Grant

Maryland Department of Housing and Community Development ($500,000)

Program-Related Investment

Maryland Department of Housing and Community Development ($4,000,000)

Background

Though Maryland has a strong rental market, affordable housing remains elusive for many residents. From 2000 to 2005, median rents in Maryland increased by nearly 20 percent, while while the median incomes of renter households only increased by about 11 percent. Housing affordability is particularly a concern in eight counties that are anticipating substantial population and job growth as a result of military base expansions driven by the federal Base Realignment and Closure (BRAC) process. These counties expect a total influx of more than 25,000 households by 2011. This projection includes the approximately 4,000 BRAC-induced households that are projected to meet income limits set by the Low Income Housing Tax Credit program. Assuming no loss of existing affordable housing units, Maryland anticipates an affordable housing shortfall of 78,000 units with the next eight years.

Project Description

The grant will give the Maryland Department of Housing and Community Development (Maryland DHCD) the financial support it needs to hire professional consultants and staff to improve the quality and amount of information available about affordable rental housing in an eight-county region and to execute a well-designed communications strategy to educate property owners about the state’s preservation activities. Consultants will create a comprehensive database of all affordable subsidized and unassisted rental properties in the eight-county region, incorporating a methodology to prioritize preservation targets. The new database will allow Maryland DHCD to prioritize and target communities and properties for outreach. The outreach to property owners identified will include information about the technical assistance and capital resources Maryland DHCD has available to preserve affordable rental housing. Private owners will be encouraged to use the state’s resources to upgrade, refinance, or transfer affordable projects to preserve them as affordable rental housing. In addition, the grant will fund a compact between Maryland DHCD and the eight counties to develop a common set of loan documents, underwriting and rehabilitation standards, and agreed-on processing times for local, state, and private lenders, to streamline preservation transactions. The grant will cover the compact’s legal and professional fees. Finally, the grant funds will be used in partnership with the Maryland Energy Administration to provide technical and financial assistance for energy improvements to reduce operating cost and tenant utility bill burdens of existing affordable rental housing developments.

The program-related investment will help to capitalize the Maryland-BRAC Preservation Loan Fund, which is expected to generate short-term financing for preservation projects over a 10-year period. The lending facility will lend exclusively in the counties participating in the Fund and not supplant any state or federal funding already committed to the region. The loan fund will provide an expedited acquisition loan product for experienced developers to purchase suitable preservation properties, most likely properties with owners who were identified through the market analyses as unlikely to renew their exisiting subsidy contracts, or who may rescind their involvement in a subsidy program. The fund also will provide short-term financing for property owners who want to retain their subsidy contracts.

Contact

Jacqueline Lampell
Director of Communications and Marketing
Maryland Department of Housing and Community Development
100 Community Place
Crownsville, MD 21032
410-514-7704
lampell@mdhousing.org

Rosa Cruz
Deputy Director of Communications and Marketing
410-514-7712