Builders want alternatives for modest homes

They say money is lost on lower-priced housing

Paying fees to county proposed

Having developers donate land raised as possibility

Howard County

December 12, 2004|By Larry Carson | Larry Carson,SUN STAFF

Howard County developers are pressing for another way to satisfy their moderate-income housing obligations, claiming they can't afford to build middle-income homes amid the luxury units they are selling for record-high prices.

A group of nearly a dozen developers and lawyers, along with a representative from the Homebuilders Association of Maryland, met with county planning and housing officials and asked for permission to pay the county fees instead of building the homes, participants said.

The builders' complaint is that they are being squeezed, despite the high prices they charge. They argue that the cost of building luxury units is so high that they lose money on the moderately priced ones. High monthly fees that residents must pay reduce the size of a mortgage that middle-income buyers can afford, making the problem worse.

County zoning law grants builders the right to build more homes in a project in return for providing free house lots for moderate-income houses, which are required in mixed-use, high-density and planned senior communities.

Worried that allowing builders to pay fees instead of building homes will ruin the county's already small program to promote moderate-income housing, county officials are devising new ways to produce what Leonard S. Vaughan, the county housing director, calls homes "like we all grew up in."

What Vaughan would prefer, he told the county's Housing and Community Development board at a meeting Thursday night, is to get land from developers where new middle-income homes could be built.

"It doesn't make sense to talk about affordable housing if you get 12 units a year. That's a drop in the bucket," Vaughan told the board.

Money paid by developers would allow the county's Housing Commission only to buy older, existing homes for the program, and that would tighten the inventory in the middle-income market, Vaughan said.

"Clearly, just handing Leonard [Vaughan] a check doesn't work," said Marsha McLaughlin, the county planning director. Even for senior housing, she said, "if you have something in that high a price range, is it worth having one lucky senior who gets to live in a luxury development? What is our goal? Is it better taking a subsidy and creating more than one unit?"

Vaughan said one suggestion is to allow builders to donate land to the county where new middle-income communities could be built.

"Where would they go, what area?" asked board member Nancy Rhead.

Vaughan said the location may not be important. "It would be what used to be a middle-class subdivision - townhouses that fit our price ranges," he said. The houses would not have high-cost luxury touches such as bay windows or fancy fieldstone and brick fronts.

"For lack of a better term, [they would be like] a Howard Homes townhouse," Vaughan said, referring to the functional, basic brick homes built throughout Columbia in the 1970s and '80s by builder Lee Rosenberg.

Board member Michael G. Riemer suggested that developers could help speed new homes to completion by pooling resources to build new schools where they are needed, instead of burdening taxpayers with that expense.

"When you build a subdivision, the developer builds the roads, sewers, all the infrastructure, and when it's finished, they give it to the county," he said. "What if developers ... develop the school?"

The larger problem is that a combination of factors - from county growth controls to low interest rates - are forcing prices sky high. That's forcing hundreds of working families out of the county's red-hot real estate market, Vaughan said, telling the board that to buy a $400,000 home - now roughly the county's median home price - a family would need an annual income of $135,000.

Vaughn warned the board that it had to consider its options now.

"Developers are meeting. It's going to become a political process," Vaughan said. Given that growing pressure, he said, "change is probably inevitable. We need to get ahead of it."

The conditions Vaughan described exist at Emerson and Maple Lawn Farms, two big mixed-use developments under way in the southeastern county, along Route 216. General Growth Properties, which acquired Emerson developer the Rouse Co., is committed to providing 60 units of moderate-income housing there. Maple Lawn developer Stuart J. Greenebaum has promised to provide another 100 - half of them for seniors.

Both say they will deliver the units, although new detached houses in Emerson sell for $650,000 to $750,000 and townhouses in both projects are going for more than $500,000.

Greenebaum said he will use condominium apartments to meet his moderate-housing obligation, probably starting late next year. "The cost is absolutely prohibitive in townhouses," he said.

"This is something we believe in. It wasn't forced upon us," Greenebaum said about his moderate-income units.

Dennis Miller, a General Growth official, said, "We'll make it happen," regardless of new-home prices, though he has no concrete design or delivery date for the first moderate units.

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