Tag: affordable housing

How housing (or lack thereof) affects our economy

By Gary Bennett and Hugh Gordon

Sharpe Square affordable housing units in Frederick

This article appears in the January 12, 2024 issue of the Frederick News-Post.

As the largest monthly expense for just about all of us, it is no surprise that housing plays an outsized role in our regional and national economy.

First, there is the robust construction industry and all it employs.

We see the workers every day as we make our way around Frederick. It is no surprise that housing construction and allied trades are a large economic engine for most localities, including Frederick County.

Nearly 10% of employees in Frederick County work in the construction and allied trades industry. It is one of the largest industries in our diverse local economy. Any disruption in the construction industry, or any of our top industries, would be harmful to Frederick’s overall economy.

Second, there is the menace of inflation.

The wide gap we see now in the supply of and demand for housing that has driven up housing prices to historic levels had its origins in the recession of 2007.

Later, supply chain woes caused by the COVID-19 epidemic in 2020 drove up the cost of housing even more. The lack of balance in the housing market and the higher prices that come with it have been a major driver of inflation.

Even as food and fuel prices begin to moderate, housing prices remain stubbornly high. Mortgage interest rates that rose exponentially over the past year have only cooled demand slightly.

Rents remain artificially high, too, as folks get priced out of the home-buying market and increase competition for rentals. It seems clear, and most experts agree, that the best way to make a meaningful and long-lasting dent in inflation in the U.S. is to create more moderately priced housing.

Thirdly, our current lack of affordable housing may have a profound economic impact on the future if it’s not proactively addressed.

Research has shown that increasing access to affordable housing is the most cost-effective way to reduce childhood poverty and increase economic mobility in America. If we can somehow condition ourselves to take the long view on increased affordable housing instead of focusing on the short-term problems that can be solved with government action and political will, society will be better off.

In a large multi-year study, Stanford economist Raj Chetty found that children living in stable, affordable homes are more likely to thrive in school and have greater opportunities to learn inside and outside the classroom. Children who moved to lower-poverty neighborhoods saw their earnings as adults increase by approximately 31% and had an increased likelihood of living in better neighborhoods as adults.

Indeed, the lack of safe, affordable housing is costing U.S. cities in many ways we don’t always see. It forces families to live far from work, increasing their carbon footprint. It lowers tax bases that fund the amenities we take for granted. And, perhaps most painfully, we lose potential workers and customers that keep our local businesses thriving.

You don’t have to look any farther than our Maryland neighbor to the west, Cumberland in Allegany County, for a discouraging example.

Cumberland has long embraced a very slow-growth housing policy. With little excess housing stock, Cumberland cannot grow.

Young people who may want to stay cannot find entry-level housing. Older folks who wish to sell their large family homes in hopes of downsizing to a smaller, more manageable home cannot find buyers or more modest homes to move to.

Businesses that come to town cannot find appropriate housing for their employees. It is a self-fulfilling cycle that Cumberland has found itself in for years.

Prosperity for the Frederick region depends on decisive action now to make sure our housing stock meets the needs of the future.

We are pleased to see both Frederick City and Frederick County taking steps to make building moderately priced dwelling units more appealing to developers, and if they don’t build them, a revenue base so government can fund affordable housing programs.

For Fredrick businesses to grow and stay vibrant, they need more customers and reliable workers who have housing. To succeed, Frederick County must remain a diverse place where all people have decent, safe, affordable places to live in thriving communities.

Editor’s note: Gary Bennett is a retired marketing executive. Hugh Gordon is the association executive for the Frederick County Association of Realtors and has decades of experience in the real estate world, including 24 years as a mortgage banker. They are longtime Frederick County residents and members of Frederick’s Affordable Housing Council.

How did we get in this affordable housing mess (Part 2)

By Gary Bennett and Hugh Gordon

This article appears as an opinion column in the Saturday, December 9 issue of the Frederick News-Post

In our column of Oct. 21, we discussed the overarching supply-and-demand cause for the nationwide affordable housing shortage and the role that single-family-only zoning plays in exacerbating this shortage.

