Proposed Activity #1

page 4

Relationship to Funding Criteria

This program will provide direct benefits only to low and moderate income households. In many instances, the availability of this assistance will determine whether or not a housing unit will remain a part of Arlington's low and moderate income housing stock.

b) Proposal for Townhouse Co-Operative Development Activity ($75,000)

Purpose

The purpose of Arlington Housing Corporation's Townhouse Development Program is to provide additional housing for low and moderate income families through the provision of 16 to 20 new units for this income group. The Townhouse Development Program will provide two, three and four bedroom townhouse units on one or more sites to be developed as Section subsidized cooperative (s), with monthly carrying costs equivalent to the fair market rents.

A second goal of this program is to create a stable low and moderate income community within the co-op as contrasted with the more transient rental situations. In a co-op, the family has the opportunity to build up equity in the unit with an initial down payment as low as 2%, thereby providing many of the advantages of home ownership without the large front-end expense.

Process Description

The Townhouse Development Program will be able to achieve its goals only if the price of the units can be kept low enough that the monthly carrying costs to the co-oppers do not exceed the fair market rent levels. This cannot be done through traditional private market development. Townhouse-type construction will help to cut down on the building costs of the units, and any available interest subsidy will result in savings, but a reduction in the land costs would make the program workable because it would cut down on a large expense. AHC has briefly outlined below, the proposed use of the Community Development money, the mortgaging programs available, the Section 8 subsidies to the co-oppers, and the possibilities of available land.

1.

2.

The Community Development money would be used by the Arlington County
Government to purchase one or more suitable sites for townhouse develop-
ment. AHC estimates the cost of this land to be as much as $5,000 per
unit, depending on the location of the parcel (s) and the existing zoning
of it or them. The County can then take a CD-allowable write-down expense
on the cost of that land and lease the land to AHC or a subsidiary, private
non-profit corporation set up to handle this co-op development and operation
on a long-term basis. With this long-term lease, AHC will be able to obtain
financing for the project. This action will reduce the land costs to AHC
and enable the Corporation to provide lower costs units. While CD regulations
allow the County to purchase land for this purpose, AHC, because of its
private status, is not able to do so.

Arlington Housing Corporation would then begin the development process to include
the following:

a. any necessary rezoning to make the land eligible for townhouse develop-
ment;

b. the assemblage of a development team to include at least a contractor,
an architect, and a management representative; and

C.

the securing of commitments for interim and long-term financing.

3.

4.

5.

AHC has researched the possibilities for financing of a project such as this. Money is available for long-term financing from both VHDA and FHA. Neither program provides for any kind of interim financing which means that all development front end costs must be deferred until an initial closing prior to the beginning of construction work. This method of operation, while not ideal, is workable, particularly if the real estate transaction has already been completed.

a. VHDA has financing available for projects for this type with interest rates ranging from 74% to market rate. Initial conversations with them show them to be very interested in a project of this type although they cannot make any kind of commitment until the proposal process is further along.

b.

FHA has two possible insurance programs under Section 221 (d) 3 and
(d) 4 which would also provide a final federally insured mortgage with
an interest rate between 74% and market rate. Both of these are insurance
programs, and there is no danger of the money not being available under
the program.

Before either of the above-described mortgage programs can be applied to the
townhouse project, AHC must receive a Section 8 commitment which will insure
that Section 8 money will be set aside for the subsidized operation of the
co-op.
AHC now has such a commitment from VHDA for 22 units. While AHC
has not yet been able to capitalize on this commitment, the receipt of such
a commitment leads them to believe that they would be able to get the necessary
commitments for the proposed project.

At the completion of construction, either AHC or a subsidiary private, nonprofit corporation set up specifically to take charge, the co-op will take on the final mortgage for the development, will select the tenant/owners and will be responsible for the cooperative management of the development. The Board of Directors of this corporation will be comprised of members of AHC, residents of the co-op and residents of the neighborhood surrounding the development to insure that the goals of the corporation, the co-op and the neighborhood at large are served by the co-op.

Beneficiaries

The Section 8 income limits will be used to select occupants. The program requires that 30% of the units be made available to very low income households, and the other 70% to low income households. The broad range of low incomes allowable under Section 8 insures that there will be a variety of income groups residing in this project.

Anticipated Benefits

AHC anticipates many benefits from this proposed development both to the individual tenant/owners and to the Arlington community in general. Most important among those are the following:

1.

This kind of program is a very direct way to provide much needed moderately priced housing for younger, less affluent families who cannot afford to buy Arlington's existing housing.

2.

3.

4.

5.

6.

7.

8.

Through the co-op mechanism, AHC is creating an ownership development rather than a rental development, making this project a more stable part of the community.

By requiring the units to be owner-occupied, there should be none of the professional real estate speculation within the co-op which is, in the long run, contributory to the decay of the neighborhood.

The design of the proposed project shall provide a variety of unit sizes,
and, in some cases, shall include enclosed unfinished spaces. This will allow
for a variety in family size within the co-op and gives any given family the
option to increase the usable space in their home without moving.

By using the Section 8 income maximums, the co-op is assured of attracting a fairly wide range of incomes.

Townhouse type construction is in greater harmony with older residential
neighborhoods than many types of apartment construction and provides rela-
tively high density in a human scale, single family setting.

The property tax revenue to the County will increase once these vacant land parcels have been developed.

The managing directorship of the co-op insures that the co-op will be a cohesive development and an important part of the surrounding neighborhood(s).

