Introduction of RBC
Welcome to the first issue of Breakthroughs, an online newsletter
from the Regulatory Barriers Clearinghouse (RBC). Breakthroughs
highlights success stories from around the nation about communities
that are removing barriers to affordable housing.
The American Homeownership and Economic Opportunity Act of 2000
called for the creation of the Regulatory Barriers Clearinghouse
to collect and disseminate information on state and local barriers
to affordable housing and solutions proposed and achieved.
In addition to this online newsletter, the RBC
Web site provides:
- A searchable database
of exclusionary, duplicative, or otherwise unnecessary local laws,
regulations, policies, plans, and practices that create barriers
to affordable housing. More importantly, the database provides
activities, strategies, publications, policies, and practices
that help reduce or overcome barriers along with any negative
impacts encountered.
- A toll-free number (1-800-245-2691, option 4) staffed
by housing professionals familiar with regulatory barrier issues
and the collection of clearinghouse materials.
- An eList and a discussion board
that keep users informed and encourages practitioners to share
information on overcoming the barriers to affordable housing.
HUD's goal is to make RBC your one-stop shop for up-to-date information
on the regulatory barriers to affordable housing and on innovative
ways of overcoming those barriers in your community. In addition,
HUD is committed to forging partnerships that will help communities
identify and remove current impediments.
By assembling and disseminating information from practitioners
in the field, we are creating a network for sharing information,
resources, and successful practices. Materials being collected from
the field include:
- Information for inclusion in the RBC database about regulatory
barriers in States and localities where the government serves
a population of 100,000 or more.
- Strategies and plans to remove or ameliorate the negative effects
of regulatory barriers.
- State and local strategies, activities, and plans that promote
affordable housing and housing desegregation, including those
found to be particularly innovative or successful.
Breakthroughs will draw on this and other information. Each
article will highlight problems, challenges, and solutions from
communities that are committed to addressing the barriers to affordable
housing. The articles contained in this newsletter detail housing
density bonuses in Arlington, Virginia and Habitat For Humanity
activities in California. Each article has an icon linked to one
of ten RBC focus topics:
We hope you find the information in Breakthroughs both informative
and useful. By sharing your experiences, you can help us impart
a better understanding of the regulations that affect the production
of affordable housing and let others in on the lessons you've learned
along the way. With your help, we can overcome the regulatory barriers
to affordable housing.
Arlington Develops Affordable Housing
in Tight Market
What's a county to do? Fifteen percent density bonuses no longer
attract affordable housing developers. Arlington County, Virginia
faced this situation and turned to a new incentive—a larger,
25 percent density bonus for mixed-income housing developments that
include affordable units.
Arlington faces tremendous growth pressure. It is the Virginia
suburb closest to Washington DC, and has eleven Metro subway stations—each
with the capacity to significantly drive up housing prices in surrounding
neighborhoods, owing to the high cost of downtown parking and the
high quality of the Capital region's transit system. In many areas
luxury high-rises are rapidly replacing affordable housing.
Arlington officials began using 15 percent density bonuses in the
early 1980s. By the late 90s, the strategy was less effective. "It
became obvious that the 15 percent density bonus worked only when
combined with other County financial incentives," commented
Wayne Rhodes, director of Arlington's Office of Development. Developers
also found the County's financial incentive packages to be overly
complex. In addition, Arlington officials became increasingly concerned
that they did not have sufficient resources to continue providing
housing subsidies.
Density Bonuses for Mixed-Income Housing
To remedy this problem, the County went to the 2001 Virginia legislature
for permission to revise Arlington's zoning ordinance. As a result,
Arlington can now grant 25 percent density bonuses to mixed-income
housing developments, provided they contain units affordable to
low- and moderate-income persons. The zoning amendment is available
on the RBC database, or online
at http://www.co.arlington.va.us/cbo/2001/oct13/10.pdf.
In November of 2001, the County Board approved the first '25 bonus
points' project, Odyssey Apartments. A 300-unit, high rise in the
Courthouse Metro area is also under consideration.
Continue to Follow These Developments in Future Issues of Breakthroughs.
For further information on the density bonus program in Arlington
County Virginia, visit cphd@co.arlington.va.us.
