downward to allow as many of the current low-income tenants to stay as possible. The guidelines state that developers should not think the maximum rents are to be charged automatically.
Developers are also required to determine the percentage of residents in a complex slated for rehabilitation who can afford "market rate" and the percentage of residents who would require set aside units. The set aside units should be allocated to existing tenants first, with elderly and handicapped residents getting the first shot at them, followed by tenants with children based on length of tenancy, and then everybody else based on length of tenancy.
Additionally, developers are asked to agree to comply with the city's voluntary rent guidelines, which are set by the Landlord-Tenant Relations Board.
Under the new guidelines, the developer is asked to accept families with children, unless the project is designed for the elderly. Developers are also asked to provide recreational facilities for children, and to do a "day-care needs analysis" noting available facilities and the potential for others. In new projects, developers will be required to build two and three bedroom units to house families with children, and to look at the possibility of combining smaller units in projects being rehabilitated.
The guidelines should "give affected people an idea of what to expect," Councilman Robert L. Calhoun said.