Affordable Housing in Brunswick, MD Erin Lehman, Kaya-Nadine Edmondson-Deigh, Will Anderson Agenda ● Introduction ○ Problem definition ○ Defining “affordable housing” in Brunswick ● Needs Assessment ● Recommendations ○ Inclusionary Zoning ■ MPUDs ○ Mixed Income Housing ● State and Federal Funding Opportunities ○ State and federal programs ○ Funding for affordable senior housing Introduction Brunswick is a small city in rural Maryland. Population increased by 23% between 2019 and 2022. Problem Definition 30% Or less of monthly income is spent on housing What is “affordable housing” ? Defining “Affordable Housing” in Brunswick Below 60% AMI Low-income housing Renters : 50-100% AMI Homeowners: 60-120% 31.9% 34% Workforce housing Area Median Income $142,300 for 4 people $119,532 for 1 person Needs Assessment 50% Brunswick’s population is expected to grow by 50% in the next 20 years Brunswick projects 1,362 housing units will be needed by 2045. Yearly Income Population Housing needed Low Income Housing $0-$75,000 31.9% 434 Workforce Housing $75,001-$150,000 34% 463 Rentals Available: 4 (October) Type of rental Studio 1 Bedroom 2 Bedroom 3 Bedroom 4 Bedroom Fair Market Rent (FMR) Value $860 $880 $1,000 $1,250 $1,540 # available for rent at FMR in Brunswick, Oct 2023 0 0 0 0 1 60% of renter households are 1-2 people Railroad Square 48 Apartments FMR Compliant–1-3 br Workforce Housing Houses for Sale # of Houses Available Percent of Population that can afford mortgages Existing Houses $210,000- $400,000 10 (38%) 44-68% New Build $500-700,000 11 (42%) <13% Existing Houses $400-700,000 5 (19%) 44-13% Total 26 + Renovation Costs Majority of Housing Stock for Minority of Population Inclusionary Zoning What is it? Inclusionary Zoning requires new developments and redevelopments to allocate a certain percentage of their units to be sold/rented at below-market prices those who meet certain income criteria. 16% set aside requirement On Average Predominantly target 50-80% AMI Target Mandatory Program Triggers ⅓ of Programs were in rural areas; growth is a must! Over 50% of rural programs trigger at 2-5 units. California 85% of rural programs target 30-50% AMI Target Low Income Rural IZ Affordable Percentages Around 50% of rural programs require 6-10% affordable units. Developer Incentives Over 77% of rural programs offer density bonuses. In-lieu fees are an option to allow developers to pay into a local affordable housing trust instead of building MPDUs. In-lieu fees that are too low will encourage developers to pay the fees instead of building MPDUs. This gives Brunswick money to invest in affordable housing, but requires the city to be more involved in building housing. What’s the goal? If the goal is to have mixed-income housing, in-lieu fees should be high and only offered on occasion. In-lieu Fees Long-term Affordability Flexible Program A flexible program is VITAL for rural areas. Brunswick needs to be able to work and negotiate with developers. Examples: density bonuses, in-lieu fees, reduced parking requirements, etc. Keys for IZ MPDUs need to have long-term requirements built in. 93% of programs nationwide require 30 years or more of affordability. Montgomery County requires 30 years for houses and 99 years for rentals. Annapolis requires 30 years for both. Inclusionary Zoning Recommendations MPDUs have seen success throughout Maryland, including in Montgomery County, Annapolis, and Frederick City. Is it a good option for Brunswick? ❏ Is Brunswick growing? A mandatory MPDU program triggered by 2-5 units with a 12-15% set-aside requirement. Offer density bonuses and be flexible (in-lieu fees), but require affordability for at least 30 years (longer for rentals). 50% of the set-aside requirement should be for those making under 50% AMI and 50% should be set aside for 51-100% AMI. Mixed Income Housing Defining “Mixed income housing” “Mixed income housing is a deliberate effort to construct or own a multifamily development that has the mixing of income groups as a fundamental part of its financial and operational plans.” Lawrence J. Vale & Shomon Shamsuddin (2017) Allocation: Distribution of Units by Subsidy Type Goal 1: To preserve affordability in fast growing areas: ● Low-income skew ● Polarized low–high Can exacerbate poverty concentration in depressed areas, slow growth Lawrence J. Vale & Shomon Shamsuddin (2017) Goal 2: To promote growth in low-income areas: ● High-income skew ● Broad continuum Does little to alleviate poverty in fast-growing areas, low-income residents will be displaced overtime Proximity: Spatial Separation of Income Mix Same Floor, Building, Street Different Buildings, Streets Same Building Different Floors More intimate, avoids poverty concentration, Increases interaction among different income groups More segregated, may concentrate poverty, increase stigma and isolation Rarely Practiced Lawrence J. Vale & Shomon Shamsuddin (2017) Tenure: Distribution of Homeownership Versus Rental Units Homeownership - Creates investment opportunities in underdeveloped areas - Encourage low-income residents to stay and invest their social, financial and political capital Lawrence J. Vale & Shomon Shamsuddin (2017); National Housing Conference (2023) Rentals - Provides flexibility for traveling professionals, single renters - Rural markets, demand - High turnover is rarely an issue among subsidized units - Must be properly managed Duration: The Amount of Time Projects Remain Mixed Income Based on Funding Restrictions Cross subsidization in Brunswick ● Viable market conditions but vulnerable to economic