N-FBC Affordable Housing Amendments:

1. Area Median Income Limits for Ownership Units

2. Cash Contribution for Commercial Uses

NAIOP

February 26, 2020

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Affordable Housing Master Plan

• Goal 1.2.1 - Incentivize the

production of moderately-

priced ownership housing

through land use and zoning

policy

• AHMP recommends

encouraging the production

of 80% to 120% Area Median

Income (AMI) units

Background - Guidance for Housing Ownership

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Area Median Income (AMI) – Current Levels (2019)

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Household Size

60% of Median

80% of Median

100% of Median

120% of Median

1-Person $51,000 $68,000 $85,000 $102,000

2-Person $58,260 $77,680 $97,100 $116,520

3-Person $65,520 $87,360 $109,200 $121,300

4-Person $72,780 $97,040 $121,300 $145,560

5-Person $78,660 104,880 $131,100 $157,320

Source: Median Income as adjusted by US Department of

Housing and Urban Development

Existing N-FBC Requirements

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Consistent AMI limits for Rental andOwnership Housing

• Affordable units up to 60% AMI

• 30-Year term

• Alternative AMI options dependent

on site location in East or West

Columbia Pike

Challenges of Limiting Affordable Units to 60% AMI

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For Ownership Units:

• Limited pool of eligible purchasers

• Tight mortgage credit requirements

• Ability to keep pace with yearly increases in condo fees, utilities, taxes, etc.

• Ability to pay for unforeseen maintenance/repair expenses

Challenges of Limiting Affordable Units to 60% AMI

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Example: 3-person Household with income of $65,520 (60% AMI):

• $65,520/12 months = $5,460 monthly gross income

• Assumed Debt:

• Car loans and credit cards: $500/month

• Student loans: $300/month

• Mortgage for 2br condo in Arlington: $1,800/month(includes condo fees, taxes, etc.)

• Total Debt: $2,600/month

• Resulting Debt-to-Income Ratio (DTI): $2,600/$5,460 = 48%

• This household would not qualify for a traditional mortgage

N-FBC (Ownership) Development Projects

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• Carver Homes

(Sold 2017)

• 6 ADUs up to 60% AMI

• No N-FBC condominium developments anticipated though 2020

Pike Development History (2003-2019)

• 19 total developments approved

• Over 3,400 total residential units

• Of the 3,400 total residential units, only 150 were ownership (or 4%)

Neighborhoods FBC Project Summary

• 4 total developments approved

• Total of 885 residential units

• 468 market rate units

• 417 affordable units

• Of the 417 total affordable units,

only 6 were ownership (or 1%)

Past FBC AWG Feedback

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Staff met with the FBC AWG in June 2017 to discuss an earlier

version of this amendment:

• Original recommendation for ownership units included:

• At least half of the units to be up to 100% AMI; and

• The remainder to be up to 120% AMI

• FBC AWG expressed concerns the proposal limited access to

affordable units earning up to 80% AMI

• Staff, at the time, was asked to consider lowering the range to

capture residents from the lower AMI levels

(New) Proposed Affordability Tiers for Ownership Units

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Total Number of

Affordable Units Required

Units Up to

80% AMI

Units Up to

100% AMI

Units Up to

120% AMI

1 1 0 0

2 1 1 0

3 1 1 1

4 2 2 0

5 2 2 1

6 2 2 2

• No less than 1/3 of required units shall be affordable to households earning up to 80% AMI, no less than 1/3 shall be affordable up to 100% AMI, and the

remainder shall be affordable up to 120% AMI.

• If there is only one required unit, it shall be affordable up to 80% AMI.

• If there are two required units, one shall be affordable up to 80% AMI and

one shall be affordable up to 100% AMI.

Hypothetical Examples Utilizing This Tiered Approach

(New) Proposed Affordability Tiers for Ownership Units

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Hypothetical example assuming recent N-FBC project in Arlington View was

proposed as market rate condos:

• Existing Units: 33

• Proposed Units: 77

• “Net Gain” of Density: 44 units

• Minimum Affordable Requirement:

• 2.3 factor applied to 44 unit ‘net gain’

• Minimum of 11 affordable units

Existing N-FBC Requirements:

• All 11 units would be at 60% AMI levels

Proposed N-FBC Requirements:

• 4 units would be at 80% AMI

• 4 units would be at 100% AMI

• 3 units would be at 120% AMI

Recommendations for Ownership Units

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• Establish equally tiered affordability levels up to 80% AMI, 100% AMI, and 120% AMI

• Extend affordability term from 30 years to "life and use of the existing improvement as a residential dwelling unit"

Affordable OWNERSHIP Units Existing N-FBC Proposed N-FBC

AMI Level 60% AMITier at up to 80% AMI,

100% AMI & up to 120% AMI

Affordability Term 30 Years

For the life and use of the existing improvement

as a residential dwelling unit

Affordable RENTAL Units Existing N-FBC Proposed N-FBC

AMI Level 60% AMI 60% AMI (no change)

Affordability Term 30 Years 30 Years (no change)

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Cash Contribution for

Commercial Uses

• The N-FBC affordable housing requirement currently does not address commercial development scenarios.

• Recent proposal for a site in Foxcroft Heights contemplated a

hotel development (among others)

• There are seven sites within the N-FBC Revitalization District that could redevelop as commercial uses.

• Designated as “Urban Mixed Use” or “Urban Storefront”

frontages in the Building Envelope Standards

Background - Commercial Cash Contribution

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• When commercial uses are proposed, the same commercial cash calculation as required in Site Plan projects - Zoning Ordinance section 15.5.8.C.4 (“base ordinance calculation”) should apply.

• 2019 Cash Contribution Rates* are:

• $2.01/SF of Gross Floor Area (GFA) for the first 1.0 Floor Area Ratio (FAR);

• $5.36/SF of GFA above 1.0 FAR.

• For mixed-use residential projects, the existing affordable (on-site) unit contribution would apply to the residential portions of the development. The cash contribution will apply only to the commercial portion of the development.

• A cash contribution will not be allowed for residential uses.

* Indexed to the Consumer Price Index for Housing in the Washington-Arlington-Alexandria MSA.

Recommendation – Commercial Cash Contribution

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Recommendation – Commercial Cash Contribution

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Hypothetical Foxcroft Heights site on Orme St and Columbia Pike

Hypothetical example using 53,300 sq. ft.

site in Foxcroft Heights, designated with a

“Urban Mixed Use” BES frontage, and

currently occupied by 12 residential units

Scenario 1: Mixed-Use Project

• 30,000 sq. ft. of retail & 140 residential units

• 39 on-site affordable units required

• $60,300 cash contribution required

Scenario 2: Hotel Project

• 161,000 sq. ft. of commercial space

• No on-site affordable units

• $684,400 cash contribution

Existing aerial image

Neighborhoods Area Plan Rendering

Next Steps

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• February 2020: Staff work on text amendment language

• March 2020: Zoning Committee of the Planning

Commission (ZOCO) and Housing Commission (info item)

• April 2020: Request to Advertise

• May 2020: Planning Commission, Housing Commission

(action item), and County Board meeting

Backup Slides

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Western Subarea Regulating Plan

Mixed-Use Frontages - NFBC

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Central Subarea Regulating Plan

Mixed-Use Frontages - NFBC

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Eastern Subarea Regulating Plan

Mixed-Use Frontages - NFBC