The Dollars and Cents of Affordable Housing
by David Levine, President/CEO
In looking for low cost ways to produce affordable housing, several municipalities are becoming more creative. These municipalities recognize that their surplus and vacant lands can make the difference in affordable housing developments.
In this recent article published by the National Association of Realtors, it was reported that San Francisco, New York City and King County, Washington, have adopted policies promoting the use of public lands for affordable housing. The article showed that municipalities can lower the largest cost driver in an affordable housing development — namely, the land costs.
Close by to us, Arlington County and the Arlington Partnership for Affordable Housing (APAH) teamed up for the development of Arlington Mill, a 122-unit apartment building where all the units are priced for households earning no more than 60 percent of the area median income.
How did they make it happen? As reported, APAH paid Arlington County $1.55 million for the 75-year ground lease. In the open market, this site would have fetched $8.5 million. That savings on the land made the deal work — cutting more than $50,000 per unit in costs and embedding affordability in this housing development.
These are innovative and creative financing solutions. All were done, too, in the interest of affordable housing.