Maryland reaches fair housing agreement with federal government

Maryland has agreed to finance the development of 1,500 affordable housing units in prosperous neighborhoods throughout the Baltimore region and rewrite policies that civil rights groups say perpetuated segregation for decades.

The agreement with the U.S. Department of Housing and Urban Development settles a fair-housing complaint brought against the state in 2011 by a coalition of civil rights and fair-housing advocacy organizations.

The coalition accused the state of reinforcing housing segregation through by clustering subsidized, affordable housing developments together and in less desirable areas, rather than spreading them throughout the region. On Tuesday, fair-housing advocates applauded the deal as a significant commitment by the state to improve access for low-income renters to well-off neighborhoods that they have been excluded from in the past.

“What this means is there are going to be more housing options for families with kids in areas that have good schools, other services, and amenities and lower poverty that are are conducive to raising kids,” said Barbara Samuels, a fair-housing attorney for the ACLU of Maryland, which was part of the coalition known as the Baltimore Regional Housing Campaign.

Others in the coalition included the Citizens’ Planning & Housing Association and Innovative Housing Institute in Baltimore, as well as the Poverty & Race Research Action Council in Washington, D.C.

Michael White, chief of staff for Maryland Housing Secretary Kenneth C. Holt, said the state was satisfied with the agreement.

“This administration understands the important, positive impact of affordable rental housing development and is committed to affirmatively furthering fair housing,” White said in a statement.

White also touted the state’s recent track record, citing its contributions to the creation of 4,674 affordable housing units in the last state fiscal year.

The agreement both reinforces policy changes the state has made since the complaint was filed and adds new requirements.

The General Assembly in 2014 did away with a rule that effectively gave counties veto power over proposed affordable-housing developments. The rule had been a major barrier to locating affordable housing, in which minorities are typically about half of tenants, in more affluent, predominantly white communities.

Under the fair-housing agreement, the state promises to never reinstate that rule.

“Today’s agreement will help ensure that people of all backgrounds who call this area home have more affordable housing options in higher opportunity neighborhoods,” said Anna Maria Farías, HUD’s assistant secretary for fair housing and equal opportunity, in a statement.

The agreement builds on changes the state had begun making to its system for distributing low-income housing tax credits, the government’s primary tool for encouraging private developers to build affordable housing developments.

Developers sell the tax credits and invest the proceeds as equity in housing developments, allowing them to borrow less and offer rental units at more affordable prices to low-income families.

The credits are funded through federal tax revenue and distributed to states based on population. The state in turn distributes the credits to projects based on a point-based application system.

The state has begun awarding more credits to projects in so-called areas of high opportunity — higher-income neighborhoods with good schools and low crime — as opposed to clustering affordable housing in neighborhoods where a majority of residents are low-income.

In the past, affordable housing has been concentrated in high-poverty neighborhoods, while senior housing was more dispersed. The state’s new policy for awarding low-income housing tax credits has shifted toward projects that provide more affordable homes for families than for the elderly.

“They’ve been moving in the right direction,” Samuels said. “What’s significant about this is it holds them to actual results.”

Under the agreement, the state will need to further revise its point system for awarding tax credits to more effectively direct projects to more prosperous neighborhoods.

In the past, projects had to be within a mile of public transportation — a more difficult criterion to meet in wealthier suburbs. Now, projects farther away from a bus stop or train station can propose an alternative, such as an on-demand van or bus.

The system will also give more points to projects with multiple bedroom units, to encourage more developments for families.

The agreement also requires that projects receiving tax credits in disadvantaged neighborhoods be tied to broader community revitalization efforts that would bring retail and services to the area.

Nancy Rase, the founding CEO of Homes for America, an affordable-housing developer, said she hopes the agreement will encourage more developers to pursue projects in Baltimore’s suburbs, but she was somewhat skeptical about whether counties would be supportive.

“I think it will remain somewhat challenging,” said Rase, who is now retired, “but I believe these are the right steps to encourage developers to take on these challenges.”

The state’s agreement with HUD sends a strong message to counties, said Baltimore County Councilman Julian Jones, a Democrat from Woodstock who has been a leading supporter of affordable housing in the county.

“By having a statewide agreement, I’m hopeful that it will make us all work through the issues and do what’s best in terms of providing housing,” Jones said.

Baltimore County is already implementing a separate agreement with HUD to build 1,000 affordable homes for low-income families in more well-off neighborhoods.

The 2016 agreement resolved a federal housing complaint, also filed in 2011, by the local NAACP branch, Baltimore Neighborhoods Inc. and three county residents. They accused the county of perpetuating segregated clusters of minority renters with government subsidies by failing to expand affordable housing options in prosperous neighborhoods.

They alleged that the county had maintained policies that kept low-income and minority residents out of the best neighborhoods by spending most of its federal housing money on housing for the elderly occupied primarily by whites, demolishing and failing to replace 4,100 subsidized housing units for families since 1995, and locating Section 8 voucher holders in poor and segregated neighborhoods.

Philip Tegeler, executive director of the Poverty & Race Research Action Council, said Tuesday’s agreement offers creative solutions to addressing segregation in affordable housing, while setting realistic goals.

There is no deadline for the state to create the 1,500 units in the Baltimore region, and while low-income tax credits are the main financing source for such housing, the state could use other funding streams, he said. At least 1,000 of the units must be new construction.

“It’s a significant shift in the direction of state housing policy,” he said. “It’s significant and it’s reasonable.”

Tegeler said he’s hopeful the state’s agreement will set an example for other states with dated affordable-housing policies.

For children and families in the Baltimore area, the changes to housing policy could make a big difference.

A Harvard University study released in 2015 showed that Baltimore children, especially boys, had lower odds of escaping poverty than in any other city in the nation. Research has shown that programs that help low-income families move from poor neighborhoods to the higher-opportunity areas improves educational, employment and health outcomes for children.

“It will certainly have some effect upon lowering the overall levels of segregation, both economic and racial, in the Baltimore area,” said urban expert David Rusk. “But for the children of those 1,500 families it will have a transformative effect.”

Baltimore Sun reporter Doug Donovan contributed to this article.

sarah.gantz@baltsun.com

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