Issue Position: A Place to Call Home

Issue Position

My great grandmother's house wasn't very large, but that one bedroom in the heart of Kingston, Jamaica was her home.

Every day, she would sweep the floors clean, taking pride in the little that she owned. Raised by his grandmother in that small but loving home, my father grew up believing--and later taught me, my brothers, and my sister--that strong communities are built, not born, and they're built on the foundation of ensuring that all of our neighbors have access to safe, quality, affordable housing for themselves and their families.

Over the past seven years, we've made real progress in this effort. We've started construction on over 16,000 new rental units throughout our state(1) and, in 2012, made a record increase in affordable housing funding through our Rental Housing Works Program(2). This year, we will leverage a combined $285 million in public and private investment to build and preserve over 1,800 new affordable rental housing units which will support 2,500 jobs for Marylanders(3).

But for all of our progress, we still have work to do. Today, more than half of all Maryland renters spend more than 30% of their income on rent and too many of our neighbors are struggling to find a safe, affordable place to call home(4).

Investing in affordable housing creates jobs, encourages private investment in our communities, and generates economic activity throughout Maryland(5). It's also a smart investment for our state, as even modest affordable housing funding can result in billions of dollars in economic activity(6).

We can't and we won't do this alone: our partners in the private sector, non-profits, and local governments will play a critical role in expanding affordable housing in Maryland.

As we look to the future, we must adopt a comprehensive, balanced, and integrated approach to housing. We need an approach that addresses housing needs while focusing on goals and desires of the larger community: encouraging smart growth and access to transportation, supporting local schools, maintaining a clean environment, and providing job opportunities to our neighborhoods.

Through the Brown-Ulman Affordable Housing Plan, we'll: 1) modernize the Maryland Affordable Housing Trust; 2) Create the Transit-Oriented Housing Revolving Loan Fund; 3) create a Statewide Affordable Housing Plan; 4) align priorities across State agencies; 5) incentivize the creation of affordable housing at the local level; 6) strengthen the Department of Housing and Community Development; and 7) combat homelessness throughout our state.

Together, we're going to build strong and stable communities, support families, expand opportunity to more of our neighbors, and ensure that every Marylander has a place to call home.

Mission: The Brown-Ulman administration will promote safe, stable communities by expanding affordable housing opportunities to more Marylanders.

1) Modernize the Maryland Affordable Housing Trust

Dedicate $20,000,000 Annually in New Revenue

We will modernize the Maryland Affordable Housing Trust (MAHT) by creating a new dedicated revenue stream. Since its inception in 1992, MAHT has distributed over $41,000,000 in grants to affordable housing development across Maryland(7). However, the annual funding averages just under $2,000,000.

Combined with the existing revenue stream from interest on escrow accounts, we will dedicate approximately $20,000,000 annually in order to bolster the impact of MAHT.

Eliminate the Cap and Expand Eligibility

MAHT grants are currently capped at a maximum of $150,000 per project. In order to make a sizable contribution to development projects and optimize the impact of the fund, we will eliminate the cap, allowing more dollars to flow to the projects of the greatest impact. Further, we will include mixed income and workforce housing development among eligible recipients and adopt guidelines to ensure that funds go to projects that address the greatest need in the community.

By dramatically increasing the State's investment and raising the total MAHT may invest in each project, we will leverage State investment to bring more affordable housing units to market.

Cost: We will dedicate the equivalent of one eighth of a percentage point (.125%) of the 8.25% Corporate Income Tax to fund the MAHT, which will amount to approximately $20,000,000 annually.

