Affordable Housing in Metropolitan Maryland: a Policy Analysis
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Affordable Housing in Metropolitan Maryland: A Policy Analysis Capstone in Public Policy Department of Public Policy University of Maryland, Baltimore County March 2004 Advising Faculty: Dave E. Marcotte, Ph.D. Associate Professor of Public Policy Donald F. Norris, Ph.D. Director, Maryland Institute for Policy Analysis and Research Professor of Public Policy Graduate Students: Thomas J. Vicino Doctoral Student in Public Policy Steve Sharkey Doctoral Student in Public Policy Audrey South Regan Masters Student in Public Policy Effie Shockley Masters Student in Public Policy Billy Hwang Masters Student in Public Policy Laura J. Gottlieb Masters Student in Public Policy Juanita Pang Wilson Masters Student in Public Policy ACKNOWLEDGEMENTS Various individuals and groups have provided guidance and support during our Capstone seminar experience. First, Professor Dave Marcotte and Professor Don Norris advised our coursework and policy analysis on a weekly basis. Their supervision provided cohesion for our ideas. Second, Professor Royce Hanson helped to focus our problem definition and gave us invaluable advice about the politics of selecting alternatives. Third, we appreciate the assistance of the eight county housing officials who provided valuable information. Last, a number individuals offered insight about the housing policy in Maryland including Greg Shupe, Director of the Office of Transitional Services, Maryland Department of Human Resources; Elizabeth Davison, Secretary of Montgomery County Department of Housing and Community Affairs; Kim Shaffer, Communications Director, National Low Income Housing Coalition; Becky Sherblom, Executive Director of the Maryland Center for Community Development; Jeff Singer, Health Care for the Homeless; Lisa Stachura, Jubilee Housing; Marty Skolnik, President, Skolnik Real Estate Consulting Services. We thank all of these individuals for supporting our work. Thomas J. Vicino Steve Sharkey Audrey South Regan Effie Shockley Billy Hwang Laura J. Gottlieb Juanita Pang Wilson Baltimore, Maryland March 2004 TABLE OF CONTENTS Executive Summary ............................................................................................................1 Introduction .........................................................................................................................6 Problem Statement ..............................................................................................................7 Criteria ..............................................................................................................................12 Alternatives .......................................................................................................................14 Evaluation .........................................................................................................................31 Evaluation Matrix .............................................................................................................47 Recommendations .............................................................................................................48 References .........................................................................................................................51 Appendix: County Analyses A: Anne Arundel County ......................................................................................53 B: Baltimore City ..................................................................................................65 C: Baltimore County .............................................................................................75 D: Carroll County .................................................................................................87 E: Harford County .................................................................................................94 F: Howard County ...............................................................................................103 G: Montgomery County ......................................................................................114 H: Prince George’s County .................................................................................125 I: Fair Market Rents 1996-2004 ..........................................................................137 LIST OF TABLES AND FIGURES (in order of appearance) Anne Arundel County Table 1: Housing Tenure Figure 1: Housing Costs versus Income Figure 2: Housing Burden by Income Category Table 2: Housing Need and Burden Measurements Table 3: Affordable Housing Goals versus Production (2001-2003) Baltimore City Table 4: Housing Tenure Figure 3: Housing Costs versus Income (1998-2002) Table 5: Baltimore City Average House Sale Price by Housing Type Figure 4: Housing Burden by Income Category Table 6: Housing Need and Burden Measurements Table 7: Affordable Housing Policy Results in Baltimore City Baltimore County Table 8: Housing Tenure Figure 5: Housing Costs versus Income (1998-2002) Table 9: Settlement Expense Loan Program (SELP) Partner Results (2000) Table 10: Settlement Expense Loan Program (SELP) Loan Results (2000) Table 11: Lead Hazard Rehabilitation & Rental Rehabilitation Program (2000) Figure 6: Housing Burden by Income Category Table 12: Housing Need and Burden Measurements Carroll County Table 13: Housing Tenure Figure 7: Housing Costs versus Income Figure 8: Housing Burden by Income Category Table 14: Housing Need and Burden Measurements Harford County Table 15: Housing Tenure Figure 9: Housing Costs versus Income Figure 10: Housing Burden by Income Category Table 16: Housing Need and Burden Measurements Howard County Table 17: Housing Tenure Figure 11: Housing Costs versus Income Table 18: Affordable Housing Goals vs. Production (FY2001-FY2002) Figure 12: Housing Burden by Income Category Table 19: Housing Need and Burden Measurements Montgomery County Table 20: Housing Tenure Figure 13: Housing Costs versus Income Table 21: New and Existing Average Housing Prices, 2002 Table 22: MDPU Income Limitations Figure 14: Housing Burden by Income Category Table 23: Housing Need and Burden Measurements Table 24: Affordable Housing Goals vs. Production Over Two Years (1999-2000) Prince George’s County Table 25: Housing Tenure Figure 15: Housing Costs versus Income Figure 16: Housing Burden by Income Category Table 26: Housing Need and Burden Measurements Table 27: Affordable Housing Policy Results Table 28: Benchmarks to Achieving Housing Goals EXECUTIVE SUMMARY There is a lack of quality affordable housing in Maryland. This study, prepared by graduate students in the UMBC Department of Public Policy, finds that more needs to be done by metropolitan county governments, as well as state governments, to provide adequate, affordable housing for their residents. UMBC Public Policy graduate students analyzed affordable housing in the state as part of their Policy Analysis Capstone seminar, a course where students, working with faculty and outside experts in relevant fields, prepare a policy analysis of a current topic. This policy analysis examined the housing market in eight counties that make up Maryland’s two metropolitan areas (Montgomery and Prince George’s Counties in metropolitan Washington, DC; Baltimore City, Anne Arundel; Baltimore, Carroll, Harford, and Howard Counties in metropolitan Baltimore). The analysis finds that there is a high demand for housing in metropolitan Maryland, the result of a strong regional economy, job growth, service institutions such as hospitals and universities, and proximity to the nation’s capital. Access to these and other amenities in the region has created pressure for housing in Maryland. Supply has not kept up with demand and has remained limited. The result is a shortage of affordable housing units. The lack of affordability means that low-and-moderate income households are being squeezed out of housing. For example, the average Marylander must work 40 hours a week at a salary of $18.85 per hour ($39,200 annually) to afford a two-bedroom apartment. That salary is more than three times the minimum wage of $5.15 per hour and well above the starting salaries for teachers, nurses, police, firefighters and even computer system analysts in many jurisdictions. Counties currently offer a variety of policies and programs to assist renters and homeowners in locating affordable housing. After reviewing the current affordable housing programs and policies in each jurisdiction, the analysis found that existing county housing policies do not go far enough in making units affordable, and most jurisdictions are not even meeting established goals to increase the number of affordable housing units. The project identified a range of policy and program alternatives that could potentially boost the supply of affordable housing, and evaluated each alternative in terms of 1) number of affordable housing units (actual and potential) produced; 2) cost effectiveness; 3) legality; 4) political feasibility; and 5) equity. After considering the needs of various local jurisdictions, the study offers three recommendations for programs that could increase the availability of affordable housing in Maryland: • Increase the Maryland Affordable Housing Trust Fund (MAHT). MAHT, established by the Maryland General Assembly in 1992, provides funds to build affordable housing units. This program is attractive to all jurisdictions because it increases the housing stock, a major goal in housing affordability. The report 2 recommends a substantial increase in funding for