Robert McCartney (01:26):

For years now, when I've talked to business CEOs and other employers, they say that it's hard to find and keep workers, partly because housing is so expensive here. The high prices for rent, especially, or mortgages are a major barrier to creating jobs and economic development. Housing is also at the core of efforts to fight climate change. We need to build more housing close to jobs and transit so people don't have to drive long distances to work and add to greenhouse gas emissions.

Robert McCartney (01:59):

The good news is that we've seen some progress in recent years. In 2019, COG formally approved a goal of producing 75,000 extra housing units on top of what was already projected in the current decade. It also approved targets for affordability and proximity to transit. Some local governments, including Alexandria, the District, Prince George's, and Montgomery, have taken some actions to meet those goals.

Robert McCartney (02:28):

In addition, some local companies and nonprofits have stepped up. Amazon, for instance, is investing hundreds of millions of dollars in local affordable housing projects. The less good news is that for all of the recent efforts, the scale of the problem is so large that the region is still falling short of what's needed, and by quite a bit. Wesley Housing's experience is a good example. I asked Murphy about it.

Robert McCartney (02:59):

You said you have 1,600 units and you're going to add another 400 this year. That's a 25% increase. You've been around 50 years. What accounts for the acceleration in the production of your units?

Shelley Murphy (03:16):

It's interesting because we've seen a growth, I think, over the past couple of years, not just for Wesley, but for a number of the nonprofit organizations. A piece of it is political will. The local governments have done a great job of leaning in on the issue of affordable housing. Now, are we there yet? No. Are we anywhere close to getting to the COG goals? No, but there has been more resources available that have allowed us to acquire and construct more housing.

Robert McCartney (03:47):

Rents at Wesley's units range as low as $600 or $800 a month, but most go for $1,200 or $1,400 for a one or two-bedroom property. Its tenants have an average household income of less than $37,000 a year, and 86% are non-white. Murphy and others said a key thing to understand about housing is that there is no single solution.

Robert McCartney (04:13):

From your point of view, what are the principle ways that the region can address the housing affordability challenge, and to what extent is it a lack of financing, and to what extent is it other factors, such as zoning or grassroots political resistance?

Shelley Murphy (04:33):

It's all of that. Funding is critical. If you look at the overall regional housing shortage that has been outlined in the COG report and others, it will take billions and billions of dollars to meet that need. There's just no other way around it. Zoning is also an issue. If you look in some of the jurisdictions, the vast majority of the property is zoned single family, so how do you find ways to increase zoning flexibility that could potentially provide additional density in those places where you can have density?

Robert McCartney (05:19):

Density is a crucial but also loaded word in any discussion about housing. One of the most effective ways to add lower-cost housing near jobs and transit is to build multifamily buildings, such as apartments or row houses, in neighborhoods currently dominated by single-family homes with yards, but proposals to do that often face local opposition.

Shelley Murphy (05:42):

There's always been a racial component and a class component to the arguments that we've had about housing. There is concern about having additional low-income people move into a neighborhood. That's always been that way, and I don't think we're over that yet.

Robert McCartney (05:57):

Justin Wilson, who is mayor of the City of Alexandria, made a similar point.

Justin Wilson (06:03):

Some of the tools that move the needle the most, that help address the problem the most, are certainly the most controversial. Density is one of the most impactful tools we can use to create additional affordable housing or moderate the price increase of existing housing, is through the addition of density. There is reflexive opposition to density, even from folks who would suggest that they are fully in support of "affordable housing." They will say, "Gosh. Well, does it have to be that big? Does it have to be that tall? Can't you build more modest affordable housing?"

Robert McCartney (06:41):

Despite such resistance, Alexandria is one of the leaders in the region in committing to increase its production of lower-cost housing, as urged by COG.

Justin Wilson (06:51):

After COG adopted those targets at the COG board level, we were one of the first jurisdictions to turn around and adopt and endorse our target at our council level. From 2014 to 2019, we were creating about 840 units of housing per year. Since 2019, we are creating about 1,105 units of housing per year, and that's both market and affordable, and so we are on track to make that 2030 target. Most of it is going to be multifamily or townhouses in certain areas and stacked units and things like that.

