Loudoun Supervisors Look to Loan Program to Spur Affordable Housing

The county government will develop a revolving loan program to help get more affordable housing off the ground.

That was a key action resulting from the Board of Supervisors’ “housing summit,” held Monday night.

Loudoun has a Housing Trust Fund, currently holding about $26.8 million. But the county has limited ways to get money in and out of the program—money comes in through cash contributions from developers in lieu of meeting Affordable Dwelling Unit requirements, or through the sale of homes in that price-controlled program when they age out and are sold at market value.

It is used to promote affordable housing in the county, including by purchasing those same housing units to keep them in the program, but supervisors are wary of spending it down faster than money is coming in.

Now, the county will try something that has been used elsewhere to help finance affordable housing: a revolving loan program, in which money loaned out from the fund is paid back and then recycled for future loans.

Supervisors approved a $3 million, 30-year loan from the fund for the first time earlier this year for an affordable housing project at Stone Ridge.

They will also go to work on changing county zoning ordinance to incentivize developers to build affordable housing—or just remove barriers to it. That could include taking another look at reducing minimum lot sizes and yard requirements and opening some properties to the construction of accessory dwellings, such as a mother-in-law suite. County planners will try to encourage more compact units on smaller lot sizes, with more flexible development standards.

Monday’s housing summit brought together representatives from industry sectors ranging from development, to conservation, to real estate, to health care. Several people addressed the board to talk about how critical and complex Loudoun’s affordable housing problem is.

Organizations like the Dulles Area Association of Realtors, the Northern Virginia Building Industry Association, and the Loudoun County Chamber of Commerce said the county needs homes for people at every income. And the county’s Economic Development Advisory Commission joined a chorus of voices casting Loudoun’s housing problem as a barrier to economic growth.

“Lack of attainable and desirable housing is adversely impacting many of our existing businesses, and may affect our ability to retain these businesses if the issue is left unaddressed,” said commission Chairwoman Sharon Virts. She said in preparation for the summit, the commission gathered input from across every sector of the economy, along with organizations like Visit Loudoun, the CEO Cabinet, and the Rural Economic Development Commission.

“The response was overwhelmingly consistent,” Virts said. “The Loudoun business community is struggling to attract and retain workers due in large part to the lack of attainable, affordable housing options in the county.”

A comprehensive primer on housing prepared in collaboration among several county departments reports on several specific cases, such as Cuisine Solutions, a food manufacturer in Sterling that spends $1 million a year in van pool services, car pools, and other transportation to transport employees to and from Winchester, Prince William, Manassas and Fauquier counties.

Others, like Gretchen Greiner-Lott of the Washington Regional Association of Grantmakers, pointed to the impacts of high-cost housing in other areas, like health.

“For instance, when people have high housing payments, they have less money to pay for nutritious food or good quality medical care,” Greiner-Lott said. “… Sometimes it is a person’s house itself that make a person sick, if it exposes them to toxins like lead, or insect and rodent infestations.”

Stacey Miller Metcalfe, of Inova Loudoun Hospital, agreed that the cost of housing isn’t just a problem for the business of the hospital, but possibly for the care.

And G. Kimball Hart of the Windy Hill Foundation, Loudoun’s only active, dedicated affordable housing developer, said part of the problem is the regulatory environment.

“The marketplace will not provide workforce housing on its own without incentives,” Hart said. “…The price of land here is too high. The only way you do it is with incentives. So far, Loudoun County has a big stick and a little tiny carrot.”

“Affordable housing starts with affordable financing,” agreed Jim Edmondson of E&G Group, another developer of affordable housing in the DC region. “I can’t rent units for a thousand dollars that cost hundreds of thousands of dollars to create.”

Disagreements on the supervisors’ dais highlighted the complexity of the problem.

Supervisors Suzanne M. Volpe (R-Algonkian) and Ron A. Meyer Jr. (R-Broad Run) saw the housing problem as a reason to approve more rezoning requests from developers.

“Part of this is just plain and simple: it’s supply and demand,” Volpe said. “So, we get to that plain fact and are able to explain it to our residents across the county, that yes, you enjoy living here, but if we hadn’t let a developer build your house, you wouldn’t have a place to live. And that person that mows your lawn, or takes care of you at the checkout line in the grocery store, they need a place to live, too.”

Meyer brought up an application by One Loudoun to build 685 apartments and 40 townhomes. Supervisors denied that application, then reconsidered it and approved a scaled-back version with 200 apartments and 40 townhomes.

“I’m really concerned that we’re spinning our wheels, because I think there’s very little political will—much less will of the public—to actually identify sites we’re actually going to build anything on, as far as residential,” Meyer said. “The few applications we’ve had before us, we’ve either minimized the amount of residential or cut it out altogether.”

Meyer grew argumentative, exasperating County Chairwoman Phyllis J. Randall (D-At Large) and cutting her off. She thanked him for his passion, which she said he comes by honestly. Meyer said he’s experienced housing instability and even homelessness as a child of a single mother.