downturns ● Reduces need for public dollars Lawrence J. Vale & Shomon Shamsuddin (2017); National Housing Conference (2023) How to make Mixed Income Housing Attractive ● Access to essential services, transportation, quality schools ● A continuum of income levels, not separated by physical design features ● Pedestrian friendly, green infrastructure, common spaces, etc. ● Amenities and concerns of duration Lawrence J. Vale & Shomon Shamsuddin (2017); National Housing Conference (2023) Brunswick can use mixed-income housing to… ● Promote growth in depressed areas ● Preserve affordability in growing areas ● Deconcentrate poverty and its devastating effects on low-income families ● Provide homeownership opportunities for low income residents State Funding Opportunities ■ The Entitlement Program ■ The States and Small Cities Program ○ Funding categories ■ community development ■ special projects ⬣ Community Legacy Program Community Block Grant Program ○ Needs based ○ Funds projects in sustainable communities - Two options: 1) 20 of the units available to households earning 50% or less of the AMI 2) 40% of the units available to households earning 60% or less of the AMI Multi-family bond program - Units Restricted to - Tenants with income below 60% AMI - Low-income tenants for at least 40 years - Must reserve Same proportion of units to how much the program is financing Rental housing program Are there funding opportunities for affordable senior housing ? Interest free capital advances to private, non-profit organizations to finance the construction & rehabilitation of affordable housing for low-income elderly persons. Section 202 Supportive Housing for the Elderly Program Brunswick House 1100 Peach Orchard Ln - Monthly rent is based on income - Rent : 30-40% of adjusted income - For example: adjusted income is $1200 - pay $300-400 in rent Support of Non-Profit Organizations ● State and federal funding programs require applications to be submitted by non-profit organizations ● Some non profit organizations : ○ United way of Frederick County ○ Housing Frederick ○ Habitat for Humanity ○ Interfaith Housing alliance Sources National Housing Conference. “Challenges to Developing Mixed-Income Housing.” National Housing Conference, 2023, https://nhc.org/policy-guide/mixed-income-housing-the-basics/challenges-to-developing-mixed-income-housing/. Accessed 4 October, 2023. National Housing Conference. “Common Incentives and Offsets in Mixed-Income Housing.” National Housing Conference, 2023, https://nhc.org/policy-guide/mixed-income-housing-the-basics/common-incentives-and-offsets-in-mixed-income-housing/. Accessed 11 December 2023. Ramzanpour, M., & Nourtaghani, A. (2018). Impact of Four Physical Design Factors on Mixed-Income Housing. Retrieved November 7, 2023, from https://ascelibrary.org/doi/10.1061/%28ASCE%29AE.1943-5568.0000332 Social Explorer Tables: ACS 2021 (5-Year Estimates) (SE), ACS 2021 (5-Year Estimates), Social Explorer; U.S. Census Bureau Shroyer, A. (2020, May). Determining In-Lieu Fees in Inclusionary Zoning Policies Considerations for Local Governments. Urban Institute. https://www.urban.org/sites/default/files/publication/102230/determining-in-lieu-fees-in-inclusionary-zoning-policies.pdf U.S. Development of Housing and Urban Development (2008). Great Places to Call Home: A Representative Portfolio of HUD’s Section 202 Program. https://www.hud.gov/sites/documents/DOC_12821.PDF https://nhc.org/policy-guide/mixed-income-housing-the-basics/challenges-to-developing-mixed-income-housing/ https://nhc.org/policy-guide/mixed-income-housing-the-basics/common-incentives-and-offsets-in-mixed-income-housing/ https://ascelibrary.org/doi/10.1061/%28ASCE%29AE.1943-5568.0000332 https://www.urban.org/sites/default/files/publication/102230/determining-in-lieu-fees-in-inclusionary-zoning-policies.pdf https://www.hud.gov/sites/documents/DOC_12821.PDF U.S. Department of Housing and Urban Development. (n.d.). Section 202 Supportive Housing for the Elderly Program. https://www.hud.gov/program_offices/housing/mfh/progdesc/eld202 Wang, R., & Balachandran, S. (2019). Inclusionary Housing in the United States Prevalence, Practices, and Production in Local Jurisdictions as of 2019. Grounded Solutions Network. https://groundedsolutions.org/sites/default/files/2021-01/Inclusionary_Housing_US_v1_0.pdf Wiener, R. J., & Bandy, D. K. (2007, 10 2). INCLUSIONARY HOUSING IN SMALL TOWNS AND RURAL PLACES: THE CALIFORNIA EXPERIENCE. Architecture, City and Environment, Ano II(Num 5), 555-582. https://upcommons.upc.edu/bitstream/handle/2099/3710/DEF17_ROB.pdf?sequence=1&isAllowed=y Wong, B., Lung-Amam, W., & Knaap, G. (2021, May). Moderately Priced Dwelling Units: Montgomery County, Maryland’s Model of Inclusionary Housing. Lincoln Institute of Land Policy. https://www.lincolninst.edu/publications/working-papers/moderately-priced-dwelling-units Zillow. (n.d.). Zillow Home Value Index (ZHVI) for All Homes Including Single-Family Residences, Condos, and CO-OPs in Brunswick, MD. https://files.zillowstatic.com/research/public_csvs/zhvi/City_zhvi_uc_sfrcondo_tier_0.33_0.67_sm_sa_month.csv?t=1696947367 https://www.hud.gov/program_offices/housing/mfh/progdesc/eld202 https://groundedsolutions.org/sites/default/files/2021-01/Inclusionary_Housing_US_v1_0.pdf https://upcommons.upc.edu/bitstream/handle/2099/3710/DEF17_ROB.pdf?sequence=1&isAllowed=y https://www.lincolninst.edu/publications/working-papers/moderately-priced-dwelling-units https://files.zillowstatic.com/research/public_csvs/zhvi/City_zhvi_uc_sfrcondo_tier_0.33_0.67_sm_sa_month.csv?t=1696947367