Wednesday, December 17, 2008

Arlington County Funds New Church

Now, if the Arlington County Board were to give a $13 million low interest loan to a local church so it could rebuild it's facility, folks around here would be in quite an uproar.

Yet that's what the Board had done in a complicated deal where the money is dressed up as a loan for low income housing.

The First Baptist Church of Clarendon sits on an oddly shaped somewhat triangular block on the edge of Lyon Village (where the Curmudgeon resides). Faced with a declining congregation and an old, overly large and deteriorating facility, church elders came up with an ingenious idea to get taxpayers to subsidize a brand new church that the congregation could never have afforded on its own.

The church's proposal was to raze most of the existing building and replace it with a new church and an eight story apartment building, in which about two-thirds of the units would be designated for low and "moderate" income families.

The only problem was that the property, surrounded on two sides by single family homes, was--quite appropriately--not zoned for high rise apartments. So the church elders dressed their proposal up as an initiative to increase the stock of lower income housing and persuaded the County not only to rezone the parcel, but to kick in several million in low interest loans as well.

Local residents objected, for good reason. The proposed eight story apartment tower is too big to be that close to single family homes. If it had been sought by a private developer, the County Board would've turned it down in an instant. By the same token, if the property had previously been zoned for such high density development, then neighbors would have at least been on notice that a large building could eventually be in the offing. The local neighbors, however, had no reason to believe a church would be transformed into an eight story behemoth next to their homes.

Another indicator that the project is more about the church than low income housing is the cost/benefit analysis. For a $13.1 million loan, the County is going to get 70 housing units (out of 116 total in the building) designated for lower income residents. According to the church developers, the "affordable" units will be priced at roughly $1200-$1300 less than the market-rate apartments. [Our guess, however, is that they won't be the same as those units, so their market value is probably lower, meaning the rent subsidy is really smaller than that.]

The cost of the $13 million loan is about $186,000 per affordable unit. That money could be used NOW--not in a few years when the building is completed--to pay a $1200/month rent subsidy to 70 families for many, many years, especially if the $13 million were earning interest (even at today's low rates).

There's no demonstration that Arlington needs the new housing on the First Baptist site. Right now, there is a glut of condos and apartments in the Clarendon area, although the neighborhood, due to its popular location, is doing better than most. Housing is Clarendon isn't cheap, but it could be subsidized.

The County Board should never have entered this deal. It should have been evaluated as if the developer were a private one, offering some affordable housing in exchange for certain concessions. If it had been examined that way--even without a large County loan--it never would have been approved. Likewise, we'd feel differently if the church was taking the lead in a novel development on an independent parcel of land, suitable for high density development, that had nothing to do with rebuilding the church itself.

In an article about the development in today's Sun Gazette, the church's pastor said, "allow the religious community to be part of the solution" to affordable housing. We agree. But it shouldn't be the BENEFICIARY.

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