Relationship to Funding Criteria

This project will both provide housing for low and moderate income residents and will increase the County's low and moderate income housing stock. Consequently, the primary benefits will be realized by low and moderate income persons.

c) Proposal for Administrative and Consultant Activities ($35,000)

Purpose

The purpose of the proposed Administrative and Consultant activities is twofold. First, AHC wishes to insure that there be sufficient day-to-day involvement with the on-going projects to have them carried out efficiently and effectively. Secondly, AHC, from time to time needs to hire consultants such as lawyers, appraisers, or architects, to perform specialized functions for the Corporation's programs.

Projected Costs

At present, AHC has one part-time paid staff person. Even with the assistance of several volunteers, this is inadequate to administer the on-going programs and to perform all the communications and general office functions.

For Program Year 1978, we propose to augment the staff with a second part-time person, locate into a more accessible and workable office setting, and include an allowance for the hiring of specialized consultants. ARC has broken down these needs as follows:

1. One part-time (30 hr) staff person to administer the on-going programs and work with the Directors of the Corporation to develop new programs.

2.

3.

4.

One part-time (30 hr) staff person to handle AHC's communications and outreach efforts and to supervise volunteers.

To locate an office with enough space and opportunities for privacy to allow three people (two staff, one volunteer) to work and perform their duties which include applicant interviews and small group meetings.

The possibility of hiring consultants for on-going or proposed projects.

Request for Funding

AHC requests a total of $35,000 for the funding proposal above outlined. jected breakdown of these expenses is as follows:

The pro

This amount, together with the income from dues and contributions should cover the operating expenses for the Corporation so that the success of the on-going programs will not be jeopardized for lack of adequate planning, administration and follow-up.

Relation to Selection Criteria

These proposed programs are all designed to benefit exclusively low and moderate income Arlington residents. These activities are all felt to be necessary for the conservation and expansion of the County's low and moderate income housing stock. In many instances, the repairs provided under the HIP alleviate conditions which are a serious threat to the dwellings occupants, all of whom are low income. The proposed Section 8 townhouse cooperative development, which will expand the County's low moderate income housing stock, is dependent on the County being able to use CD funds for land acquisition costs so that AHC's construction costs will be low enough for the units to be affordable by persons who meet the Section 8 income criteria. The continued competance, commitment and thoroughness of AHC's staff is necessary for AHC's continued success. The expansion of AHC's programmatic activities and the concurrent expansion of administrative complexity requires the expansion of AHC's staff as suggested above.

The magnitude of Arlington's low and moderate income residents is documented in Table II of the August 19, 1976 HAP. It shows 11,864 households in need of assistance. The County's rent and tax relief program, which was begun in 1974, assisted approximately 1,900 of these persons at a cost of approximately $800,000 in fiscal 1976. Additional steps taken by the County to meet the housing needs of these households are documented in Part II of this application. Obviously, this assistance is a mere fraction of what is needed if the housing needs of Arlington's low and moderate income residents are to be ameliorated.

ARLINGTON COUNTY PROPOSED ACTIVITY #2

Ballston Neighborhood Improvements ($505,000)

Background

Ballston, located in census tract 14, was developed at the turn-of-the-century as a working-class commuter neighborhood. Presently the area consists of a mixture of commercial and low to moderate income residential uses. The neighborhood is in close proximity to a major interchange of the proposed 1-66, and centers around the Glebe Road Metrorail station. As a result, there has been considerable anticipation of redevelopment of the low density single family residential area to high density residential and office uses, expectations that have been growing since these transportation projects were first discussed, over 20 years ago. The County Board demonstrated its opposition to this type of development in order to preserve a sizable portion of the County's low to moderate income housing stock located within walking of rapid transit service in January, 1977. Preventing high density redevelopment will principally benefit the present low to moderate income families and is necessary to the preservation, stability and expansion of the neighborhood's low to moderate housing stock.

The Ballston community on its own initiative recently obtained the cooperation of the Urban Design Studio, Catholic University, and with a grant from the National Endowment for the Arts, documented deteriorating conditions and changes in Ballston and prepared a community design for the area, (see attachment, Ballston, A Community Plan). This design preserves the residential orientation of the area, and demonstrates how the present low to moderate income housing stock can be integrated into a comprehensive commercial and residential community. If implemented it would become a national model for the preservation and expansion of low to moderate income housing in a neighborhood setting which is compatible with the land use, economic, and transportation requirements of an urbanized area. attached Washington Post editorial).

Description and Objectives of Proposed CD Activities

(See

In January, 1977, the Arlington County Board adopted a land use plan supportive of the Community Plan. The CD funds proposed for this project would be used to implement a portion of the Community Plan. While the action of the County should contribute to the stability of the area, additional public investments are essential to counter the effect of speculative investment activity of recent years.

The major objectives of the CD funded activities proposed are to improve the physical appearance of the area, to preserve and upgrade the existing housing stock, to stimulate residential development compatible with the present neighborhood and the 1977 land use plan, and to enhance the sense of community that prevails in the area. The proposed improvements, which should trigger investments by low and moderate income homeowners and landlords to upgrade their property, will be supplemented by CD funded rehabilitation loans and grants. Most of the housing in the area is sound, but deteriorating as a result of investor ownership, high density expectations and commercial encroachment. In addition, it is hoped that designation as a third year CD target area will stimulate both private and CD supported new residential construction for low and moderate income families. Crucial to attracting private investment is the early construction of the much needed new streets, sidewalks, lights and landscaping. Because current residents are unable to pay for even a portion of these improvements (as is the general county procedure) the receipt of CD funding is necessary for the preservation of this neighborhood.