2) Create the Transit-Oriented Housing Revolving Loan Fund

We will incentivize Transit-Oriented Development (TOD) inclusive of affordable and workforce housing by creating the Transit-Oriented Housing (TOH) fund. The fund will administer loans on a revolving basis, in order to provide low-interest financing for the development of new or rehabilitation of affordable and workforce housing in proximity to existing and proposed public transit. The fund will be modeled on Denver's successful public-private partnership model, although our program will be focused on financing for construction and rehabilitation as opposed to land acquisition. The fund will be actively managed by a non-profit entity, which will invite capital contributions from non-profit and for-profit investors. Since launching its fund in 2010, Denver has leveraged nearly $200,000,000 for TOD projects, and assembled over $15 million in capital(8). The Maryland TOH fund will be used to develop workforce and affordable housing near public transportation hubs, connecting communities to public transportation which provides residents easier access to jobs and services.

Cost: We will capitalize the fund with a $2,500,000 annual investment between FY2016 and FY2019. Additional funding will come from private contributions. Conservative management of the fund and the revolving nature of loans will make the fund self-sustainable.

3) Create a Statewide Affordable Housing Plan

We will create a Statewide Affordable Housing Plan, which will guide our efforts to support future development and retention of affordable housing across Maryland. Building on the sustainable growth principles outlined in "Housing Maryland: A Housing Policy Framework for Today and Tomorrow,"(9) we will identify and implement tangible goals and recommendations that will maximize the impact of public and private investment in affordable housing.

The Plan will be developed by a Commission on Affordable Housing, which will recommend specific affordable housing goals, targets, and policies to be adopted by the State and encouraged for local governments. The Plan will include mixed income and mixed use development goals, including workforce housing -- defined as 60 to 120 percent of area median income(10). It will also encompass recommendations to address the specific needs of vulnerable populations, including senior citizens and Marylanders with disabilities. The Commission will be comprised of representatives of a cross-section of State agencies, Public Housing and Redevelopment Authorities, local planning and zoning administrators, for-profit and non-profit developers, service providers and other key stakeholders.

The Commission will also evaluate the effectiveness of the various existing affordable housing funding programs administered by the Department of Housing and Community Development (DHCD) and, where appropriate, recommend efforts to consolidate or reconfigure programs to maximize their impact. We will also ask the Commission to consider the efficacy of establishing a State Low Income Housing Tax Credit to mirror the existing Federal credit, a model employed by the States of Georgia(11) and North Carolina(12).

This plan and the participants will be appointed and a draft plan will be complete by September 1, 2015 for statutory recommendations to be implemented in the 2016 legislative session.

Cost: We will allocate $300,000 in FY2016 to fund the development of the Statewide Affordable Housing Plan and to staff the Commission.

4) Align Priorities Across State Agencies

We will align priorities across State agencies to more efficiently and effectively develop affordable housing in sustainable communities, in line with our Statewide Affordable Housing Plan. In order to implement this vision, we will foster cooperation and investment between agencies, including staff resources and funding. For example, by encouraging cooperation between the Department of Housing and Community Development (DHCD) and the Maryland Department of Transportation (MDOT), we will successfully integrate affordable housing and transit investment. Similarly, by working alongside the Maryland Department of Planning (MDP) and the Maryland Department of the Environment (MDE), we will bolster the resources and expertise necessary to ensure that new development adheres to our sustainable growth and environmental principles.

The Affordable Rental Housing Opportunities Initiative for Persons with Disabilities has been a successful example of cross-agency collaboration. To accomplish this end, the Department of Disabilities has partnered with Maryland's Housing Finance agency, the Maryland Department of Housing and Community Development, and the Maryland Department of Health and Mental Hygiene to administer the Harry and Jeanette Weinberg Housing Opportunities Initiative for Persons with Disabilities(13). This The Affordable Rental Housing Opportunities Initiative for Persons with Disabilities has been a successful example of cross-agency collaboration. To accomplish this end, the Department of Disabilities has partnered with Maryland's Housing Finance agency, the Maryland Department of Housing and Community Development, and the Maryland Department of Health and Mental Hygiene to administer the Harry and Jeanette Weinberg Housing Opportunities Initiative for Persons with Disabilities. This sort of collaboration has also been done successfully by the federal government to develop affordable housing in sustainable communities(14).

