Every community needs affordable housing whether they recognize it or not. The current requirement is that 12.5 percent of any new construction in Montgomery County must be set aside for moderately priced housing, but is that enough?
I recently attended a presentation by Casey Anderson, chair of the Montgomery County Planning Board and Robert Goldman, president, Montgomery Housing Partnership, on the changing demographics of Montgomery County and its impact on housing. The presentation was hosted by the Women’s Democratic Club of Montgomery County and, while extremely informative, was also somewhat disconcerting. It served as another example of the ongoing question of how long do we wait before it is too late?
As with the development of any community, effective planning always needs to focus on a wide range of variables. Where are the jobs, both high paying and lower paying? What are the commuting options to minimize traffic congestion? What is the impact on the school system with the construction of new housing? As Mr. Anderson pointed out in his presentation, more than a million people reside in Montgomery County, one of the wealthiest counties in the nation. According to Mr. Anderson, “the median income in Montgomery County ranks consistently among the highest at $98,326 per year but is unevenly distributed with much of the wealth concentrated in the southwest portion of the county”. Even with this wealth, one in four households earn less than $50,000 per year and, per Mr. Goldman, “6.7 percent of Montgomery County residents live below the poverty level, an increase of 49 percent since 2005”. Just as alarming, per Mr. Goldman, is that “54 percent of renters pay 30 percent of their income on housing and, if income falls below $50,000, that percentage rises to 85 percent of income”.
With new construction going up around us, the question that we must face is whether that 12.5 percent reserved for moderately priced housing will be enough housing to house our Montgomery County residents in a manner that takes into consideration all of the previously mentioned variables? Another way of looking at that question is whether what constitutes affordable housing going to be enough in both terms of quantity and affordability? The current formula used to arrive at moderately priced housing is 68 percent of the areas’ median income. According to both Mr. Anderson and Mr. Goldman, the answer is no, it will not be enough. So the real question becomes when do we start to take this situation seriously and how best to address it?
The presentation cited the Bureau of Labor Statistics and indicated that mid- to low-paying jobs in such areas as construction and health services account for most of recent job growth in Montgomery County. Further, an assessment performed by the George Mason University Center for Regional Analysis revealed that wages of over half the forecasted jobs will be less than the median county wage. Since job growth drives housing demand, it is safe to say that the job growth occurring in Montgomery County will necessitate a demand for additional housing. Moreover, with the nature of the jobs being generated, it is also safe to assume that the housing that will be needed must be affordable by those who will be filling these mid- to low-paying jobs. According to that same analysis performed by the George Mason University Center for Regional Analysis, during the 20 year span from 2012 to 2032, Montgomery County can expect to see more than 129 thousand new jobs with an associated need for more than 83 thousand housing units to address the need by these additional workers to fill the jobs. Accordingly, even if Montgomery County were to provide the necessary additional housing, and projections indicate that there will be a need for about 4,200 units per year to meet the anticipated demand based on the expected job growth, we still face the issue of whether the housing will be placed in the right locations and be affordable by these additional workers. Mr. Anderson indicated that recent housing permit requests would calculate to about 3,500 new units to be built annually, far short of the projected 4,200 units.
Mr. Goldman indicated that in Montgomery County “25 percent of units rent for $1,250 or less and, based on projections, that number will need to be increased to 58 percent”.
These are the issues, but what are the solutions? To begin with, planning by the county must reflect this need for additional affordable housing and budget accordingly. Like any initiative, cost must be considered both in the short AND the long term. Mr. Goldman indicated that the Montgomery Housing Partnership acquires and renovates old buildings and the county has made available $22 million as part of the county budget and bonds for this specific purpose. That will certainly help, but more is needed. Some of the suggestions also outlined by Mr. Anderson and Mr. Goldman include the need for the Purple Line to ease the traffic congestion issue and make cross town commuting less problematic. Again, as part of effective planning, building that Metro line now rather than wait for the traffic congestion to reach staggering levels is essential to the long term vision for Montgomery County. Another important consideration is to preserve as much of the current affordable housing as possible rather than build over it and lose it. Effective planning requires that building new units is done in a manner that also preserves existing units. Currently, according to Mr. Goldman, we lose upwards of 3,000 such units per year.
However the county ultimately decides to address this issue, the hope is that it recognizes the need to begin sooner rather than later.