• Please Join the Arlington Greens on Wednesday, May 3, 2017 at 7:30 pm at the Community Room of the Arlington County Fire Station 2 Ballston, 4805 Wilson Blvd Arlington, VA 22203

January 5, 2016

County Board overpaid more than twice the actual costs for the latest subsidized housing project on Columbia Pike

On December 12, 2015, the Arlington County Board approved giving about $19 million in local housing funds and up-zoning of a property to high-rise commercial development to create a new subsidized housing project with 173 apartments in two 7-story buildings on Columbia Pike. The county board approved this Arlington Presbyterian Church (APC) housing project despite evidence that the land cost was above other commercial sites, and the construction cost was more than double what an apartment should cost in the Washington, D.C. Metro area. A private nonprofit organization APAH and a pool of private investors and developers will build and own this project.

Then county board chairman Mary Hynes said during the board’s public discussion of the APC project that the $8.5 million cost of the) property was reasonable even though the county’s assessed tax value was half this amount $4.3 million. She said that a price of $5 million per acre is a reasonable for land already zoned for commercial use.
arl presbyterian church jan 16 pic3

Unfortunately, the county board paid a price of $7.1 million per acre. The property was not zoned for high-rise commercial use and thus worth far less. However, even using Ms. Hynes’ inflated price of $5 million/acre, the county should have only paid $6 million for the land, and thus overpaid $2.5 million or 42 percent.

The county staff report to the county board indicated APAH and the APC had privately and earlier agreed to the $8.5 million, and they asserted without proof that the commercial value of the property was really $10 million or about double the price of other commercial land in the county. Without substantiation of these ten million dollars, one can only conclude this is wishful thinking and hyperbole.

The county was NOT a party to the negotiation of this $8.5 million price, and had no assessment of the property’s value. The county was negligent in not obtaining its own independent assessment of the property as then zoned for residential and church use only.
APAH’s pool of private investors will actually own the project and land, and the county government did not become the legal owner of the property even though the count paid for the land. APAH and its investors are going to sell off residential lots behind the new buildings for single family homes. Some of this space is already used for a tot lot and for green space that will be lost. This land could have been kept for a small park and retaining green space for the neighborhood if the county government owned the property. With probably 300 tenants including children living in the new project, this park would have been used and sorely needed.
arl presbyterian church jan 16 pic3

The construction costs for the APC project are well above what industry sources indicate are multifamily apartment costs. A well known industry leader R.S. Means Company has estimated that hard construction cost of a new apartment in a 4-7 story building in the DC Metro region is between $172-200 per square foot. The cost per unit of the APC project was $395 per square foot. Thus, APC construction costs are twice what a new apartment should cost in the DC Metro area. Total hard construction costs for the APC project were about $41 million for 173 apartments or $237,000 per apartment which is roughly $395 per square foot for a 600-square foot apartment.
The combined over-costs for just land and hard construction costs (not even considering the other inflated costs) were about $22 million for a total project cost of $67 million.

Arlington Greens have asked the county board on several occasions to use competitive bidding to avoid overpaying for construction of new CAF projects such as these, but they always choose to use a sole source contractor. Other county construction projects are all bid and given to the low cost bidder. This is irresponsible stewardship of scarce county funds for housing assistance.

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December 9, 2015

Housing project proposed at Arlington Presbyterian Church site does not provide assistance for lower income renters

Statement to the Arlington County Board Dec. 9, 2015 on a proposal to provide $19 million in local funds to build at new apartment building at site of Arlington Presbyterian Church and to rezone the property to provide higher density (item 31 of the Arlington County Board’s meeting on Dec. 12, 2015:

Good afternoon, members of the Arlington County Board:

The Arlington Greens oppose the rezoning of the Arlington Presbyterian Church, and oppose approval of approximately $19 million in county housing assistance funds to build a new apartment complex at this site.

Rather we favor using the $19 million for $200 per month housing rental vouchers for the 7,000 needy Arlington families needing housing assistance across the entire county. We believe low income housing should be widely spread out across the county and not concentrated within one small area along western Columbia Pike, and housing grants to 7,000 households located across the entire county are the best and lowest cost way to do so.

arl presbyterian church jan 16 pic1

It is worthwhile to look at affordable housing projects costs in surrounding jurisdictions or in other locations in our county so that you have some sort of basis to compare the nearly $20 million requested for the project at the Arlington Presbyterian Church. This way, the County has leverage against any bids proposed by developers, and can drive down these excessive construction costs.
This plan would cost the County nearly $400,000 per affordable unit. This excessively high cost means fewer desperately needy families could be served. Please postpone any consideration until you have evaluated alternatives–such as providing direct housing grants or building a totally different project with a different developer at a much lower cost.

