keys

News Room

Press

Nonprofits create $17M fund for affordable homes

By Joe Coombs
Washington Business Journal Senior Staff Reporter
Friday, July 27, 2007

Two nonprofits have teamed up to tackle the region's escalating shortage of affordable housing.

The Washington Area Housing Trust Fund and Unitarian Universalist Affordable Housing Corp. have merged operations and are starting with a $17 million fund that will finance pre-development, construction and acquisition costs, as well as assistance for tenant associations who want to purchase their buildings. The new Silver Spring-based organization is called the OpenDoor Housing Fund.

"We looked at both of our missions in this market and realized they were perfectly compatible," said Peggy Sand, OpenDoor's senior vice president, who was staffing the Washington Area Housing Trust Fund by herself.

OpenDoor receives financial support from a variety of sources, including state and federal governments, banks and individuals. The organization has loans active at affordable housing developments in Hyattsville, Silver Spring and several wards in the District.

Now that the combined entity has access to a bigger pool of funds, it plans to do more work in Northern Virginia and other areas of Greater Washington, Sand said. "We want to step back and do some business planning and find out where we can provide the most value."

As real estate prices have skyrocketed in Greater Washington during the past five years, the region's affordable housing supply has suffered. Many jurisdictions have lost thousands of units during that time, due in part to the conversions of properties to high-priced condominium complexes and to general market price pressures.

D.C. Mayor Adrian Fenty unveiled a plan July 16 that would create 10,000 units of affordable housing in the city during the next four years. He has pledged $117 million a year for the next four years to carry out the proposal.

By the end of 2007, contracts on nearly half of the District's 11,100 units of federally subsidized housing are set to expire, and Fenty's office is pursuing the purchase of those properties by the city or by new owners who will preserve the units for affordable housing.

Other jurisdictions are making an effort, as well. The city of Alexandria and Fairfax County, for example, have 1 cent real estate taxes and channel those revenues toward affordable housing. Alexandria's tax netted $3.3 million in 2006, and Fairfax County is expected to collect $22.7 million from its tax in fiscal 2008.

Still, even at a time when home prices are stagnant or declining in much of Greater Washington, the affordable housing supply is subpar, said Catherine Bucknam, a spokeswoman for Arlington-based affordable housing developer AHC Inc.

One of AHC's current projects is a 94-unit apartment complex that is being built in Arlington's Nauck neighborhood. The entire property will be devoted to affordable housing, but that was probably only possible because AHC already owned the property, Bucknam said. The high cost of real estate in Greater Washington makes it prohibitive for nonprofits to develop brand-new complexes, she said.

"Even with the downturn in real estate sales and prices, it's not that significant," Bucknam said. "Moderate and low-income households still aren't able to buy homes here. The need is outpacing our ability to provide affordable homes."


Site Map