The recent debate over affordable housing in Owings Mills illustrates a region-wide problem: There's a growing supply of affordable housing in the city of Baltimore but practically none coming on line in fast-growing suburbs. And if current growth patterns continue, some entire counties may soon be out of reach for middle- as well as low-income families.
That's a dramatic change for the metropolitan Baltimore market, long known for row houses with marble steps and low prices.
High land costs, builders say, are the single greatest obstacle to bringing affordable housing to high-growth suburbs.
Other factors include high hookup fees and other government service charges, as well as zoning regulations that prohibit high-density housing.
Meanwhile, the term "affordable" has come to mean different things in different localities, which both reveals and obscures the market economics at play in each area.
To people in Baltimore, "affordable housing" means new housing costing as little as $33,000 for people who typically earn less than 80 percent of the median income. In the city's Sandtown-Winchester neighborhood, James Rouse's Enterprise Foundation and its partners are building housing that can be purchased for $37,000 by the "working poor," people earning as little as $11,000 a year.
But in the suburbs within a half-hour drive of Baltimore, "affordable" has become a synonym for entry-level housing for ,, first-time buyers.
In Baltimore County, for example, it tends to mean $80,000 to $100,000 houses or condominiums for people who earn the median income for the county, about $43,500 for a family.
In a plan released last week, developers of the 5,500-unit Owings Mills New Town community said that at least 7 percent of their residences will be affordable to families at or just below the median income level.
But no housing can be provided for truly low-income residents, they said, because government subsidies aren't available.
That's a significant shift of position from 1979, when county officials promised that growth areas such as Owings Mills and White Marsh would provide housing for low-income residents.
And in Howard County, "affordable housing" is often used to describe residences that are low in price compared to others in the market -- such as Mark Building Company's $145,000 detached houses in Columbia -- but still out of reach of many people.
That reflects the county's proximity to Washington, where housing prices are much higher on average than in Baltimore.
"It all depends what your definition of affordable housing is," said Terry Rubenstein, executive vice president of the company building Owings Mills New Town.
"It's how you define it and who you're building for. That's the crux of the issue."
What costs what
The cost of new housing can be broken into several categories: materials, or "sticks and bricks"; labor; costs of land and site development; developers' profit; and soft costs such as brokers' fees and marketing.
Although housing types vary, the most common type of affordable house is the town house.
A typical figure for the labor and materials needed to build a bare-bones, three-bedroom, two-bathroom town house, rising three stories and measuring 18 feet wide by 34 feet deep, is about $41,000, says Daniel P. Henson III, a senior partner of Struever Bros. Eccles & Rouse, the largest home builder in Baltimore.
That's just about what it cost for the houses his company built at Frederick Heights, a 122-unit development off Frederick Avenue in West Baltimore.
The cost of building that town house is about the same whether it is in the city or the county, he said. Still, there are many similar town houses in Baltimore County that cost an additional $10,000, $20,000 or more to build.
The difference is largely due to the cost of land.
For example, he said, the land for each unit at Frederick Heights cost about $3,000. But the average cost for a similar-sized town house lot in Baltimore County would be about five times the cost of the city lot, or about $15,000.
In the county, builders must often spend money on additional issues, such as preserving wetlands. And because the public works infrastructure is not always in place to serve county parcels, Mr. Henson said, the builder may have to build roads and sewers.
But the biggest problem of all, he said, is that many counties have tried to control growth by zoning property to prohibit high-density development.
For example, land in Owings Mills may cost $250,000 an acre. But it may be zoned so that only six houses can be built per acre, making the land cost for each house more than $40,000.
"The counties are generally no-growth," Mr. Henson said.
"Owings Mills is a perfect example of a no-growth approach that tries to fend you off by saying, 'We're going to charge you $7,000 per house to hook up each house to the county water, which is actually the city water. . . .'
"The counties are just not encouraging people to build affordable housing."
Means to reduce costs
Despite such restrictions, some builders have found ways to lower housing costs.
Their solutions include:
* Obtaining grants: Perhaps the most celebrated affordable houses in Baltimore are the 300 town houses that Enterprise and Baltimoreans United for Leadership Development are building in the Penn-North and Sandtown-Winchester areas. The cost of building each house is $58,500.
