Loudoun Housing Costs: A Problem We Can’t Afford to Ignore

Loudoun Housing Costs: A Problem We Can’t Afford to Ignore

Average and affordable are words seldom applied to Loudoun County housing.  Other words – mostly superlatives — typically are used to describe the county. Richest. Biggest. Fastest. Most.

When it comes to housing costs, average doesn’t even mean average in Loudoun – and that looms on the horizon as a potential phantom menace that could slow or derail many of the other good things going on.

“We know we have a problem,” Board of Supervisors Chair-At-Large Phyllis J. Randall said. “Over the course of the next two years, this body will continue to discuss housing issues. We realize that we are facing a housing crisis but we also realize that we didn’t get here overnight.”

Numbers provided by Loudoun County illustrate the problem.

  • The median income for a family of four in Loudoun County is $134,000 – more than double the national average of about $58,000 and well above the average for the Washington, D.C. metropolitan area of $110,000. However, using the budgeting standard that a household can afford a home up to three times its annual income, that means the “average” person can afford to spend up to about $400,000. The average home price in Loudoun County is $512,000, meaning the average person cannot afford to purchase the average home within the county.
  • The county’s high average income is the result of many high-tech and government contract jobs, it also creates a huge gap between workers enjoying those large salaries and other professions that are vital to the community. According to the Virginia Employment Commission, about 55 percent of the workforce had incomes well below the average of professional, scientific and technical jobs. There are almost 19,000 local government employees (including the Loudoun County Public Schools and public safety workers) with an average income of about $51,000, about 16,000 food service and hotel/motel employees averaging about $30,000, 15,000 in construction making about $71,000, 11,500 in health care and social services making $55,000 and 10,000 in transportation and warehousing earning $46,000.
  • About 30 percent of households in Loudoun County are cost-burdened, defined as having housing costs that are more than 30 percent of income.
  • According to the Dulles Area Association of Realtors, Loudoun County’s inventory for residential real estate listings averages two months. An inventory of six months is considered “balanced” between buyer and seller and the national average inventory is nine months. This leads to a consistent “seller’s market” for real estate and drives up prices as buyers actually compete with other in the housing market.

“Affordable and workforce housing play critical roles in growing our local and metro area economy,” said Brenda Morton, government affairs manager for the Dulles Area Association of Realtors. “We recommend that the county adequately plan for growth and residential development.

Most residents in Loudoun don’t understand the meaning of affordable housing.  It is a very complex definition.  In its simplest terms, affordable housing is housing which is deemed affordable to those with a median household income as rated by the national government or a local government by a recognized housing affordability index.  A commonly accepted guideline for housing affordability is a housing cost that does not exceed 30% of a household’s gross income.  In Loudoun, however, the application of these simple calculations are skewed by so many making so much, leaving an unbalanced population where every-day local jobs are unsupported by its own community.

So, the struggling parents, student, single mother or father, blue collar worker, workers in every retail store, restaurant, police and sheriff’s deputies, fire and rescue staff, teachers, government staff – based upon 30% of their income – they cannot afford to live in the county.  Most cannot afford to live in the county on their income even at 50% or 75%.  Living paycheck to paycheck in Loudoun is common and housing is not “attainable” for the workforce needed to support the county.

According to Buddy Rizer, executive director of Loudoun County Economic Development, affordable “workforce” housing is vital to the continued growth and development of the county.

“We believe this is very much an economic development issue and not just a social issue,” Rizer said. “We have a very diverse economy here in Loudoun and we have done a good job with economic development. We need to be able to deliver a workforce to serve all kinds of companies that are part of that diverse economy, from service industry all the way up to high-tech jobs.

“The lack of attainable housing and a continuum of housing options makes attracting that workforce a little more challenging.”

Rizer said the problem is not yet blocking economic development efforts, but there already have been situations that show potential problems.

“The fact that we have a company here in the county that is paying a million dollars a year in car and vanpools to bring in workers because they can’t afford to live here – that is a real striking thing,” Rizer said. “Then you hear about the restaurant that had to delay opening because they couldn’t find an adequate workforce. All of those things lead you to view this is an economic development issue.

“It’s not critical at this point. We are still doing very well. As we have grown up as a community, there have been so many great things we have done in planning for the future. This is something else we need to consider and start planning for.”

Lars Henriksen is past president of DAAR and a board member for Envision Loudoun, which is tasked with developing the master plan for land development in Loudoun County. As such, he sees affordable housing from several perspectives.