Justin Wilson (07:33):

We've also, in recent years, approved some changes to our zoning code to allow some kind of infill, kind of soft-density housing creation in some of our single-family neighborhoods. We created an accessory dwelling unit ordinance a couple years ago that allows accessory dwellings on single-family properties. I think we're trying to throw everything at it and provide a variety of different options.

Robert McCartney (08:02):

Alexandria's new housing is being financed by a variety of sources, including federal tax credits, city funds, and both nonprofits and private companies. Speaking of which, now let's talk to a corporation that is committing large sums in the region to support housing affordability. That would be Amazon. Both Mayor Wilson and Wesley's Murphy praised Amazon for its contributions.

Robert McCartney (08:29):

They include, among other things, a $2 billion Housing Equity Fund created a little more than a year ago to create or preserve 20,000 affordable housing units in three jurisdictions nationwide. They are Northern Virginia and the Seattle area, where the company has its two corporate headquarters, and Nashville, where it also has a large presence. Amazon also set up a $125 million grant fund to support minority developers.

Robert McCartney (09:00):

It's funding a workforce housing project at the Crystal House apartment building in Arlington, near its HQ2 facility, with 825 units, and it gave COG $500,000 to create a Housing Affordability Planning Program, or HAPP, which helps local jurisdictions conduct planning and design studies for housing and transit projects. Applications are open through March for that grant program, by the way. I spoke to Catherine Buell, head of community development at Amazon, who oversees the big Housing Equity Fund.

Robert McCartney (09:37):

What's the motive for doing this? I mean, what led Amazon to decide to devote $2 billion to housing equity?

Catherine Buell (09:46):

That's a great question. Amazon has actually been investing in our hometown communities for quite some time. We had a housing match a couple of years ago where we tested the water to see how we could invest in affordable housing, mainly because housing affordability became a very major concern for the communities that we call home, and we heard it loud and clear, and we wanted to do what we could do to help.

Robert McCartney (10:09):

Like many big companies, Amazon has a lot of critics. What do you say to critics who contend that this Housing Equity Fund is just a public relations stunt to buy favorable attention for the company?

Catherine Buell (10:23):

Well, I encourage those critics to look at our record and seriously look at what we're doing. We decided that we would go directly to affordable housing investments, in large part because we really wanted to make sure that we were working with project sponsors who knew our community, that we could work at the speed of market, and we could work at scale. The bulk of our investments, if not all of our investments that have been publicly announced to date, include 99-year commitments to affordability.

Catherine Buell (10:50):

What that means for a project like the Crystal House, which is located a block away from HQ2, that property will be affordable when my children grow up, when their children grow up. If you're in an Amazon-funded affordable housing project, those rents will only grow with wage growth, which will really help stabilize the budgets for moderate and low-income households.

Robert McCartney (11:13):

You've also announced a $125 million commitment for lower-cost housing around Metro stations.

Catherine Buell (11:20):

Correct. First, it's $100 million dedicated to joint development partners who are already in WMATA's pipeline that are building affordable housing. I'm so excited about our plans to be able to announce our transit stations, because we're going to be able to get quite a few transit stations up and running and get housing built at them, but we also, with WMATA, got a $25 million commitment to any minority-led organizations or minority developers that WMATA is working with, be able to fund their projects.

Robert McCartney (11:54):

What about the role of altruism versus self-interest for Amazon? I mean, why is it in Amazon's economic self-interest to support housing affordability in the Washington region?

Catherine Buell (12:08):

Just for employers generally, affordable housing and issues of housing affordability are starting to become more and more of a pressing issue for major corporations.

Robert McCartney (12:19):

It's a question, to some extent, for Amazon and other companies of encouraging housing affordability in order to make sure they have the kind of workforce they want.

Catherine Buell (12:31):

Correct. First, and quite frankly, that is not an issue that is unique to HQ2. That is an issue across the nation. I've heard it from other employers, that they are equally concerned that they are not able to retain their staff, and it's couched maybe not in a housing affordability lens, but because they just can't simply afford to live here. It shows up in different ways, but issues of housing affordability do affect major employers and affect their communities, which is why we're starting to see more and more employers get interested in how they can step up.

