Developers, generally speaking, aren't motivated by a desire to build affordable housing, and they aren't inherently opposed to it either. They build what and where they can make money, and that's the beauty of the system of tax credits the federal government and the states administer to encourage them to make sure low-income people can find affordable places to live. Set your scoring mechanism for the tax credits the right way, and developers will compete to provide the units where they're needed.
Unfortunately, Maryland's policies have not historically produced that result, instead concentrating affordable housing units in poor neighborhoods, especially in the Baltimore region, further entrenching a long legacy of segregation. The situation here is so dire that economists found that of the nation's largest counties, Baltimore City comes in dead last in terms of economic opportunity for children who grow up here.
The settlement announced this week by the federal department of Housing and Urban Development between advocates and the state Department of Housing and Community Development offers some hope that we'll finally get it right. It commits the state to helping finance the development of 1,500 affordable units in "communities of opportunity" in the Baltimore region — that is, places with good schools and access to good jobs — with more than 1,000 of them new construction. The theory is that by helping low-income families move to such areas, they can provide their children with a better chance to get ahead in life, and research has shown that such an approach works. It may not improve the economic lot of the parents, but it does significantly boost the long-term prospects of the children without negatively impacting the neighborhoods to which they move.
The devil is in the details, and some still have to be filled in. But what is spelled out in the agreement should help.
One of the key barriers to developing such housing was a well-meaning preference for projects with easy access to mass transit. But in the Baltimore region, that all but excludes most of the suburbs outside of the Beltway. The tax credits are highly sought after and competitive, and a difference of a point or two in the state's scoring scale can make the difference between a project being built or not. Proposals that lose all the possible points from transit access were, thus, at a severe disadvantage. The new agreement allows more flexibility, affording developers the chance to score the maximum number of points in that category by "by providing (or arranging for the provision of) alternate forms of free or subsidized transportation services and assistance … such as on-demand paratransit, vans, microtransit, taxi, 'Uber' or 'Lyft' service, ZipCar' or other car sharing services, or car purchase programs such as Vehicles for Change and Wheels to Work."
Another major issue is the over-building of affordable units specifically for the elderly. While senior citizens deserve to live in safe, affordable housing as much as anyone, the need for young families to live in areas with good schools and access to well paying jobs is simply greater. In the Baltimore suburbs, about two-thirds of affordable units are designated for the elderly, double the state-wide proportion. The consent decree seeks to change that by boosting the score for proposals that include a larger percentage of two- and three-bedroom units.
There is more to be done. The state is due soon to release a draft of its new scoring system for affordable housing tax credits, and it will need some modifications beyond those spelled out in the consent decree. Last year, Maryland awarded 90 percent of its credits to projects in communities of opportunity, but unfortunately, a disproportionate share of them were in sparsely populated rural areas, with three in one St. Mary's County community alone. DHCD needs to make sure the new rules steer more development to the Baltimore suburbs (and to a lesser extent, the Washington suburbs) where it's most needed.
And although the state took a big step forward in 2014 by eliminating a rule that allowed local governments to block affordable housing projects in their jurisdictions, local policies will still play a major role in the success or failure of this effort. Restrictive zoning in many of the region's designated communities of opportunity precludes the construction of more dense housing or apartments, making low-income developments fiscally unfeasible even with tax credits. Jurisdictions like Baltimore County, which is under its own consent decree with HUD, need to make sure opportunities exist to develop affordable homes in good neighborhoods.
In the long run, we need to be looking beyond the model of low-income developments (whether in communities of opportunity or not) and toward fostering efforts like Baltimore's Housing Mobility Program, which helps low-income families to move into individual homes or apartments in the suburbs or more affluent neighborhoods of the city. The more we can break up concentrations of poverty, the better.