He points to the disparity between average incomes and average home prices in Loudoun County.

“DAAR’s perspective that there is a real demand for affordable housing and workforce housing that has gone unmet,” Henriksen said. “ We feel that whatever has been built is not sufficient in quantity and type.”

He pointed out obvious problems with geography for many workers in Loudoun County.

“If you want to buy something for $330,000 in Ashburn, you could only buy a condo. You probably couldn’t find a nice townhouse and you certainly couldn’t find a single-family home. What happens is buyers that want to live in the area are pushed further west, to Winchester and Clarke County or even out to Charles Town, West Virginia or Frederick, Maryland.

“The problem with that is that they only have Route 9 and Route 15 for ways into [the county] where the jobs are. Those are two-lane roads. We have no plans to widen Route 9 and we’ll probably never widen Route 15 because it’s a historic road and we want to preserve it.”

Henriksen said action is needed sooner than later as Loudoun County is expected to see continued development and corresponding increases in population.

“Based on the numbers we are getting from the county, they are projecting the population to go from just under 400,000 to about 890,000 over the next 23 years,” he said. “That’s a lot of people. Our vision as an association is to build communities that have housing assistance for people for government workers – and that includes people like teachers and first-responders. We want them to be able to afford to live here in Loudoun County.”

“For example, if you work here for three years, you are vested into a program to get help with your mortgage. We have a lot of land tied up in schools, which is good. We need that. But part of that property could be used to develop and build affordable housing for teachers and local government employees.”

Henriksen said DAAR also supports proposals made by other groups to provide incentives to developers who build more affordable housing.

“If you agree to build a certain number of affordable dwelling, then you could get an exception on the density requirement and could build more density on that development,” he said. “It’s a trade-off.”

Henriksen referred to the policy areas of Loudoun County under current land development planning, which has the urban zone along and east of Route 28, the suburban zone just west of Route 28, the urban west and what is called the transition zone. Henriksen said that transition area, an L-shaped strip between the suburban and western zone, holds the most promise for the place to catch up with workforce housing.

“Around 7 percent of the county is transition policy area,” he said. “That is along Evergreen Mill Road and we have about 50 to 70 percent of that is open space.”

Several stakeholders point to developments going up along the Metro Silver Line extension as a way to increase workforce housing that also offers transportation options to the workforce.

“It’s not just the price – it includes housing types and the kinds of settings they are in,” Rizer said. “For example, when the Metro gets there, those kinds of settings attract the type of worker that doesn’t want to have to get in their car all the time.”

Rizer warns against policies that look to establish workforce housing only in specific areas.

“Throughout the county, there are opportunities to have a variety of products,” Rizer said. “The solution is really about providing a continuum of housing options to meet the needs of a diverse workforce.”

“We need to offer developers incentives to build smaller units and a wide variety of products, especially around the Metro stops. These areas are desirable and bankable. We are not looking to be segregated. Our vision is more of just being able to develop a variety of options throughout the county, not just certain options here and different options elsewhere.”

The need for incentives is based largely on developer’s profitability. If not careful, the county can regulate itself out of needed development to a degree where pockets of land will sit undeveloped.

Another concern is public perception.  Many Loudoun taxpayers are weary of affordable or workforce housing. The thought is often not on, how do we allow the deputy, teacher or restaurant worker to live in the county they serve, but more toward not wanting low-income housing, projects, etc., to be the answer.  Loudoun residents relish the schools, shopping, relatively low crime, and upper-income level of diversity, all which they fear would be in jeopardy if low-income housing, masqueraded as affordable or workforce housing, is the answer. This public perception problem causes a collateral concern as most in charge of the solutions, from creating policy to incentives, are elected.

Rizer commended Randall and the board of supervisors for recognizing the issue and starting the discussion process.

“It’s good that we are having the conversation,” Rizer said. “The board already has taken some good steps.

“We need to look at all our policies and make sure they are in line with delivering this product. One solution would be to have a housing trust fund to make smaller dwellings more bankable. They are also talking about some density bonuses that could be used as incentives for variable workforce developments. This is really the beginning of the strategy.”

Randall said the county government is motivated to address the problem and work to implement many of the suggestions made during the affordable housing summit.

“This is the beginning of the process, not the end,” said Randall. “But we want to assure everyone that we are very all-hands-on-deck about the housing situation.”

Joseph Dill