Md. acts to keep homes available

$75 million will go to halt decline in rental housing

November 29, 2007|By Jamie Smith Hopkins | Jamie Smith Hopkins,SUN REPORTER

It is a continual lament of affordable-housing advocates: Not only are there too few apartments for low- and moderate-income people, but every year some deteriorate or disappear - converted from subsidized to market-rate rentals.

The state Department of Housing and Community Development has $75 million it intends to put up next year to attack that leak.

The department, which announced the effort yesterday at the Governor's Annual Housing Conference at the Baltimore Convention Center, said the money represents nearly half of the tax-exempt bonds it can issue next year for affordable rental housing. It will use the money to refinance current owners or finance deals for new buyers, for-profit and nonprofit. In all cases, the units will be renovated to bring them up to date.

Many subsidized rentals in Maryland are 15 to 20 years old. Not only do they need work, they're at or near the point that their owners can opt out of the subsidy and switch to higher, market-rate rents.

Statistics on the number of affordable rental units in Maryland were unavailable yesterday, the department said.

"This is really a proactive move to make sure we don't lose what we do have," said Bill Ariano, deputy director of the housing department's Community Development Administration. He said it is the state's first large-scale preservation effort "because this is the first time we've really seen this kind of potential problem looming."

State officials said they don't yet know how many rentals they could save with the money because acquisition and renovation costs can vary so widely. The expense of fixing up a rental can range from $15,000 to $40,000 a unit.

The National Housing Trust in Washington estimates that 2 percent to 3 percent of the country's subsidized housing is lost every year to market-rate conversion or to deterioration and abandonment. It estimates that happened to nearly 11,000 units in Maryland from 1995 to 2006.

Many states are trying to fight the problem, but few have earmarked tax-exempt bonds as Maryland has decided to do, said the trust's president, Michael Bodaken.

"New construction is important, but it's not the only way to solve our housing dilemma," Bodaken said. "In fact, I would say preservation is the important first step."

Raymond A. Skinner, the state housing secretary, said it is his priority because he does not want the state to lose ground. It can't afford to. Maryland's affordable-rental shortage, which was under 100,000 units in 2000, will rise to more than 150,000 units by 2014 if the number of subsidized rentals remains steady, the department estimates.

"We're looking at ways that we can make a dent in that number," Skinner said.

The state will take preservation applications from across the state but intends to focus on communities affected by the military base realignment and closure process, known as BRAC. The state expects that thousands of people will move into the Baltimore area in the next several years to take government and contractor jobs being moved here from out of state.

"We're always at risk for losing our affordable housing, and so having the state set a priority for preserving affordable housing in those areas that are slated to see significant growth will be very important," said Chickie Grayson, president of Enterprise Homes, part of affordable-housing giant Enterprise Community Partners in Columbia.

She expects that a number of organizations - including Enterprise - will be interested in participating.

"It's really good for the tenants because they get their apartments spiffed up, and it's really good for the owners, because they can ... put in new heating and cooling systems that reduce the operating cost of the property," Bodaken said.

jamie.smith.hopkins@baltsun.com

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