“I don’t think you’re alone in caring about this issue, though,” Randall said. “In fact, I can assure you you’re not alone. Just because I’d like to see affordable housing in the county doesn’t mean every single application that may have affordable housing is appropriate for that place at that time.”

And board Vice Chairman Ralph M. Buona (R-Ashburn) said this is another problem that can be traced at least in part back to a law the General Assembly passed in 2016 restricting proffer agreements between developers and localities—one of the most important ways Loudoun gets affordable dwelling units built or checks written to the Housing Trust Fund. Although Loudoun has devised a workaround to keep negotiating proffers in much of the county, Buona pointed out the county has had no large rezoning requests since the law was changed.

“So again it comes back to, no rezonings, no ADUs (affordable dwelling units),” Buona said. “And yeah, we have to be willing to approve rezonings, but we’re not even getting asked for rezonings.”

According to the housing primer, the median income in the DC area for a household of four is $110,300. The U.S. Department of Housing and Urban Development considers area households making $88,240 or less to be low-income—and in Loudoun, 48 percent of the workforce makes only half that. That amounts to almost 78,000 people with jobs in Loudoun making $44,120 or less.

About 44 percent of Loudoun’s workforce commutes in from outside the county daily, mostly from cheaper places to live. And wages are far from keeping up with housing costs—since 2000, the median income for the DC area rose by 25 percent, while the median home price in Loudoun more than doubled.

The report also shows the median Loudoun family cannot afford the median-priced Loudoun house. The rule-of-thumb measure for what house a family can afford—three times their household income—has the median household with a budget for a $330,900 house. In Loudoun, the median house sale price in 2017 is $469,500.


One thought on “Loudoun Supervisors Look to Loan Program to Spur Affordable Housing

  • 2017-10-19 at 12:12 pm

    This is a multidimensional issue affecting more than just Loudoun County. The entire region and country is affected by the need for affordable housing. Within this discussion, the terms affordable housing and workforce housing are used interchangeably, when in fact, they are two distinct concepts. Affordable housing is a government sponsored program whereas workforce housing is low cost housing serving a segment of the housing market.

    Truly missing in this discussion is the fact that the unemployment rate in the region and nation is low. Loudoun County has one of the lowest unemployment rates in the region at 3.1% creating tough competition for the workforce at all levels. None of the groups cited in the article spoke on behalf of the residents. Residents have overwhelmingly said there is too much traffic and schools are overcrowded. The constant Loudoun County School Shuffle has continued for decades and has no signs of slowing down.

    Giving bonus density and incentives to the private sector is akin to giving them more profits meanwhile the county assumes the cost of that bonus density and incentives as long term debt. This long term debt builds the schools, roads, fire stations, and libraries. In the end, the new home owner (who paid full price) and taxpayers assume this cost and the private sector moves onto another project. The county needs to evaluate the cost of a more direct approach compared to the indirect private sector cost. What is the trade-off of providing a low cost loan to a teacher versus providing a higher salary for the same teacher? Should local government subside loans for the business workforce? If so, at what cost to the taxpayer?

    While 56% of Loudoun’s workforce lives in the county, 44% are not “forced” to commute into Loudoun. Life choices play a significant role in where people choose to live. There might also be a relationship between low-wages and the difficulty in finding housing. And yet, businesses are looking to the government for solutions.

    Supply and demand is a critical issue and it is currently creating a market for $800,000 town homes. With a strong demand, builders have become very efficient at building housing and are consuming undeveloped land at a phenomenal rate in Loudoun County. So fast that Loudoun County can’t keep up with the needed schools, roads, and services. At some point the undeveloped land will be gone and the push will be on for building in the Rural areas of Loudoun County.

    Adding more supply will stagnate or erode the value of existing housing and potentially erode revenue for the county. Where is that pivot point? At what cost to the county? More housing also creates more demand for services, schools, and roads. A balanced approach to growth is vital. The common solution to affordable housing is to build higher density. Managing the impacts of the associated higher density is critical to providing and maintaining a higher quality of life for all county residents. Access to realistic transportation solutions can reduce this impact. Transportation continues to be the biggest concern of residents and building high density housing in the Transition Policy Area or the Rural Policy Area would exacerbate these transportation challenges in the county. Right now, there are currently over 26,000 approved and unbuilt residential units in Loudoun County. 26,000 x 4 = 104,000 more residents. How many more schools and roads need to be built to accommodate that growth?

    Trade groups are spending tremendous time and money trying to convince the board the county has a housing crisis. The county has experienced fantastic economic and residential growth under the the current plan. Something to be said about the tried and true. The residents don’t have trade groups and must rely on volunteers to address the concerns of residents. We need our elected officials to fully represent the residents. The county supervisors have some tough decisions ahead. Simply building more is not one of them.

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