In this column, we look at other limiting factors for building affordable housing and some possible solutions.

***

Single-family-only zoning is one way local zoning boards limit how much housing can be built.

Many places also employ height restrictions. Some areas are zoned for multifamily buildings, but don’t allow any building over two stories high. This drives down supply.

Parking requirements are often written into zoning laws, too.

Many laws require two parking spaces for each unit of multifamily housing. A 100-unit apartment complex would need 200 parking spots. This usually means buildings of that size don’t get built.

Builders must lower the number of units to save space for parking, even in areas with effective transit systems. Those units become more expensive because the land is still the same cost to the developer. What could have been reasonably affordable units become units for those with higher incomes.

Another feature of many zoning laws is minimum lot sizes. Builders are legally required to allot land for each home, often a large amount.

These “exclusionary” zoning laws push builders to focus on bigger luxury homes instead of smaller starter homes or multifamily homes.

Zoning boards are essentially only allowing people who already benefitted from the wealth of this country — who built their incomes with access to high-opportunity jobs and education and generational wealth — to live in neighborhoods.

Historically, some of the first zoning laws in our country were engineered to block people of color, particularly Black Americans, from living in predominantly white neighborhoods. This was known as redlining.

Today, laws don’t explicitly mention race, but they continue to worsen segregation. In most municipalities, the more single-family zoning for a neighborhood, the whiter it is.

Shrinking the pot of new housing getting built, while demand keeps rising, drives up the cost of housing for everyone.

The old code phrase “changing the neighborhood character” gets thrown around.

People are confused when they hear that affordable housing is coming to their neighborhood. They say they don’t want giant apartment buildings.

And they’re right — not every neighborhood should have giant apartment buildings. But affordable housing is much more than that.

Even small gradual changes to zoning laws can have an impact.

For example, allowing smaller homes on smaller lots, or simply allowing duplexes, would double available housing in some areas. In recent years, cities like Minneapolis took the huge step of ending single-family zoning.

Increased automation of the construction process can help, too.

There’s some innovation now with modular construction and 3D printing, but productivity growth is slow. States can help by mandating that manufactured housing is permitted housing in any zoning code.

The federal government isn’t blameless, either. Many incentives have been written into the tax code to encourage home ownership over other asset classes as our country’s primary wealth-building mechanism.

Most American homeowners expect the sale of their home to finance a large part of their retirement. This means property values must be maintained at all cost.

The Biden administration is attempting to help at the federal level by tackling exclusionary zoning through a $5 billion program to give money to localities that remove exclusionary zoning policies. This is more than any presidential administration has done on this topic.

Help may be on the way from Congress, too. A bipartisan bill called the Build More Housing Near Transit Act has been reintroduced to encourage construction of new homes, including low- and middle-income homes, in transit-served, walkable communities.

The act would incentivize local governments to promote building new homes in and around transit corridors. The bill adds pro-housing policies to existing law, so local governments will be incentivized to make the following changes near transit corridors:

• Eliminate parking minimums

• Establish by-right permitting for projects that meet objective standards

• Reduce minimum lot sizes

• Create and preserve homes affordable to low-income households

• Raise or eliminate height limits

Ending America’s housing shortage will require real political willpower. And it will take people across the country taking a hard look at their own neighborhoods and understanding what gets built and who gets excluded, and how to make home ownership achievable for millions who are shut out.

Editor’s note: Gary Bennett is a retired marketing executive. Hugh Gordon is the association executive for the Frederick County Association of Realtors and has decades of experience in the real estate world, including 24 years as a mortgage banker. They are longtime Frederick County residents and members of Frederick’s Affordable Housing Council.

How did we get in this affordable housing mess?

By Gary Bennett and Hugh Gordon

This article appears in the October 21, 2023, issue of the Frederick News-Post.