Cost: We will implement this proposal with existing resources.

5) Incentivize the Creation of Affordable Housing at the Local Level

We will incentivize the creation of more affordable housing through a strong partnership with our local jurisdictions. In order to address the shortage of affordable housing as effectively and efficiently as possible, we will prioritize State capital investments in jurisdictions that develop and implement comprehensive, locally-appropriate affordable housing policies. County affordable housing policies should incorporate best practices, such as inclusionary zoning(15); density bonuses; preferences for mixed-use, mixed-income, and TOD; local housing trust funds; and incentives for removing blight from distressed neighborhoods.

Cost: We will implement this proposal with existing resources.

6) Strengthen the Department of Housing and Community Development

Streamline the Approval Process

We will streamline the approval process for affordable housing financing administered by DHCD. Working with our partners at the U.S. Department of Housing and Urban Development (HUD), local government, and the affordable housing community, we will make the process faster and more predictable by increasing staff and revising policies and procedures related to financing allocation to ensure alignment with the goal of maximizing the growth of our affordable housing stock.

We will also move to a single, uniform application for all affordable housing financing. Modeled on the Commonwealth of Massachusetts's application(16), this will allow developers to more easily apply for and assemble financing for affordable housing projects. A developer will complete one application, and if the project is approved, DHCD will then assist the developer to find financing from the multiple state and federal programs as well as other sources, making the entire process more straightforward, and ensuring greater collaboration between DHCD and developers.

We will also revamp scoring criteria for competitive financing proposals to ensure we incentivize projects that achieve positive tangential benefits such as the elimination of blight through demolition or renovation. Under current guidelines, the costs of demolishing vacant structures are counted against the score of a project. We will, instead, make blight removal a positive factor in scoring and reward projects that beautify and stabilize communities.

Increase Transparency and Accountability

We will increase transparency and accountability in affordable housing development by regularly publishing updates on projects receiving State funding through Statestat. Publicly accessible information might include: the location of the project, size of the project and number of affordable units projected, subsidies received from the State, and estimated completion date. The City of San Francisco publishes a quarterly "Pipeline Report" outlining all residential and commercial development(17). We will help the public and the development community to better understand how we are aligning State-administered financing toward meeting the need for more affordable communities by replicating this model in partnership with local jurisdictions. We will also utilize Statestat to publish our progress toward meeting the goals and targets defined in our Statewide Affordable Housing Plan.

We will also increase training opportunities for all financing applicants in order to help them better understand the range of affordable and workforce housing programs. Through education and outreach, we will make the funding process more accessible to non-profit and for-profit entities.

Cost: We will allocate $1,000,000 annually for DHCD to hire the additional personnel to streamline affordable housing approvals, conduct additional training, and administer increased funding outlined herein.

7) Combat Homelessness

Build Transitional Youth Housing

In January of this year, we announced our plan to help more Maryland foster children avoid homelessness. A key element of our vision for foster care is ensuring access to transitional housing for youth aging out of the system. Foster youth aging out of the system experience increased risks of homelessness. Nationally, between 12 and 30% of youth aging out of care struggle to find a permanent home(18). We will dedicate funding to construct new housing and retrofit previously-utilized buildings -- including former group homes -- for young adults.

Invest in Veterans Housing

We will also work to combat homelessness among our State's veterans. Estimates indicate that on any given night, more than 60,000 veterans are homeless nationally(19). HUD also notes that homeless veterans are disproportionately minorities(20).

To help reduce the number of homeless veterans and provide those veterans in need of transitional and permanent housing with a safe place to live. The Rental Housing Works (RHW) program provides gap financing for the development and preservation of affordable housing in combination with Maryland's Multifamily Bond and Low Income Housing Tax Credit programs(21). We will increase our investment in RHW by $5,000,000 a year and ensure that at least 20% of the funding goes towards veterans housing.

