Low-cost housing plan moves toward OK

Proposal would spread such residences to all city neighborhoods

April 19, 2007|By JILL ROSEN | JILL ROSEN,SUN REPORTER

After months of political push and pull between developers and affordable-housing advocates, a revised version of a bill that would mix lower-cost housing into all Baltimore neighborhoods seems to be on the approval track.

Yet no one is truly happy with the bill, which goes before the Planning Commission tonight. The politically connected coalition fighting for the initiative worries that there is not enough money behind it, while homebuilders say it is misguided to force developers to include affordable units.

The "inclusionary housing" bill would require new residential projects of at least 30 units that take city subsidies or benefit from a significant rezoning to make a certain percentage affordable. The goal is to prevent Baltimore from becoming a Washington or a San Francisco, where even some white-collar professionals can no longer afford homes.

"Ordinary working families need to be in the room where development is being discussed," said Michael Sarbanes, executive director of Citizens Planning and Housing Association, who has been leading a regional affordable-housing effort. "Other cities have come to this issue too late."

The legislation on the table is substantially weaker than what was introduced last winter. Though the original bill would have required affordable units be built into all residential projects, the revised version would immediately apply only to developers getting tax breaks or discounted land from the city.

The subsidized builders would have to reserve 20 percent of their projects' units for low- to moderate-income residents.

After a year and a half, the bill would apply to developers who benefit from rezonings. They would have to make 10 percent affordable.

The measure would expand to include projects not receiving subsidies or zoning changes only if most of the houses in the city's market become unaffordable under an equation to be determined as part of the bill.

Those in the real estate business who have been working with the city to draft the legislation question the need for it in Baltimore, with its substantial stock of inexpensive housing, though not necessarily in the best neighborhoods.

"I think that the politicians have come under a lot of pressure from the housing advocates and have caved into their demands even though a bill like this is not necessary," said Andy Freeman, director of business development for the Harborview waterfront project in South Baltimore. "This is way before its time."

In Maryland, the only other jurisdictions with similar affordable-housing requirements are Montgomery and Frederick counties.

Andy Frank, Mayor Sheila Dixon's deputy mayor for development, said the original bill could have chilled Baltimore's real estate momentum and therefore wouldn't have resulted in new affordable units anyway.

"If the bill had the impact of choking off development or redirecting development, we would not be increasing our housing stock," he said. "Twenty percent of zero is zero."

The new bill won't impede growth, Frank said, mainly because developers would be compensated for the lower-cost units with money from a new "affordable housing trust fund."

As originally drafted, the bill would have created a long-term cash stream for the trust fund, which voters endorsed on the Nov. 7 ballot. With 20 percent of the city's transfer tax, the coalition promoting the bill thought they would have about $10 million to work with annually.

The coalition will have to make do with considerably less and hope that city leaders find trust fund money in the budget from year to year.

For fiscal 2008, which will be the first year for the program if the bill passes, the budget allocation is expected to range between $1 million and $3 million, Frank said.

"Obviously, the more money you have, the more you can do, but this gets an inclusionary framework clearly set," said Sarbanes, who said the program will be effective only with a substantial bond offering.

Freeman and other developers call the new bill "somewhat more palatable." But he, too, said he doesn't think the trust fund will have enough money to significantly increase the city's low-income housing stock.

Mark Shapiro, principal of the Shapiro Co. real estate business, called mixed-income housing a noble goal for the city but said developer incentives - rather than requirements - are the way to make it happen.

He also said he doesn't think the money should come from the city's general budget, forcing taxpayers to "subsidize putting lower-income people in high-income neighborhoods."

"We don't have an affordable housing problem here," he said. "Let's slow down a little bit."

The coalition pushing the bill, composed of religious groups, urban advocacy organizations and unions that together hold much political sway, says the bill is a good place to start, particularly because similar efforts failed in 2005 and seemed headed for trouble late last year.

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