As members of the Affordable Housing Council in Frederick County, we spend lots of time looking at houses on Zillow, Redfin, Realtor.com and The Frederick News-Post.

This is no news to anyone, but we can assure you that houses are more expensive than ever. Here in the Baltimore/Washington, D.C., region, it’s shocking.

In Maryland, according to Zillow, more than half of all buyers in June 2023 paid above list price for their home. Buyers are paying, on average, 1 to 2 percent above asking price now.

That may not sound like a lot, but on a $500,000 home, that may be another $10,000. One Realtor friend told us that for one of her listings, there were 32 offers, all above asking price. That means 31 unhappy, unsuccessful home seekers.

Renters have it no better.

In Maryland, the National Low Income Housing Coalition has found that a renter working 40 hours per week and earning Maryland’s minimum wage of $13.25 per hour must work 79 hours each week to afford a modest one-bedroom apartment and not be cost burdened (not spending more than 33% of income on housing costs).

But it’s not just Maryland and the D.C. area. The lack of affordable housing is a nationwide problem. Over the last couple of years, we’ve seen housing prices reach a level they’ve never reached before.

According to the National Association of Realtors, the median price for a house in America is now $414,000. That is the second highest median price recorded, after June 2022.

In Maryland, it’s worse. Maryland Realtors, a nonprofit membership organization, reports the average sales price in Maryland is up more than 3 percent from last year to over $486,000. Our proximity to Washington, D.C., has a lot to do with this.

That price may not sound like a lot for this region, but keep in mind it includes all areas of Maryland, rural and urban. Those prices make rents more expensive and home ownership unobtainable for millions of Americans.

How did this happen, and how can we fix it?

We can think of today’s exorbitant housing prices as a result of a supply and demand problem. The housing supply isn’t matching demand.

On the demand side, there has been a generational shift in who is buying homes. Millennials are now the largest generation in American history, and they are aging into their prime home-buying years.

On top of that, until recently, 30-year fixed-rate mortgages were at an all-time low, which meant it was relatively cheap to borrow the money to buy a house. That enticed people to buy if they could, making demand for houses even greater.

Over the last two years, interest rates rose past 7 percent, but because of low inventory, that has yet to substantially cool demand in the housing market.

From 2010 to 2019, there were fewer homes built in the U.S. than in any decade since the 1940s. In particular, the construction of smaller, entry-level homes, for first-time home buyers, has dropped more dramatically.

In the 1980s, those “starter” homes made up about 40 percent of homes built. Today, it is closer to 8 percent.

Currently, the National Association of Realtors says the U.S. is down anywhere from 5.5 million to 6.8 million starter homes needed to satisfy demand.

Moreover, according to Pew Research in 2021, 55 percent of adults under age 30 said the lack of affordable housing is a major problem, up from 39 percent in 2018.

This housing shortage drives a big part of the problem for renters and prospective homeowners. It is worse where demand is highest, such as near good jobs, transit and schools like Frederick.

One straightforward solution is to simply build more affordable homes in desirable places. For years, however, there has been one big obstacle — builders aren’t allowed to.

Zoning or local regulations that decide where things can be built overwhelmingly favor single-family homes over multifamily homes. Zoning boards have banned the ability for anyone to build anything other than a single unit of housing on that land.

In many towns, zoning boards exclude all types of multifamily housing from their neighborhoods.

And not just large apartment buildings. Things like duplexes and fourplexes are illegal on most residential land in many American cities.

Single-family housing is the law in 70 percent of Minneapolis, 75 percent of Los Angeles, and 84 percent of Charlotte, N.C., to name a few. This is a huge determining factor for the housing shortage in the U.S.

We need states to step in and preempt municipalities from enacting and enforcing land-use restrictions that raise housing costs. Land-use control is constitutionally guaranteed to states, not municipalities.

States often delegate the authority to municipalities. But they can and should take it back when cities don’t use it for public benefit.