But because the development team has received federal, state and local grants of more than $17.5 million, and because the land and site improvements were donated by the city, the houses can be sold to eligible buyers for $37,000.
* Mixing "affordable" with market rate: On Friday, a group headed by Shelter Development Corp. dedicated Columbia Commons, a $14.8 million apartment complex in Columbia that received subsidies to make some rents more affordable. Of the 200 units in the complex, 50 will be set aside for rent at monthly rates of $234 to $424, making them affordable to people who earn as little as $8,000 a year.
Remaining units rent for $595 to $870 per month.
* Eliminating advertising expenses and broker fees: Mark Building Co. has established such a reputation for constructing quality homes at affordable prices that it has a waiting list of buyers.
That means that Mark can sell houses with virtually no advertising and can handle sales in-house, instead of hiring brokers who charge 6 percent commissions.
* Finding a more efficient design: English Country Manor, one of the fastest-selling and most affordable condominium projects in Harford County, has prices from $61,000 to $78,000.
It was a hit largely because its unit layouts and common spaces were so attractive that residents forgot about the low square footage.
* Using free labor: Sandtown Habitat for Humanity is selling a thoroughly renovated town house at 1539 N. Gilmore St. later this week for $28,000.
The key to the low price: All of the labor was donated by members of Evangelical Presbyterian Church of Annapolis, and some construction materials were donated as well.
To top it off, the all-volunteer Neighborhood Design Center donated the design work for the two-bedroom house, which is valued at $70,000.
Sandtown Habitat hopes to complete 100 houses under its "One Church, One House" program.
But Mark Gornik, pastor of New Song Community Church and a Sandtown Habitat board member, said that it's not a model everyone can follow: "You need a motive other than profit for what we're doing. The reason people participate is that they see it as a Christian calling or they just have a desire to make a differ What are builders doing to provide affordable housing? According to Legg Mason Realty Group, which monitors local housing developments, the area's least expensive projects as of July 1 include:
* Condominiums: Riverside Park in Harford County, by Henry J. Knott Development Co. Prices start at $55,400 for a one-bedroom unit. At the same Riverside development Ryland Homes is offering one-bedroom condominiums for $66,900, and Ryan Homes is offering two-bedroom condominiums at Laurel Woods for $69,900. In Perry Hall/White Marsh, Sterling Homes is selling one-bedroom condominiums at Red Run Farms with a starting price of $58,900.
* Town houses: In the Edgewood/Joppa area of Harford County, American Landmark's Chapelgate development has town houses selling for $78,900. In the same area, Ryland Homes' West Shore development has town houses for $80,000.
* Detached houses: At Sunrise Estates in Cecil County, Montgomery Bros. Builders has units starting at $89,900. At Trimble Fields in Harford County, Superior Building Systems has units starting at $93,500. At Glen Burnie Heights in Anne Arundel County, Eagle Development has units priced at $99,900.
* Condominium conversions: The Belvedere Court apartments conversion has one-bedroom residences starting at $33,000. Across the street, the Belvedere Hotel conversion contains units selling for $39,990. At the HighPointe development off Cold Spring Lane, units start at $44,900.
* Manufactured housing, an updated form of the "mobile home": At Peppermint Woods in the Middle River section of Baltimore County, Williams Management is selling factory-built houses for $48,000. (But there is a catch in the form of a $250 to $280 per month "pad rental fee," which makes the monthly mortgage payment about the same as that of a $70,000 house.)
"If people can deliver a decent product at a reasonable price, it strikes a chord. It really meets a demand," said Robert Lefenfeld, vice president of Legg Mason Realty Group.
Still, the disparity in affordable housing within the Baltimore region raises some troubling issues, he says.
"From a public policy standpoint, can a local government say, 'You must live in one section of the county and not another section,' or should it be the public policy that people can live in any section of the county?
"To take it a step further, should you be excluded from a county in the Baltimore-Washington corridor because the high-priced housing spilling over from the Washington area is making it impossible to afford housing there? . . .
"The issues have just become more complicated and more complex over the years. Should it be that public policy guarantees that everyone has a choice? The issue is: What is your choice?"