Offering economic incentives to developers as a way of encouraging them to include low and moderate income units in their projects does not appear to be an effective means of meeting those housing needs.
A Washington Post survey of suburban counties where such incentives are offered revealed strong developer opposition on social as well as financial grounds, and consequent inability or unwillingess of county governments to remedy the situation.
Last May the Metropolitan Washington Council of Governments issued a progress report on the number of moderate income units built or under construction, many of them as the result of incentive programs. Fairfax County had 36 units; Arlington County, 12; Montgomery County, 108, and Alexandria, none.
Nearly a year later the picture has changed little despite a strong revival of construction here. Significently higher numbers are said to be in the planning stage, although given past experience, many of these may never materialize.
In the first half of this decade, Montgomery, Fairfax and Arlington counties and the city of Alexandria passed ordinances stipulating that developments of 40 to 50 or more units should include 10 to 15 per cent low-and moderate-income housing. In exchange, the developers were to receive permission to build more units per acre than they would otherwise be allowed (known as a density bonus). Sometimes, they were allowed to build taller structures than the original zoning called for.
Montgomery County, which passed a Moderate Priced Dwelling Unit ordinance in 1974, is the only metropolitan jurisdiction where inclusion in 50-unit developments is mandatory. According to the county planning board, developers have been neatly -- albeit legally -- avoiding the requirement by building only 48 or 49 houses on a tract.
This saves a builder from having to include $34,000 townhouses -- the price ceiling established for sale to families earning costing more than $100,000. It's not only that the builder would lose money on the lower-priced houses, even with county subsidies; there is fear in the profession that inclusion of the moderate units would drive down the selling price of the more expensive ones. Prospective buyers might hesitate at the thought of "poor people" living down the road, the builders' reasoning goes.
This displarity in prices can also lead to speculation where buyers are not carefully screened, thus effectively removing the units from moderate housing rolls. A few years back eligible owners bought $30,000 units at Lake Braddock in Fairfax, then made killings the next year by reselling them at their real market value, one county planner alleges.
Montgomery County Councilwoman Elizabeth Scull, who rechristened the moderate-priced units "affordable homes" in an effort to promote them, has said she thinks they would be ideal for young couples wanting to live near their affluent parents. But she warned recently that if developers continue to skirt the law by building 49-unit subdivisions, the Council may have to consider other steps, such as restricting sewer allocations.
In Alexandria, a voluntary policy in effect since 1973, has not lead to the construction of moderate-income units.
In Fairfax County, the fastest-growing in the Washington area, the policy has been voluntary since the Supreme Court of Virginia struck down a mandatory ordinance on the grounds that it was "confiscatory."
Fairfax still has unhonored pledges on paper from builders who said they would include 1,600 moderate-priced units on 19 sites.
But in the past two years, very few of the 300 or 400 zoning applicants who have asked the country for permission to build have even been willing to pledge to build moderate units, said Richard Reid, staff coordinator in the Fairfax Office of Comprehensive Planning.
One who did was Richard T. Wright, developer of Burke Manor in Burke, Va. Ten of his 65 townhouses there will be made available for sale solely to county employees such as firemen and policemen at a cost of roughly $33,000 --houses. Construction of these 10 is still contingent upon some form of financing backed by the county. If approved, they are expected to be ready by the end of the year. Wright has also pledged to build about 250 moderate rent units among a planned 5,000 units in Burke Center. The county estimates that some 10,000 to 15,000 of these units are needed in Fairfax.
Wright and his agent both declined to discuss the project.One Fairfax County official, who asked not to be quoted, said Wright was afraid his townhouses would not sell if it became known moderate-income families would also live there. None of the other developers involved in incentive moderate-income housing would answer this reporter's phone calls.
Planner Reid commented, "There is not enough incentive for developers to agree (to build moderate income housing), and the council does not have enough leverage to force them to do so."
Martha V. Pennino, vice chairman of the Fairfax Board of Supervisors, admitted she was that afraid developers would take the zoning board to court if it refused them permits when they had enough "points." (Under a weighted system of nine criteria, including elements such as open space and progressive conservation techniques as well as low-and moderate-income units, developers can acquire enough points to qualify for maximum density even without including the moderate-price units.)
In a March 14 memo to the zoning board, James M. Scott, supervisor of the Providence district, said, "Developers now appear to feel fairly confident they can disregard that criterion and still obtain the higher end of the density range. The result is not enough low and moderate income housing." Both Penino and Scott called for clarification and reform of the policy.
Arlington County has had a voluntary policy since 1971, but the policy is only in effect when site plans are required.
Since it was implemented, approximately 10 projects of 50 or more units have been authorized or completed in these areas. Only two of the developers elected to provide a total of 25 rental units for senior citizens.
One, Crystal Square, has 12 moderate-rent apartments out of a total of 378. The units for the elderly are the same as other units but tenants have no garage space and no connection to the central switchboard. Monthly rental for a one-bedroom apartment is $210, compared with the regular rent of $365. There are no vacancies at the moment.
National Condominium Systems, builder of the other project, Tower Villas, chose to rehabilitate 13 single family houses elsewhere and rent them for the required 10 years at moderate rates.
Four of the other developers decided to buy their way out by contributing $4,500 per unit (the sum is now up to $6,000) to the county's rent supplement program.
This method holds advantages for the developer, the county and the tenant, according to Arlington Zoning Board Chairman Joseph Wholey. The maximum a builder could sell a townhouse for as moderate income housing is about $35,000, or half the going price. A 10-year rental at $170-$245 a month would amount to a $40 monthly subsidy.
The "in lieu payment" allows the county to subsidize rents on existing houses for low income families, thus avoiding putting the poorest people in the most expensive (new) housing, in Wholey's view. In fiscal 1975, county builders contributed $45,000 to the rent fund. This dropped to nothing last year 1976, but has risen to $30,000 so far this year. Arlington County contributes about $250,000 of its federal housing subsidy money annually to the fund.
While Arlington's quota for senior citizens is nearly met, thanks to several large buildings for the elderly to be built in Pentagon City, Wholey admits his staff is still wrestling with the problem of how to provide sufficient housing for low income families with children. He suggests that the board could grant a 10 per cent density bonus to those willing to integrate those families into conventional housing, but deny it to those who elect an in lieu payment. The matter has not yet been brought up before the County Council.