Housing efforts may turn to rentals

March 12, 2006|By LARRY CARSON | LARRY CARSON,SUN REPORTER

Faced with growing problems spawned by soaring home prices, Howard County's housing authorities are planning a series of changes to programs for moderate-income buyers.

Inflation has made low-income housing an impossibility, said Leonard S. Vaughan, the county housing director, and attendant costs such as higher property taxes and community association and condominium fees are crippling the county's efforts to provide moderate housing for families in the $35,000 to $60,000 income range.

Vaughan said that although home ownership always has been a program goal, the high prices may force taking another route. "The best way to keep housing affordable is to make it rental. We may want to do more rental," he said.

He is pushing for that in the 60 units of moderate-income housing promised for Emerson, General Growth's upscale, mixed-use project along Route 216 in North Laurel. Vaughan said the lowest price for townhouses there is about $750,000.

General Growth Properties Inc. is planning to add an apartment house to fulfill its voluntary obligation for moderate-income units. The county wants the one- and two-bedroom apartments to be for any age occupants, including some young families, while General Growth Vice President Dennis Miller wants to house only seniors.

High-end buyers often don't want any subsidized housing near them, but seniors inspire less controversy.

"We've done a great job of building elderly housing. We need some family housing," Vaughan said.

"That sounds wonderful," said Nancy Rhead, a member of the county's Housing and Community Development Board, which heard from Vaughan at a meeting Thursday night.

Michael G. Riemer, another board member, asked if the building would fit in with Emerson's high-end appearance.

"Anybody who's been to Emerson knows it is high, high, high-end," Vaughan replied, explaining that he expects the building to be superior in design and construction.

But the county has no legal power over General Growth because the moderate units are a voluntary, self-imposed program of the builders. Neither Emerson nor the nearby Maple Lawn mixed-use project have enough density (homes per acre) to trigger the county's moderate-income housing law.

Vaughan said he is searching for affordable land for the 100 units of moderate-income homes promised for Maple Lawn. The county Zoning Board allowed the developer to avoid building the homes in Maple Lawn itself, but to provide the county land to build them elsewhere - probably along the U.S. 1 corridor.

Another case in point is one moderate-income townhouse in Cherrytree Park, where a woman who bought a unit in August 2004 sold it back to the housing commission last month to move to Virginia - and made a $112,000 profit - roughly a 50 percent return, according to Vaughan. Inflation drove the price of homes at Cherrytree from $240,000 to $470,000. That means that although the first buyer paid $118,700 for the house, the next one must pay $220,000 or more.

To prevent that, Vaughan said, he wants a rule change to cap buyer profits from inflation for a set number of years.

"This is like winning the lottery," Vaughan said. "We don't want to create a windfall situation," he added, noting that no one envisioned such steep price increases for homes when the program was conceived.

Property taxes are another big problem, because, as Vaughan pointed out, even if the purchase price is subsidized, paying taxes on an expensive home can make any unit unaffordable.

Vaughan told the board he is seeking County Council legislation that would reduce property tax bills for moderate-income home buyers. Instead of owing taxes on the full value of the house, buyers would pay only for the percentage of the building they own - usually 51 to 60 percent. The nonprofit county housing commission owns the remaining portion.

Another bill expected for council consideration would allow builders required to construct moderate-income units to change from single-family dwellings to more-affordable townhouses or from townhouses to apartments - but only if they provide a bonus number of units. Instead of 100 townhouses, for example, the county might get 150 apartments.

The bill would also define a new category of subsidized housing called "middle-income housing," Vaughan said, but would not actually implement a program to build those units. Middle-income homes would be for families with household incomes from about $60,000 to $100,000 a year. Those homes could come into use as part of the downtown Columbia master plan now being developed.

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