Gary Bennett and Hugh Gordon are longtime Frederick County residents and members of Frederick’s Affordable Housing Council.

Affordable Housing: Frederick’s seniors on the front lines

By Gary Bennett

The Sharpe Square senior living apartments on Motter Avenue in 2020.
Staff file photo by Bill Green

This article appears in the May 31, 2023, issue of the Frederick News-Post’s “Prime Time” magazine.

As we all know, we live in a very high cost-of-living area. Our incomes, however, have not kept pace.

In 2020, United Way of Frederick County completed its ALICE (Asset-Limited, Income-constrained, Employed) report. It is almost inconceivable, but they found that a third of our families really can’t afford to live here.

The struggle is even worse for seniors.

According to the same report, 47 percent of those 65 or older have difficulty living in Frederick County and must make tough choices every day on how to juggle paying for medicine, housing, taxes and food.

Housing, as virtually everyone’s largest individual expense, drives this struggle. It is no secret that finding safe, decent and affordable housing for many seniors is often a challenge.

Retired Frederick County school teacher Judy Kendro shared her struggle in the 2018 video The Faces of Affordable Housing [https://www.youtube.com/watch?v=ixwW4onCtUk] produced by Frederick County Government.

“My story could be anyone’s story. It could be you mother’s, your aunt’s, your sister’s, your friend’s, your neighbor’s or even you. My story happens to numerous seniors every month.”

“Three years ago, my best friend, my husband of 44 years, died. While grieving, I had to deal with paperwork, bills, medical bills and finances. My income was cut in half. Then, Uncle Sam said now you are one, which further reduced my income. However, my bills remained the same. In fact, some went up like heat, gasoline, car insurance, taxes and medical insurance. I had to adjust to a new lifestyle and budget.”

“After a year I found that my family house was too big for little old me. So, I did some looking around on my own and then contacted realtors. I thought it would be easy to find desirable, affordable options for senior living in Frederick County. Boy, was I wrong! What I have seen in Frederick County is out of my price range which affects my budget. Or, [I’ve found] fixer uppers, which affects my budget.”

“I am disappointed and discouraged but still looking. So, we need to address affordable, desirable housing for all our seniors and the baby boomers who are becoming seniors.”

Ms. Kendro’s story is not unique.

Frederick County is woefully behind in its housing inventory to serve all who want to live here, and that is especially true for seniors. According to the 2016 Frederick County Affordable Housing Needs Assessment, the housing gap for households making $50,000 per year or less— where most retirees fall—is 11,000 units.

The older population is projected to grow rapidly, and although many seniors wish to remain in their homes for as long as possible, challenges related to affordability, accessibility, and poor access to health services can make doing that difficult.

All is not doom and gloom, however. Seniors do have some affordable housing options they should consider, if at all feasible:

  • Stay in your own home

This option works well if you are in good health and plan to stay that way. Even if your mortgage is not paid in full you can consider a reverse mortgage, which means you can take some of the equity out of your home in the form of additional monthly income. Or you can consider selling your home to a company like Sell2rent.com who will rent it back to you and possibly include home maintenance as part of the deal.

  • Live with family

    Sharing a home with loved ones if often free or low-cost and has the added advantage of having family members around to help you when needed. Both Frederick city and county have revised their Accessory Dwelling Unit ordinances to make it easier for “granny flats” or “in-law suites” to be built.
  • Look into public or subsidized senior housing

    The U.S. Department of Housing and Urban Development (HUD) offers affordable public housing apartments and even single-family homes for seniors in need. They often come with accessibility features and are priced at 30 percent of your income. Be forewarned, however, that wait lists are often very long, sometimes months or even years.
  • Consider assisted living and residential care options

