(William Waters Apartments from Wesley Housing Development Corporation)

On July 24, the county board approved a nearly $1 million loan to Wesley Housing Development Corporation to renovate 21 already subsidized apartments at the William Waters Apartments located on Adams Street off Lee Highway. These units were substantially renovated about 9 years ago, but Wesley Corporation will spend another $400,000 per unit to upgrade them. It will then raise the rents on the units, and then the county government will have to pay for the higher rent levels because the tenants cannot afford them! The new rents charged will not cheap-$1,130 for a one-bedroom and $1,330 for a two bedroom, but the tenants today cannot afford these new higher rents, so the county has to provide over $100,000 to pay part of the higher rents that go up because of the lavish renovation.

The county board’s decision to finance renovation of the William Waters Apartments, a garden apartment building off Lee Highway with 21 CAF units, and to finance tenant displacement costs is an example of Arlington’s wasteful approach to spend $400,000 per unit to renovate perfectly good apartments at William Waters.

There was no proven need to renovate the building; according to Wesley Housing Corporation’s webpage, these apartments were substantially renovated in 2005 with new kitchens, wall repairs, windows, smoke detection system, roof, rehabilitated electrical system, wall plaster and convectors.

And even if there is a need to renovate, a NEW apartment can be built for about $130,000 in the Washington DC region according RS Means, a construction expert firm. So how can $400,000 be spent in just renovation? Better to tear it down and build new apartments at one-quarter of this renovation cost of 50 year old modest units.

Today 9 years after the 2005 renovation, Wesley proposes to spend $8.2 million to again renovate 21 apartments at a unit cost of about $400,000 per unit. The hard construction cost is $100,000 per unit—about what a totally new unit would cost; the remaining $300,000 are soft costs, the developer’s fee, and repayment of past loans and financial costs. Spending $400,000 per unit to renovate apartments that are otherwise okay is wasteful.

Crony capitalism is the game being played with Arlington County housing program dollars. Tenants are made worse off and scarce taxpayer dollars given to insiders and their corporate friends.

There was $151,000 given to Wesley for a tenants assistance fund that would pay for their moving expenses and to pay the higher rents after they move back into the renovated units. Wesley bears responsibility for assisting and relocating their tenants, and not the county. Wesley in 1990 entered a contract with the county to supply 21 CAF apartments for 30 years, and has a contractual obligation to these tenants as well. Moreover, why does Wesley have to charge higher rents that its current tenants cannot afford to pay? This is not affordable housing but UNAFFORDABLE housing!

(Photo from Wesely Housing Development Corporation)

The Arlington County Board on July 23, 2014 approved a nearly $7 million loan from the county’s affordable housing investment fund to Wesley Housing Corporation and its corporate partner Bozzuto to build a new apartment building with mostly luxury rental units at Pierce Queen Apartments in Rosslyn. The project is really not about affordable housing at all, but about a developer Bozzuto building a 12 story new commercial apartment building in Rosslyn with the county government and federal government financing it. It is really an stark example of the county’s failed housing program and another example of the county’s unaffordable housing program.

In brief, the project will cost about $36 million and will net the county government about 26 more subsidized units which is about $1.3 million per new unit! The county’s $7 million loan to the developer works out to about $250,000 per CAF unit. The kicker is that all the tenants living in the 78 subsidized units will then have to pay higher rent-and the county will have to pay part of the higher rents because the tenants do not earn enough money! So the county actually made things WORSE for tenants by allowing unneeded renovation.

The current Pierce Queen Apartments have 50 subsidized apartments, and 28 additional units (CAFs) will be added. Unfortunately the cost per new unit added is extraordinary high, and in addition rents will be raised in order to pay for these expensive new units.

The proposed project will have 78 CAFs, an addition of 28 CAFs. The total cost of the project is $35.6 million so the marginal cost of adding 28 new CAFs is $1,271,000 each. The unit cost for all 78 CAFs is $456,000. Either way, it is ridiculous to be paying either sum for a modest apartment.

In terms of the use of the county’s AHIF, the cost per new CAF is $250,000; the cost for the new CAFs and the current CAFs is lower $89,000 per unit. However, the 50 CAFs already at the complex were paid for years ago with federal and county financing and should not be counted.
The county government’s housing target is to add 400 new CAFs per year; last year the county added 55.

The 78 CAFs at Pierce Queen will be rented to higher income persons: 40 units to renters earning up to 50% AMI and 38 units for renters earning 60% AMI. This project will not meet the county’s housing target that at least 25% of new CAFs be affordable to people earning 40% AMI.

Is this the best deal the county government can get to add new CAFs in Arlington, and is this the best use of the limited AHIF funds? The county housing target is to add 400 new CAFs a year, and it cannot done at at a cost of a million bucks per unit nor even at $250,000 of AHIF funds per new unit. Four hundreds new CAF units at this rate would cost $100 million dollars in capital spending annually.

Wesley already received substantial county and federal funds to purchase and renovate Pierce Queen, and is contractually required to keep these 50 apartments for many years more. Why did the county government let Wesley out of its contractual agreement to provide 50 low cost CAFs?

The county Board needs to ask hard questions of your housing staff as to why these un-affordable housing projects are so expensive, and how it can find developers who can truly build affordable low cost apartments.

Arlington Green John Reeder spoke at the Arlington County Board meeting on July 19 about affordable housing.

Good morning members of the Board.

I am here today to discuss affordable housing and why giving away free public land to high cost government contractors is a bad idea, and failing to address high cost housing is a mistake.

In 2013, the county added only 55 CAFs or 14% of the 400 goal to the current 6,500 CAFs. The CAFs added were very expensive per unit, and land costs were often small or irrelevant to the high costs.

Look at two recent projects: The Carlyn Springs Apartments and the Arlington Mills Apartments.

In January 2014, you (the county board) gave an $8 million loan to APAH to build 71 new CAF apartments at the current Carlyn Springs Apts complex which APAH already owns. The average cost of the 71 CAFs was $538,000 each. APAH already owned the land so the cost of this land was free.

Then about 4 years ago, you gave APAH free public land at Arlington Mills site and loans to build 122 CAF apartments. The cost was $250,000 per unit. Most renters accepted earned over 60% of area median income ($67,000).

Nearly all of the for-profit and non-profit developers of CAFs in Arlington are very high cost and highly inefficient.

Free land does not mean low cost apartments.

The CAFs are so expensive that only higher income people can afford to rent, and, of course, then the county can only add 50 CAFs a year too few to meet our need.

The county board government needs to hire low cost builders; the Fairfax Housing Authority builds its CAFs in Fairfax County for $100,000 each which it then rents mainly to families earning under $40,000 a year.

Great music from Still Standing Band at our picnic on July 20 at Potomac Overlook.

Below are Greens Kirit Mookerjee, Miriam Gennari and Steve Davis with John Vihstadt, independent county board member who attended as well. We support him in the coming November election and were a key part of his victory in last Springs election