`Live where you work' unaffordable for many

Solutions: Builders, housing advocates and others' ideas include greater density, more incentives.

September 26, 2004|By Bob Erle | Bob Erle,SUN STAFF

When Anne Arundel County firefighter paramedic Keith Whalen got married last year, he decided it was time to find a new home for his family.

What he found were steep prices that he and his wife couldn't afford on their $80,000 combined salaries.

"There is no way we can live in Anne Arundel County," Whalen said.

Despite wanting to stay in the county in which he grew up, Whalen and his family chose Carroll County, where they recently built a $250,000 home in Taneytown. Moving so far from work - he said his commute, once five miles, is now 50 - has been an adjustment.

"It's two hours less with my family each way," Whalen said. "It's hindered the family life a bit but what we trade off is the time that I am home. We are living in a much nicer house and a nicer community."

The real estate industry has grown increasingly worried about members of the work force who, like Whalen, are being shut out of Maryland's red-hot housing market.

Real estate professionals are concerned about pricing first-time buyers out of the market and losing customers who would have traded up to more expensive housing. Builders fear that land-use limits in various jurisdictions have made it too expensive for many buyers and worry that there won't be enough land to construct houses.

The Maryland Coalition for Workforce Housing - a group of consumer advocates, unions, builders and real estate professionals - unveiled proposals for solving the problem during a summit in Baltimore last week sponsored by the Home Builders Association of Maryland.

The panel was formed by the builders group to address the growing concern about government workers, nurses, police officers and others who can't afford housing in the communities where they work.

Among suggestions the builders outlined were increasing the density of homes permitted; providing incentives to redevelop target areas such as U.S. 1 and Ritchie Highway in Anne Arundel County; discouraging construction delays in priority funding areas; and focusing on reinvesting in underused schools.

A report issued last year by the Washington-based National Low Income Housing Coalition, a group dedicated to ending the affordable-housing crisis, said Maryland was the fifth-least-affordable state. The study said Maryland was No. 1 in the acceleration of housing costs.

Home prices in the Baltimore area have been growing by double digits during the past two years. The average sale price of an existing home in Baltimore and its five surrounding counties last month was $266,665 - a 15.42 percent increase compared with August 2003, according to Metropolitan Regional Information Systems Inc.

The average price of a new single-family home was $506,779 between April and June - a 36.2 percent increase from the corresponding quarter in 2003, according to the Meyers Group. The average price of a new townhouse was $311,588 during the second quarter - a 23.5 percent jump compared with the April through June period in 2003.

John McIlwain, senior fellow for housing at the Urban Land Institute in Washington, said increases in land prices, a growing population and long approval processes are the reasons for skyrocketing housing prices. He said environmental factors have played a part.

"There is frequently pressure from environmentalists to not turn farms or forests into houses," McIlwain said. "There has been overall a lot of pressure to restrict land, even though overall we have a lot."

Dru Schmidt-Perkins, executive director of the Baltimore Smart Growth advocate group 1000 Friends of Maryland, said the problem in Maryland lies in the planning.

Resources `squandered'

"Over the years we have really squandered our land resources," she said. "We've built communities that are poorly planned. We've made them very car-dependent, very expensive, and we've made them so jobs are far away from homes."

Perkins' group was part of the coalition and approved the list of proposed policies.

Not everyone agrees with the suggestions. David Bliden, executive director of the Maryland Association of Counties, said that increasing density translates into more profit for the building industry. But increasing the number of homes per lot, he said, is not necessarily what people want.

"Citizens are not typically enamored with density," he said. "The American dream is not typically living in a townhouse."

Bliden believes that one typical complaint of the building industry - that the approval process takes too long - is not valid. He said the permit process is about meeting the zoning and land-use standards that communities demand.

Anne Arundel County Councilwoman Pamela G. Beidle said compromises can be reached, particularly on the issue of density. She recently co-sponsored a bill with Barbara D. Samorajczyk that would authorize an increase in the number of homes that could be built in a community. But the proposal requires builders to sell a certain percentage of those homes at prices working families can afford.

Success elsewhere

She said similar programs have been successful in Montgomery County, Virginia's Fairfax County and a hundred other jurisdictions across the country. Beidle said there is "a real movement to try and take care of the work force that takes care of us."

Anirban Basu, chairman and CEO of consulting company Sage Policy Group Inc., which completed studies for the builders group, said affordability problems are likely to increase.

"The situation has been reasonably manageable because of low interest rates, but we can no longer count on those to hold the situation together," said Basu, who spoke at last week's conference, which also was sponsored by The Sun.

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