The new proposed apartments serve middle class renters and not the low income in Arlington
The proposed high-rise project at the Arlington Presbyterian Church at 3507 Columbia Pike will have two new buildings with 173 apartments, all of which are to be “affordable rentals” to households earning at least 60 percent of the area median income (AMI) (around $60,000 for a family of three persons).

Unfortunately for nearly all such Arlington subsidized projects, only 5 percent of the units will be affordable to truly low income Arlington families, i.e. those making 40 percent or less AMI (generally making $15,000 to $39,000 a year) and those who most desperately need housing assistance in Arlington today. The lucky few renters in the new project will probably get a de facto rent subsidy of $200 a month below comparable rents along the Pike.
house_sketch

These new apartments will each cost $393,000, and the county will provide $105,000 per unit in its local AHIF funds ($18.2 million), and then another $0.7 million from a Pike transit fund. This is not the best use of $19 million in local housing funds–it wastes far too much on bricks and cement, and does too little to lower rents and to broadly help lower income renters across all of Arlington.

Better housing assistance approach for the $19 million in county funds
Alternatively with the $19 million, the county could help ALL of the approximately 7,000 cost-burdened low income households in the entire county for one year each with a $200 monthly housing grant. The recently adopted Affordable Housing Master Plan identified 7,000 such households needing housing assistance. It is far better to help 7,000 households than just 173.

Excessive land costs for the project
We also have concerns about excessive costs in this project. The Presbyterian Church members are getting $8.5 million from the county for the land. The church is actually contributing nothing for this affordable housing project and walking away with over $8 million.

The county is paying twice the current commercial assessed value of the property which is $4.3 million. Why is the county paying twice the commercial value? Who negotiated this price—the county government or APAH and the church, and why should the public pay twice the commercial value? You are asked in this proposal to rezone this property from residential use to high-density commercial, and then implicitly the church owners reap this windfall profit in the form of the $8.5 million payout from the county.
Too many subsidized apartments in west Columbia Pike area and too few in north Arlington
Since the county has to purchase the land at such a high cost ($50,000 land charge per unit), there is no advantage economically to locating these 177 apartments at this site. Why not build the next subsidized apartment complex on the 5-acre county owned Edison Street site adjacent to the Virginia Hospital Center or on the 13 acres on the North Quincy Street site across from W-L High School? Why are you concentrating most of the new subsidized apartments built in the county in the past five years in the western Columbia Pike area? We need subsidized housing in North Arlington as well.

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November 5, 2014

Vihstadt wins re-election with Greens support

John Vihstadt, an independent candidate for Arlington County Board, won re-election on November 4 with strong Green support, with about 55 percent of the votes cast. A number of Arlington Greens worked at the polls for him as well as contributing money. Democrats, Republicans, independents and Greens in Arlington all supported him. He was the first non-Democrat to be elected to a four year term on the county board in decades.

Greens supported him in his April victory for a midterm election, but he had to stand for election for the full 4 year term in November.

The key issues were the proposed Columbia Pike trolley projected to cost in excess of $300 million from local sources and other financial excesses of the ruling county board Democrats who have controlled Arlington for over 30 years. Arlington Green candidates for many years have opposed the Columbia Pike trolley because of its excessive cost (relative to a rapid bus system), its adverse effect on eliminating affordable rental housing on the Pike, and its negative environmental impact as compared to a rapid bus system.

greens photo with vihstadt nov 5 2014
Arlington Greens Marie Pellegrino and Sandra Hernandes are pictured alongside John Vihstadt at his victory celebration following the election

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April 16, 2014

Overblown and overstated new subsidized apts on the Pike–too few and too expensive

Open Letter to the editor of the Washington Post April 15, 2014
from AGP chairman John Reeder