Habitat Faces Challenges in Southern California
Habitat for Humanity South Bay/Long Beach faces a number of challenges
to affordable housing construction in some southern California communities
as it tries to keep the price of housing affordable to low- and
moderate-income homebuyers.
Habitat has encountered particular difficulties in Los Angeles,
which has laid out a critical action flow chart that details a 12-18
month process from first submittal of tract map plans to approval
of final plans. In many cases, Habitat believes it takes longer
than 18 months to obtain these approvals. Part of this delay is
based on the number of departments - 11 - that must review and approve
plans for development in Los Angeles.
"This is a challenge to affordable housing developers who
have to pay taxes, security, temporary fencing, and maintenance
on the property during this down time," says Erin Rank, executive
director of Habitat for Humanity South Bay/Long Beach.
Affordable Housing Design Criteria
Los Angeles has developed design criteria for affordable housing
that are in addition to building codes. For example, Habitat International's
standard for a 3-bedroom house is 1,050 square feet. Los Angeles'
design standards require a minimum of 1,300 square feet for the
same number of bedrooms. Other design criteria include master bedroom
closets with 10 lineal feet of space and front yards with sprinkler
systems.
Increasing land costs and development fees also impacts Habitat's
ability to provide affordable housing. According to Rank, many cities
are downsizing residential zoning to decrease density in neighborhoods.
"This action increases our land costs," says Rank, because
the lots we purchase must be larger." She references a survey
by her site selection department, which shows that the average per-lot
cost for land in the Los Angeles area is currently $55,000.
Impact of Additional Requirements
Fees and required improvements also impact the cost of affordable
housing. Habitat budgeted $7,500 per unit for permitting fees on
its last project, and ended up paying $13,000 per unit.
Los Angeles requires all developers—even affordable housing
developers—to pay for significant off-site improvements such
as street trees, fire hydrants, street lights, curbs and gutters,
sidewalks, cul-de-sacs, and street widening. The city has very specific
requirements about what kind of lights, trees, and inspections must
be used.
"We need to pay landscape architects to submit drawings, and
engineers to inspect the concrete manufacturing plant the day before
all of our pours," Rank said. "We have to special-order
street lights that take eight weeks to deliver. This held up our
Certificate of Occupancy. Our off-site costs on our last project
(26 homes) were close to $500,000; more than $19,000 per unit."
Regulatory Requirements Can Create Barriers
In many cases, the city provides low- or no-interest funding to
help pay for some of these requirements, but the regulatory requirements
of these funding sources often create further barriers. For example,
the city provides HOME funding to offset these predevelopment costs.
These funds are secured with second trust deeds, which increase
the house price. Unfortunately, the HOME program places a cap on
the sales price of homes assisted by the program, which sometimes
forces Habitat to choose between using the Federal money or not.
All State-funded affordable housing dollars (called set-aside funds)
carry a 45-year restrictive sale agreement that requires the seller
to repay the original subsidy plus a substantial portion of any
equity in the house to the State if the unit is not sold to a qualified
household. Habitat does not have a problem with the requirement;
it also requires a repayment if the house is resold within 20 years,
but feels the 45-year term is too long.
Overcoming Barriers
How does Habitat overcome these problems and continue to provide
affordable housing for low- and moderate-income people in the Los
Angeles area? Enlisting the assistance of the Mayor's office, Habitat
negotiated with the city to reduce some of the requirements contained
in the design criteria.
Habitat also sought to speed the approval process by hand-carrying
the development plans to each of the departments reviewing the plans,
rather than wait for each department to review the plans consecutively.
Habitat's project manager started calling each of the departments
daily to check on the status of the review. They also hired a consultant
to act as an intermediary with city departments. In future developments,
Habitat plans to request that the city designate a single point
of contact for the development process.
In some areas, Habitat has moved from building traditional single-family
detached housing to condominium townhouses, even while recognizing
that condo fees add to the monthly cost of housing. They are also
working with the legislature to reduce the term of the state's second
mortgage from 45 years to a more reasonable term.
For more information on Habitat's efforts in southern California,
contact Erin Rank at erin_rank@habitatlb.org
or 562-427-4663.
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