Representatives from Enterprise Homes Inc. met with the La Plata Town Council on Monday during its work session to discuss a new affordable housing project in La Plata, which would be funded largely through the use of low-income housing tax credits administered by the state to offset much of the cost of construction.
The proposed project, called La Plata Gardens, is a four-building apartment complex that would be located on Washington Avenue between the Park and Ride and the new assisted-living facility that is currently under construction. Sixty units would be designated for people who earn below 60% of the area’s median income and would be capped at $1,600 for a three-bedroom unit, and all others would be set as high as $1,600 per month for a two-bedroom unit, but could go higher or lower depending on the market.
Ned Howe, who is vice president for new business at Enterprise Homes, said the design includes a mix of one-, two- and three-bedroom units, 12 of which would be reserved for people with disabilities.
“We’re not a merchant builder that builds something and then disappears,” said Howe, having emphasized that Enterprise is a mission-driven organization with a 30-plus-year track record. “Where we build, we have maintained and kept.”
Of the 52,270 total households in Charles County, more than 10,500 are cost burdened and nearly 7,000 households are severely cost burdened. A 2018 study found that there was an unmet demand of 1,375 affordable units for households earning between 30% to 80% of median family income.
About 288 units would be needed per year to meet the residual demand, according to information from the Charles County Department of Planning and Growth Management.
“Cost burdened is any household that’s having to spend over 30% of their gross income on housing. … Almost 33.5% of households in Charles County fit within this category,” Howe said. “We’re trying, with affordable housing, to serve that group.”
Because the tax credits are determined based on the number of qualifying residents living on the premises, Enterprise Homes asked county commissioners in April to implement project-based housing vouchers for the special needs population to help ensure it would continue to qualify for the tax credits. The commissioners raised a number of questions regarding the potential impact on other developers seeking to build affordable housing developments, given the federally mandated cap on project-based vouchers.
“We had a 10-day study done last year on traffic count in that vicinity. They had almost 100,000 cars in that 10 days so it is a well traveled area,” Mayor Jeannine James said. “In speaking with the commissioners, they don’t have their [capital improvement plan] right now to do anything to Washington Avenue. So, that does concern me with putting up to 120 more cars back on the road.”
In terms of moving forward with the project, Councilman Brent Finagin said he would be “fascinated to see what the traffic study says,” as he also shares concerns about dangerous entrances, exits and passageways along Washington Avenue.
“Without a traffic light there or some lighted, blinking crosswalks to allow people to cross Washington Avenue, it’s going to be interesting,” Finagin said. “But I’m not going to prejudge the study.”
“There’s going to be a lot of people in a concentrated area with no place to walk or go except to Walmart and that shopping center,” Councilwoman Paddy Mudd said. “You can’t walk to a school, a library or even downtown without walking down Washington Avenue.”
When it comes to transit-oriented development, Enterprise Homes attorney Steve Scott said that Washington Avenue is a “fantastic location” with promising opportunities for affordable/market rate communities.
“You will rarely find a site that’s perfect in every respect,” said Scott, “but I think there are a lot of plusses to this site.”
“If it’s a 9-to-5 situation, we are preventing more commercial activity from going on on Washington Avenue which will then turn us into the old Washington Avenue in Waldorf,” Councilman Matthew Simpson said. “That’s the one thing that we do not want.”
During Enterprise Homes’ meeting with county commissioners in April, community services director Dina Barclay said that the county, like all jurisdictions that participate in the housing voucher subsidy program, gets a fixed allotment of vouchers every year. So, if the decision were made to offer project-based vouchers, they would have to be converted from the available stock of choice-based vouchers.
Barclay, along with Rita Wood who is the chief of the county’s housing authority, explained that voucher applicants would be able to choose either a choice-based or project-based voucher as they preferred. But if the type of voucher they want is not available, then applicants would have the option of waiting for it without losing their place on the waiting list. They would also be able to switch from one type of voucher to the other, provided that the desired voucher is available.
Howe explained that a 9% Low-Income Housing Tax Credit would provide between 60% and 80% of capital needed for an affordable housing development, and serve residents at 20% to 80% of the area median income. The tax credits are managed using state housing policies and priorities and are a limited resource and highly competitive.
Local support for the tax credits is typically leveraged more than 10 times through grants, loans, fee waivers, infrastructure improvements, rent subsidies or tax abatements. However, the program is oversubscribed every year by a ratio of 2 to 1 or 3 to 1, according to Howe.
“Every year, they put their housing policies in this guide that enables you to score points and competitively go against other developers and other municipalities to try and tap into these resources,” Howe said. “One of the things in this particular guide, which didn’t come out until Feb. 14 of this year, was that they wanted 20% of the units to score maximum points. If you have 20% of your units dedicated to a special needs population [including disabled individuals, veterans and homeless residents], they want them to serve people at 30% area median income or below in order to score those points and get the tax credits.”
The U.S. Department of Housing and Urban Development, which administers the program, stipulates that no more than 20% of the total yearly allocation of voucher funds can be converted into project-based vouchers.
Enterprise Homes could choose to accept the existing vouchers but because they are portable, there would be no guarantee that they would always have the minimum number of qualifying residents living there at any one time, according to Howe.
Without the tax credits, Howe said La Plata Gardens wouldn’t be a viable solution as Enterprise Homes “can’t create the affordability [factor] without them.”
“The only way to try and get subsidy was to see if we could get project-based vouchers for that special needs population for that 20%,” Howe said. “Charles County, unfortunately, doesn’t have a housing authority so we tried to ask if there’s a way we could do this. The only way we could do it was to go meet with the commissioners. We found out that they don’t have a policy in place or have any way to do it, but are willing to entertain it because they really want affordable housing in Charles County.”
The commissioners, with the exception of one vote against, ultimately voted to approve a letter of endorsement with changes proposed by Commissioner Amanda Stewart (D) that emphasized the commissioners’ support for affordable housing projects throughout the county, rather than specific support for Enterprise Homes’ proposal.
“The Charles County commissioners have made a commitment to affordable housing,” Scott said. “I think the difficulty is trying to find ways to follow through on that commitment.”
The public meeting on the proposed changes to the county’s housing voucher policies will take place on June 18 at the Charles County Government Building in La Plata.