    This is a good option if you need help with daily activities such as bathing and getting dressed. These facilities offer meals, activities, and help with medication. The average cost across the U.S. is $4,000 a month but the price in Maryland is often more. Frederick offers many reputable facilities:
  • Buckingham’s Choice
    • Country Meadows
    • Edenton
    • HeartFields
    • Homewood at Crumland Farms
    • Montevue
    • Record Street Home
    • Somerford House & Place
    • Spring Arbor
    • Sunrise
  • Tranquility 

    Take advantage of government assistance

    • Low-income seniors can qualify for HUD’s Section 8 Housing Choice Voucher program, which helps people afford their rent.
    • HUD’s Section 202 Supportive Housing for the Elderly program provides rental assistance for older adults.
    • The Section 504 Home Repair Program helps pay for repairs and upgrades to your home so you can age in place.
    • The Low-Income Home Energy Assistance Program helps cover the cost of heating and cooling your home.

      Ask for help from charitable organizations

      • Several nonprofits are available to help qualifying seniors such as Good Samaritan Society, HumanGood, Mercy Housing and Volunteers of America. 
    • In the Frederick area, check out Habitat for Humanity, Housing Authority of the City of Frederick, Interfaith Housing Alliance, Religious Coalition for Emergency Human Needs, and United Way of Frederick County.

Frederick County also offers a variety of housing programs seniors can take advantage of. (This may not be a complete list.)

  • Frederick County Senior Tax Credit

    Enacted by the Board of County Commissioners in 2012, the amount of the credit is 40% or 20% of net county real property taxes for qualifying homeowners depending on income.
  • Bell Court Senior Apartments

Owned by Frederick County and located in Woodsboro, the apartments provide affordable rental housing for the low-income elderly.

  • Accessible Homes for Seniors

    Offers seniors low- and no-interest loan options for home renovations such as grab bars, railing and ramps and has recently been expanded to include grant money for those who do not qualify for the loans.
  • Maryland’s Renters’ Tax Credit Program

Provides property tax credits for renters who meet certain requirements, with deeper subsidies available to those individuals over the age of 60 or 100% disabled.

  • Senior Rehabilitation Grant Program

    This program provides grants up to $15,000 for emergency repairs and accessibility modifications to very low-income senior homeowners.
  • Emergency Rehab Loan Program

    Provides zero interest, deferred loans up to $15,000 for emergency repairs.
  • Special Targeted Applicant Rehabilitation Program (STAR)

    Preserves and improves single-family properties by rehabilitating the property and updating it to applicable building codes.
  • Lead Hazard Reduction Grant and Loan Program

    Provides funds to assist homeowner and landlords lessen the risk of lead poisoning and preserve the housing stock by reducing or eliminating lead-based paint hazards.
  • Indoor Plumbing Program (IPP)

Designed to provide indoor plumbing to residential properties. The properties may be single-family, owner-occupied homes as well as rental properties with one to twenty units.

Frederick County offers many apartment housing options geared to seniors. Some are county-funded and some are privately funded:

  • 520 North Market Apartments, 520 North Market Street
  • Brooklawn Apartments, 1001 Carroll Parkway
  • Brunswick House, Brunswick, MD
  • Catoctin Manor/View Apartments, 798 and 800 Motter Ave.
  • Creekside at Tasker’s Chance, 100 Burgess Hill Way
  • Lincoln on the Park Apartments, Emmitsburg, MD
  • Orchard Park @ Ballenger Run, 5234 Black Locust Drive
  • Ox Fibre Apartments, 400 East Church Street
  • Seton Village Apartments, Emmitsburg, MD
  • Sharpe Square Senior Apartments, 820 Motter Ave.
  • Spring Ridge Apartments, 6351 Spring Ridge Parkway
  • Parkview Apartments, 750 Carroll Parkway
  • Taney Village Apartments, 1421 Taney Avenue
  • Victoria Park, Walkersville, MD
  • The Village at Worman’s Mill 55+ Apartments, 2470 Merchant Street
  • Weinberg House, 222 Broadway Street

Gary Bennett is a member of Frederick’s Affordable Housing Council and a board member for Advocates for Homeless Families.