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

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

Jurisdictions Studied District of Columbia Alexandria Fairfax County Arlington County Prince George’s County Montgomery County 3

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

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

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

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

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

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

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

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

"Hogan Lovells" or the "firm" is an international legal practice that includes Hogan Lovells International LLP, Hogan Lovells US LLP and their affiliated businesses. The word "partner" is used to describe a partner or member of Hogan Lovells International LLP, Hogan Lovells US LLP or any of their affiliated entities or any employee or consultant with equivalent standing. Certain individuals, who are designated as partners, but who are not members of Hogan Lovells International LLP, do not hold qualifications equivalent to members. For more information about Hogan Lovells, the partners and their qualifications, see Where case studies are included, results achieved do not guarantee similar outcomes for other clients. Attorney Advertising. © Hogan Lovells All rights reserved. *Associated offices Hogan Lovells has offices in: Alicante Amsterdam Baltimore Beijing Brussels Budapest* Caracas Colorado Springs Denver Dubai Dusseldorf Frankfurt Hamburg Hanoi Ho Chi Minh City Hong Kong Houston Jakarta* Jeddah* Johannesburg London Los Angeles Luxembourg Madrid Mexico City Miami Milan Monterrey Moscow Munich New York Northern Virginia Paris Philadelphia Rio de Janeiro Riyadh* Rome San Francisco São Paulo Shanghai Silicon Valley Singapore Tokyo Ulaanbaatar Warsaw Washington DC Zagreb*