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Market-Rate Affordable Housing: an Approach for Preservation

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Market-Rate Affordable Housing: an Approach for Preservation Market-Rate Affordable Housing: An Approach for Preservation March 31, 2017 Table of Contents Executive Summary ...................................................................................................................................................................................................................... 1 Introduction ................................................................................................................................................................................................................................. 5 Market Rate Affordable Housing and Arlington County’s Affordable Housing Policy .................................................................................................................. 5 What is Market-Rate Affordable Housing? .................................................................................................................................................................................. 6 Summary of Arlington’s Efforts to Preserve Market Rate Affordable Housing ............................................................................................................................ 7 Analysis of Market-Rate Affordable Housing in the Study Area ................................................................................................................................................. 10 Current tools available to prevent the loss of MARKs ................................................................................................................................................................ 14 Other potential tools/methods .................................................................................................................................................................................................. 20 Risk Analysis ............................................................................................................................................................................................................................... 22 Recommendations ..................................................................................................................................................................................................................... 23 Summary Table .......................................................................................................................................................................................................................... 24 Area Profiles ............................................................................................................................................................................................................................... 26 Central Lee Highway .............................................................................................................................................................................................................. 26 East Lee Highway ................................................................................................................................................................................................................... 32 Westover ............................................................................................................................................................................................................................... 38 Ballston and Virginia Square Edges ........................................................................................................................................................................................ 44 Rosslyn Edges ......................................................................................................................................................................................................................... 52 Lyon Park ............................................................................................................................................................................................................................... 60 Penrose .................................................................................................................................................................................................................................. 66 Nauck/ Long Branch Creek/Aurora Highlands ........................................................................................................................................................................ 72 Shirlington .............................................................................................................................................................................................................................. 78 Bibliography ............................................................................................................................................................................................................................... 84 Selected Arlington County Resources ......................................................................................................................................................................................... 84 Appendix: Inventory of MARKs in Study Area ............................................................................................................................................................................ 85 Market-Rate Affordable Housing, or MARKs, are apartments that have rents that are affordable to low- and moderate-income households by virtue of the age, location, condition and/or amenities of the property. These properties do not have a limit on income for tenants and thereby serve low- and moderate-income households as well as households with higher incomes. The rent is not regulated by the County or any other public agency. Executive Summary providing for a diversity of incomes within the same building. MARKs are commonly referred to in two categories: those units with rents Preserving non-income restricted apartments that are affordable to affordable up to 60% AMI and those units with rents affordable from thousands of households is vital to Arlington’s ability to remain a diverse, 60% to 80% AMI. inclusive and sustainable community. If this supply is not preserved, many of these households will be priced out of Arlington. The importance of these units is that they add diversity to the housing The Affordable Housing Master Plan (AHMP) establishes the County’s supply. As market shifts occur and land values continue to increase, policy to “make every reasonable effort to prevent the loss of market- Arlington faces significant challenges to maintain this affordable housing. rate affordable rental housing” (policy 1.1.3). When the County Board To overcome these challenges, Arlington must strategically act and adopted the AHMP, it also provided direction to staff to identify areas convey the importance of these units, express our interest in preserving with significant Market-Rate Affordable Housing (MARKs) that might be affordable housing, and provide a variety of viable tools to retain them. considered for intervention. In June 2016 staff presented a preliminary This report includes an overview of Arlington’s past efforts in preserving analysis to the County Board identifying nine MARKs areas. Since that time, staff completed additional analysis of the MARKs areas and affordable housing preservation tools. In Arlington, MARKS are housing units that have market rents that are affordable to low- and moderate-income households (up to 80% of the Area Median Income (AMI) by virtue of the age, location, condition and/or amenities of the property. The rent of MARKs are not regulated by the County or any other public agency, so there is no assurance that lower-income households live in these lower-rent housing units. There is no guarantee that these homes will remain affordable to lower-income households. While affordable to households with lower incomes, the incomes of tenants in MARK units are not restricted, allowing for households with higher incomes to reduce their housing costs while market rate affordable housing; an inventory and analysis of Market-Rate Market Affordable Housing: An Approach for Preservation 03/31/2017 1 Affordable Housing in the non-planned areas of the County (referred to 31 of the properties within the Study Area have been identified as as the Study Area, and encompassing all of the County excluding areas either Essential or Important on the County’s Historic Resources with County Board adopted Sector, Small Area or Neighborhood Plans); Inventory (HRI). a review of existing and potential tools for advancing the preservation of The Ballston Edges, Rosslyn Edges and Westover face a higher risk this component of the housing stock; and recommendations for further for the loss of MARKs due to redevelopment. analysis and potential actions. Since the late 1970s, Arlington County has preserved the affordability of Key findings of this report are: over 4,500 MARKs by providing loans to affordable housing providers to acquire and preserve these units. When the affordability of MARKs is The segment of MARKs most at risk are the MARKs affordable up to preserved through acquisition and long-term affordability restrictions, 60% AMI. The supply of MARKs affordable between 60 to 80% AMI they are no longer are considered MARKS, but become committed has been
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