What does it take to develop a new apartment complex in Arlington that will be affordable to people making $48,000 to $97,000 per year (40-80% of Area Median Income for a family of four)?
For AHC Inc.’s newest building, the answer is $100 million. When The Apex opens this spring it will add 256 new units to our community’s housing stock, including 37 three-bedroom apartments—a rare find in Arlington.
Approximately one fifth of the funds to develop the property came from Arlington’s Affordable Housing Investment Fund (AHIF), a revolving, low-interest loan fund that has served as Arlington’s main financing program for affordable housing development and renovation since its inception in 1988.
“Arlington’s loan fund is absolutely essential for building or preserving affordable housing in our competitive real estate environment,” AHC President and CEO Walter D. Webdale said in a recent press release. “Without the AHIF program, many of Arlington’s affordable apartments would not exist today.”
> “Arlington’s loan fund is absolutely essential for building or preserving affordable housing in our competitive real estate environment.””
Webdale said that financing affordable housing requires funding from a variety of sources. That can include federal Low-Income Housing Tax Credits (LIHTC) administered through the Virginia Housing Development Authority (VHDA) as well as other private and public funding streams. (For example, last year the Terwilliger Family Foundation pledged $1.5 million for APAH’s redevelopment of the American Legion Post 139.)
AHIF loans help fill a gap in a project’s development budget to make their affordability feasible. In Webdale’s words, “The AHIF loan fund is the glue that helps cement the financing package.”
Those funds aren’t a one-time gift; they’re loans that are repaid over time. AHC reports it has repaid $45 million since the AHIF program began in 1988, including $710,000 in 2019. Once repaid, funds are re-invested.
But with an average investment of $14.3 million to AHIF over the past five years Arlington can only support about one new affordable housing project per year.
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John Welsh, AHC’s Vice President, Multifamily Group, told AHS supporters at a recent happy hour “there are projects we have had to give up because there wasn’t sufficient AHIF money.”
In the past five years the County has averaged just 298 new, committed affordable units, less than half of its own stated goal of 600 units per year. Plus, over the last twenty years the County has lost 16,000+ market-rate units, including a total of 1,270 in 2019 alone.
With access to more financing, developers could make significantly more progress toward increasing the supply of affordable housing.
That’s why the Alliance for Housing Solutions is asking Arlington County to invest $25 million in AHIF in Fiscal Year 2021, an increase of $9 million over Fiscal Year 2020.
“The County’s appropriation is critical,” said John Milliken, Vice Chair of APAH’s Board of Directors. “We need the County to step up by adding additional funding.”
Last year, the County Board asked the County Manager to review provide recommendations that would increase AHIF contributions by $3, $5, and $9 million. But when the Manager’s proposed budget came out last week, AHIF contributions were only increased by $2.7 million—from $16 million in FY2020 to $18.7 million in FY2021. The manager provided some potential options for other additions, although none reach the full extent of the County Board’s and AHS’s request for up to a $9 million increase.
We must do better if we want Arlington to remain a viable place for people of all walks of life.
Without affordable options, more young professionals, families, and retirees will be displaced. Our community will suffer economically and socially if it loses its diversity.
Investing in affordable housing makes sense, and will pay off for years to come. The sooner we make these investments the more of our low-income neighbors we will be able to keep in Arlington.
Can we count on you to join us in advocating for an investment in Arlington’s affordability?
Here’s how you can help:
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Sign the AHS petition asking Arlington County to increase AHIF funding to $25 million and dedicate additional funds to our lowest-income households.
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Attend Open Door Mondays where Arlington County residents can speak one-on-one or in small groups with a County Board Member in an informal setting. Board Members take turns hosting Open Door Mondays throughout the year in locations across the County.
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Speak at the County Board meeting on March 21 and the March 31 budget hearing. Share your concerns in a 2-5 minute slot during the public comment period.
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Write to County Board Members to tell them you support allocating $25 million for AHIF in fiscal year 2021. Download our letter template, customize, and mail it; or send an email to all the County Board Members.
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Share with your neighbors so they can join us in advocating for members of our community who are most vulnerable to displacement. Download our flyer, or share our information via social media.
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