1. Unfulfilled Promises: Affordable Housing in Metropolitan Washington Presentation to the Metropolitan Washington Council of Governments Mary Anne Sullivan, Partner Deepika Ravi, Associate April 17, 2015

2. www.hoganlovells.com Introduction Collaboration between Hogan Lovells and the Washington Lawyers’ Committee for Civil Rights and Urban Affairs –Report does not seek to provide a comprehensive analysis of all affordable housing tools in every jurisdiction in metropolitan Washington. Focus: a handful of tools that –do not require substantial new funding, and –can, if used effectively, begin to address the large unmet need in the region for affordable housing. 2

3. www.hoganlovells.com Jurisdictions Studied District of Columbia Alexandria Fairfax County Arlington County Prince George’s County Montgomery County 3

4. www.hoganlovells.com Recommended Affordable Housing Tools Housing Production Trust Funds Public Land for Public Good Public/Private Partnerships Inclusionary Zoning Accessory Dwelling Units Workforce/Employer Assisted Housing Rapid Rehousing and Emergency Rental Assistance 4

5. www.hoganlovells.com Housing Production Trust Funds Many different names; key is dedicated source of funds for additions to affordable housing –Often tied to real estate transfer or similar taxes –Can take funding out of annual budget scrum –Can be used to meet the needs of the most needy Challenges –Subject to diversion in tight budget times –Limited funding levels Path forward –Adopt in Prince Georges –Fully fund in all jurisdictions 5

6. www.hoganlovells.com Accessory Dwelling Units Independent living quarters on single family lots –No need for public funds –Allow elderly to stay in their homes –Potential to increase affordable housing by 10% Challenges –Sharply restricted by zoning rules –Generally not suitable for large families Path forward –Ease zoning; tie to affordability –Build public support 6

7. www.hoganlovells.com Public Land for Public Good Public land holdings can represent an important asset in the effort to increase affordable housing –Unused public land and buildings, surplus land adjoining public facilities, land near or at transit stations Challenges –Mature region, limited unused assets –Ongoing need to enforce requirements Path forward –Surveys to understand available assets –Commit to use for affordable housing 7

8. www.hoganlovells.com Inclusionary Zoning Capitalizes on local development, trading zoning flexibility for affordable housing units. Challenges –Excessive exemptions/exceptions –Short control periods –Lack of land for new development Path Forward –Adequate control periods –Local government purchase rights –Low trigger thresholds –Limit exemptions 8

9. www.hoganlovells.com Public/Private Partnerships Used for construction of new affordable housing and management of existing developments. Challenges –Execution –Small Scale Path Forward –Accountability –Longer Control Periods 9

10. www.hoganlovells.com Workforce/Employer-Assisted Housing Typically provides workers with rental assistance or forgivable, low- or zero-interest loans or grants to assist with initial costs of home purchase. Challenges –Lack of understanding/familiarity –Unfavorable tax laws Path Forward –Advocacy –Link EAH to regional economic growth 10

11. www.hoganlovells.com Conclusions The region is losing ground –Some programs eliminate more affordable housing than they replace Exceptions, exemptions, grandfathering are a significant impediment to progress Focus on rental units offers more promise of long- term affordability Problem is most severe at the lowest income levels 11

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