Cost: We will dedicate $3,500,000 annually to fund new construction and renovation projects in partnership with the non-profit community and local governments to help low-income young adults avoid homelessness.

Expand the State Employee Innovation Initiative

Maryland has an innovation incentive framework that is intended to encourage Maryland State employees to suggest ideas that change the way we approach the delivery of public services and save taxpayer dollars. However, the law only includes executive agency employees and application of the program varies between departments. We will expand the innovation incentive program to all State employees and increase the maximum award. We will also encourage participation by hosting an annual award ceremony to recognize the innovative contributions of State employees. The White House(22), Washington(23), West Virginia(24), Florida(25), Utah(26), and others, all have similar incentive programs. In a $38,700,000,000 budget(27), we will identify the .07% savings necessary to reinvest in the affordable housing priorities outlined in this plan.

Citations

[1] Budget Analysis -- Department of Housing and Community Development, Maryland Department of Legislative Services, FY 2015, page 8
[2] 2013 NCSHA Awards Application, Maryland Department of Housing and Community Development, page 4
[3] Maryland Budget Highlights FY2015, Maryland Department of Budget and Management, page 11
[4] Housing Maryland: A Housing Policy Framework for Today and Tomorrow, Maryland Department of Housing and Community Development, December 2013, page 7
[5] The Role of Affordable Housing in Creating Jobs and Stimulating Local Economic Development -- Evidence in Brief, Center for Housing Policy, January 2011
[6] The Role of Affordable Housing in Creating Jobs and Stimulating Local Economic Development: A Review of the Literature, Center for Housing Policy, January 2011, page 6
[7] Maryland Affordable Housing Trust -- Annual Report, Maryland Department of Housing and Community Development, FY 2013, page 3
[8] Denver Transit-Oriented Development Fund, Urban Land Conservancy
[9] Housing Maryland: A Housing Policy Framework for Today and Tomorrow, Maryland Department of Housing and Community Development, December 2013
[10] Affordable/Workforce Housing Study, Land Watch Monterey County, 2003
[11] Federal and State Housing Tax Credit Programs, Georgia Department of Community Affairs Website
[12] Our Financing, North Carolina Housing Finance Agency Website
[13] The Harry and Jeanette Weinberg Foundation's Affordable Rental Housing Opportunities Initiative for Persons with Disabilities, Maryland Department of Disabilities
[14] About Us, Partnership for Sustainable Communities, An Interagency Partnership
[15] Affordable Housing in Metropolitan Maryland: A Policy Analysis, Department of Public Policy, University of Maryland Baltimore County, March 2004, page 40
[16] Documents for Developers, MassHousing, Massachusetts Department of Housing and Community Development
[17] San Francisco Pipeline Report -- Fourth Quarter 2013, San Francisco Planning Department, February 2014
[18] "Facts About Aging Out," Children's Rights Website
[19] "HUD REPORTS SLIGHT DECLINE IN HOMELESSNESS IN 2012," U.S. Department of Housing and Urban Development, December 10, 2012
[20] "Background & Statistics," National Coalition for Homeless Veterans
[21] Multifamily Housing Development -- Rental Housing Works, Maryland Department of Housing and Community Development http://www.dhcd.state.md.us/website/programs/RHW/Default.aspx
[22] The President's Save Award, The White House
[23] "State employees honored for saving the state more than 3 million dollars in 2006," Washington Office of the Secretary of State, February 7, 2007
[24] Employee Suggestion Program, West Virginia Division of Personnel
[25] Alcock, Andy. State Workers Honored For Saving Taxpayers More than $558 Million, WCTV, April 3, 2014
[26] Incentive Awards, Utah Department of Administrative Services -- Internal Policies and Procedures, June 13, 2013
[27] "Maryland General Assembly passes $38.7B budget," The Washington Time, April 5, 2014

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