It is commendable that the City of Alexandria and Arlington County are attempting to preserve existing affordable rental housing in Arlington, but the article overstated the number of truly affordable units created in two apartment complexes recently, and overlooked how inadequate are the housing programs in these two jurisdictions (Patricia Sullivan, “For thousands looking for affordable rentals about 200 more in Northern Virginia,” April 12). The Serrano Apartments in Arlington and the Hunting Terrace Apartments in Alexandria, the Post indicated, together will add “more than 200 units,” but the actual affordable units added are closer to 60.

solar panels commercial

In exchange for $16.5 million in Arlington local funds (and probably tens of millions of more dollars in Federal tax credits), the developer of the Serrano is providing only a net new 64 apartments that meet the “affordable” definition under HUD regulations out of the 280 apartments in the building, i.e. affordable to households making 60 percent or less of the area median income.

The Alexandria project is much worse: only 24 affordable apartments out of 443 new units. Since 115 units of the now existing Hunting Terrace Garden Apartments will be demolished, and probably 20 percent or so rented for affordable levels (a one-bedroom rate of $1,200 a month), the Alexandria project will add a net zero affordable apartments. Bottom line for the two projects: about 64 new affordable units in Arlington and none in Alexandria.

The cost to Arlington County and local taxpayers to add 64 net affordable apartments will be $250,000 per apartment. These apartments are so expensive that only persons making generally above 60-percent of the area median income or $64,000 for a family of four qualify. Tenants making $30,000, 40,000 or even $50,000 a year cannot rent these new units.

According to data of the Virginia Tech Center for Housing Research, the City of Alexandria has the least affordable rent apartments in the State of Virginia and the entire Metro D.C. region. Arlington is the second least affordable place. This is no accident, but a deliberate policy in both areas.

Both jurisdictions over the past two decades have embraced development policies designed to displace residents and tenants making under $60,000 a year. Both operate expensive and largely ineffectual housing programs and refuse to adopt new housing approaches that could cost effectively keep or add affordable units for lower income and working people already living there.

Note.–this is personal opinion of the writer and does not necessarily repreent the views of the Arlington Green Party.

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March 28, 2014

County-paid study supports trolley, but ignores Arlington’s office space glut

The Washington Post this week described an eonomic study of the benefits of building the Columbia Pike trolley as being highly beneficial to developers and landowners, but of course used past economic data that reflected a commercial offic space boom prior to 2012 that has come to a screeching halt.
http://www.washingtonpost.com/local/consultants-columbia-pike-streetcar-would-bring-more-money-growth-than-bus-transit/2014/03/26/a8e7cb14-b518-11e3-b899-20667de76985_story.html

The county spent $98,000 for this study which of course supported the county board’s view.
If this is such a great deal to invest well over $350 million, why don’t the developers and commercial landowners along the Pike pay for it? This is a classic ploy to get the public to pay for something that benefits private landowners. The building of such a trolley will take five years and involve massive traffic backups and inconvenience for Arlington residents.

Moreover, if the county has to spend many hundreds of millions of dollars just to preserve what little affordable rental housing is left on the Pike, as well as public infrastructure to support more residents and businesses, the $310 million to $750 million in new local tax revenues will disappear rapidly.

Former Arlington County board member Chris Zimmerman who was the chief patron for the trolley made clear from the beginning that his primary objective for the trolley was development, not transportation.

Another major flaw of this study is of course that it assumes that favorable commercial office space and luxury apartments market will continue at its pace of the past ten years. The trolley was proposed more than 10 years ago when development was occurring at a rapid pace; Arlington avoided the effects of the 2008 recesssion owing to higher military/national security spending. Now that spending is dropping like a stone, federal government contracts dropped over a third in the latest quarter in the Metro DC area.

As to the development goals of fully developing the Columbia Pike area, no one seems to pay attention to what is happening in the already developed areas of the county–Crystal City, Pentagon City, Rosslyn, and yes even to Courthouse, Clarendon, Va Square and Ballston. The commercial office vacancy rates there range from 25 to 15 percent and are rising. In the fourth quarter 2013 there are the equivalent of 22 empty office buildings just in Rosslyna and Crystal City areas (see related article on office space glut below).

Why would any business lease space farther out on the Pike when there is abundant vacant space along the Metro rail corridors? street carEven building new luxury rental apartments and/or condos along the Pike may be a bad idea. Without high paying military contractors and the military, renters cannot afford to pay these

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