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County OKs $17M to Preserve Gates

Critics remain, but affordable housing proponents say move means much in the midst of affordable housing crisis.

Friends outnumbered foes Saturday as County Board members firmed up their support for the Gates of Arlington – a drastic change from the last time the board voted on the apartment building.

A unanimous vote on May 18 threw county support behind an attempt to purchase the 465-unit apartment complex near Ballston Common Mall, by AHC Inc., a county non-profit centered on preserving affordable housing. Board members reaffirmed that support at their June 22 meeting, voting unanimously to approve a loan to AHC of up to $17 million.

But the board’s willingness holds significance beyond the scope of the Gates, say affordable housing advocates.

This weekend’s loan saves almost ten percent of the affordable homes lost in 2001, and serves as a signal of county support, they say, to preserve a shrinking number of Arlington homes that are within reach of Arlington’s middle class and working poor, as well as recent immigrants.

"I’m hoping the county’s changed the process, being more pro-active," said Charles Rinker. "Otherwise, we see affordable housing units picked off one at a time," with tenants evicted or rents raised beyond their reach as buildings are purchased by for-profit developers, he said.

Support for board votes on the Gates is a change from May 18. Then, board members were only joined in the Board Room by critics of the move, who said it subverted the public process, and questioned possible county use of eminent domain to speed along the sale to AHC.

But this week, proponents of the board’s moves on behalf of the Gates of Arlington outnumbered critics almost two-to-one. The pro-Gates speakers, including residents of the apartments and the neighborhood around them, praised the board’s May action, and the loan approved this weekend.

That meant that residents of the affordable apartments, many members of the county’s minority population, wouldn’t be forced out of their homes, said Mario Cristaldo, coordinator for BUGATA, the Buckingham and Gates of Arlington Tenants’ Association.

<b>CRITICS OF COUNTY<b> moves to preserve the Gates said last month that Arlington was acting like a bully in a schoolyard in the matter, threatening to condemn the building under laws of eminent domain if Hall Financial Group, the current owners, didn’t sell to AHC.

That was not an accurate view of the process, County Manager Ron Carlee said this weekend. "There’s been the suggestion of an adversarial relationship. Nothing could be further from the truth," he said. "We got to this point with the support of the current owner."

But Wayne Kubicki, a member of the county’s Fiscal Affairs Advisory Commission and a former member of the Affordable Housing Task Force, said that questions of eminent domain were beside the point now.

"This transaction has large, undeterminable risks for the county," he told the board. "Risks that the county has never taken before in an affordable housing project, and risks that… local government should not be taking."

Under the terms of the loan agreement the board approved, Arlington would apply for to Fannie Mae for up $17 million in loans, money that would go into the county’s Affordable Housing Investment Fund.

The loan would not add to county debt burdens, as it would be backed by only limited legal obligations on Arlington – it would not be secured by the county’s full faith and credit, which can effect county bond ratings.

The county would then pass that money on to AHC, at a slightly higher interest rate, in the form of a county affordable housing loan. In addition, the county would provide $1.9 million of AHIF funds as a down payment on the Gates.

Kubicki’s concerns with the plans center on a three-year window that follows AHC’s purchase of the building. Normally, the group refinances buildings as it renovates them.

But mortgage requirements bar refinancing for renovation for the next three years, preventing AHC from securing some financing – a risk the county shouldn’t take, Kubicki said.

<b>TRUE ENOUGH,</b> the deal for the Gates is unusual, County Board Chair said Chris Zimmerman, County Board Chair. But soon it will be like most other affordable housing deals the county makes.

"But we’re at this point because of the affordable housing crisis facing the county," he said. "To have stood back and waited would be to wait for nothing," no affordable units left after another purchaser stepped in.

"I don’t find that acceptable," Zimmerman said. "Then we have to look at other ways of doing business."

That’s what’s needed right now, said Rinker. Developers can take their time considering purchasing a few buildings that hold the lion’s share of Arlington affordable housing, he said.

"Whenever someone’s ready to sell, they’ve got a ready market, with a number of folks wanting to purchase," he said. "The community is the last to know about these things."

That means that the county has to act fast, in the current real estate market, if affordable housing goes on the market.

The Gates deal should be an example of how to conduct business in the future, Rinker said.

"One of the things we did at the Gates, and we’ve got to do elsewhere, is say, if we want to keep diversity in the county, we have to be proactive, get somebody in to make an offer."

<b>AFFORDABLE HOUSING</B> is at a crisis point, Rinker said. County numbers back him up.

An Arlington survey of affordable housing last year found that 4,000 units of affordable housing moved out of reach of the middle class and working poor in Arlington – that means anyone making $54,900 or less for a family of four (60 percent or less than the median family income of $91,500 a year). New numbers will be available this summer, and another report on the county’s affordable housing stock is due this fall.

Catherine Bucknam, director of community relations for AHC, said that threats to Arlington’s affordable housing continues, even with county efforts to revitalize the Main Street of South Arlington.

"One of the areas where there still remains quite a bit of affordable housing is down Columbia Pike," she said. County staff plan to emphasize affordable housing, and the Pike’s ethnic diversity, as they consider how to attract new businesses and residents to the surrounding areas.

"But its hard, as communities are redeveloped, for affordable housing to remain," Bucknam said. "Owners want more money, or want a fair price as they choose to sell" in a suddenly reinvigorated real estate market.

That’s why the Gates vote was important, she said: it will serve as a template for AHC and Arlington as more housing is threatened.

"That’s our challenge, to get funding put together for these purchases," Bucknam said. "It just takes us a little longer than a developer who has deep pockets — because we don’t."