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While there are *always* critics regarding affordability covenants (many common criticisms are echoed here in the comments), these blanket statements do not reflect the reality that there are many low and moderate income residents in the District that find value in finding affordable housing in desirable neighborhoods in the city's core. The lower barriers to entry for affordable units - lower down payments, lower rent, etc. - are what make it possible for many to even consider a certain building or neighborhood. Many moderate income residents are happy having a nice place to live and are willing to trade off some of the limits rather than gamble taking on a huge mortgage burden with the *hope* that property values will rise.

I happen to live in a cooperative which was converted from rental last year through a loan financed through the Department of Housing and Community Development (DHCD). We agreed to live with the 80% AMI restriction in exchange for the low interest loan, but the affordability restriction itself doesn't explicitly mandate a cap on profit for individuals selling their shares (note this is not always the case for subsidized loans, it depends on the project and the financing source). Granted, the covenant does mean whatever price residents do end up selling their shares, it must be affordable to the *next* coop owner who meets the 80% AMI requirement, so there is some flexibility there. But as Cheryl mentioned, many who chose to live at the cooperative end up graduating to the regular market after selling. And let me tell you, there's always a waiting list of people wanting to moving in.

A big part of the opportunity for affordable housing is just that: its affordability means people are allowed to save more of their income rather than struggling as many do, struggling to pay 40% to upwards of 50% of their income on housing in market rate units. IZ may end up being a good way to increase affordable housing at a time when market rate developments continue to pop up at an accelerating rate. It's certainly better than *not* doing anything to address affordable housing, and rent control isn't the answer because it's being chipped away and lost to conversions and decay each year (probably at a faster rate than new IZ or PUD affordable housing is coming on). With more of these affordable units coming on the market, the city needs to work with lenders to help the new residents get loans for the units (and yes, there *are* lenders out there that work with people in affordable units created in this manner, I've met them).

by David on Jul 13, 2012 12:15 pm • link • report