Robert McCartney (13:08):

Before we close, let's drill down to understand better the numbers in all this. In 2019, COG estimated the region was set to produce approximately 240,000 new housing units by 2030, and that wasn't going to be enough. Here's Hilary Chapman, who is COG's Housing Program manager.

Hilary Chapman (13:29):

In this decade, we need to produce over 300,000 more units, which is 75,000 more than we would've normally expected based on current plans and developments in the pipeline already.

Robert McCartney (13:43):

COG also said three-quarters of the new units have to be close to transit and other amenities, and three-quarters have to be affordable to low and middle-income residents. Otherwise, we'll just get a lot of housing in places heavily dependent on automobiles and housing priced out of reach for the people who need it.

Hilary Chapman (14:02):

We want those units to be in places that are planned for growth, with access to high-capacity transit, quality schools, other community amenities to address our transportation system challenges. 75% of those need to be priced for those at lower and middle income, so $2,500 a month or less in terms of housing cost, to meet the needs of people who are both here already, as well as people we expect to be coming to the region.

Robert McCartney (14:35):

How is the region doing in terms of meeting its collective targets?

Hilary Chapman (14:40):

We are still behind. That's clear. We declared these targets officially at the end of 2019. There's been a pandemic in between that has had all sorts of negative impacts on our ability to produce new housing.

Robert McCartney (14:59):

COG calculated that the region needs to add about 32,000 units per year to meet its target by 2030, but the region is only producing between 22,000 and 24,000 units a year, so it continues to fall short of the target.

Hilary Chapman (15:16):

And unfortunately, those numbers compound over time, so every year that we're not hitting that target means that we'll need to produce even more in subsequent years.

Robert McCartney (15:27):

What kind of housing is getting built, and what kind of housing are we falling short on?

Hilary Chapman (15:35):

We need more apartments. We need more townhomes. We need more duplexes. We need more garden-style apartments, larger multifamily. We have in the region a significant amount of land that is zoned specifically for single-family detached housing, and if we can allow for a greater variety of housing types in our region, these are all things that will help us meet that need.

Robert McCartney (16:07):

Meeting the production targets isn't the only housing goal in the region. Chapman is overseeing a Regional Housing Equity Plan whose purpose is to promote meaningful actions to overcome historic patterns of segregation. It is looking at a variety of ways to lower housing barriers for people of color, people with disabilities, and other marginalized groups.

Hilary Chapman (16:29):

This is the first time the region has come together in, actually, 25 years to work collaboratively on addressing housing opportunity throughout the region. The goal of the plan is to really reverse segregation in housing patterns, historic and current, and prevent discrimination in housing. We're looking forward to being able to share our draft plan with residents of this region later this spring.

Robert McCartney (17:01):

Here at the end, I like to share some of my own observations. It's hard to overstate how important it is to increase the supply of affordably-priced housing in the region. The need is at the center of efforts to attract a quality workforce for the economy, improve transportation, fight climate change, and advance racial equity. It's a key planning priority for COG for the coming decade, part of its Metropolitan Washington Planning Framework for 2030. Local governments need to increase funding, adjust zoning laws, and take other steps to meet the 2030 housing targets that they themselves have endorsed through COG, but they can't do it alone.

Robert McCartney (17:43):

Private companies need to contribute, recognizing they have an economic self-interest in doing so, and the nonprofit sector has an important role to play, as many low-cost housing projects are sponsored by churches, philanthropies, and similar institutions. For all of this to happen, we need to see a shift in public opinion to embrace or at least tolerate increased density, that is, construction of more multifamily dwellings, and that includes doing so in neighborhoods that historically have been reserved for single-family homes.

Robert McCartney (18:21):

I hope you've enjoyed this podcast. We welcome your feedback. Please email comments to thinkregionally@mwcog.org. This podcast is produced by Megan Goodman and Janelle Partman. Until next month, this is your host, Robert McCartney, urging everyone to think regionally.