Arlington Middle Class Homes

Arlington needs more affordable middle class family housing to help middle class families afford to stay in the community

 

That means housing under $2700/month, or a mortgage of $550k 

 

Beckwith Homes is initiating an effort to provide family friendly home ownership opportunities in Arlington that meet this criteria.

Beckwith Homes is looking for investors interested in funding a deal that would have three optional outcomes depending on what the county will approve.  The options will be pursued in the order listed to make every attempt to build affordable homes for middle class families, while ensuring to maximize returns for investors.

Build more density on existing residential properties currently only zoned for single family homes.  Over 80% of the property in the county is currently limited to SFH's. Beckwith Homes is coordinating with county board members and other officials to unlock some of these properties with zoning changes linked to the new "Housing Arlington" county initiative. This will be the first priority if approved by the county, as it would enable selling multiple smaller family friendly affordable homes per lot.

Housing Arlington - County Initiative

Recent Reporting on Demand for Zoning Changes

Conceptual Site Plan

Example Property Investment Proforma

Option 1: More Density on Residential Lots

Acquire a single family property in Arlington, renovate or build a new house suitable for a family, add an Accessory Dwelling (AD) rental unit capable of making $2000/month, and sell the property for under $1m.  The rental income helps the property meet the middle class affordability criteria of $2700/month toward housing expenses.

County AD Ordinance

Recent Reporting on AD's

Example property (Recently Sold)

Example Property Potential Report (including AD Analysis)

Example Property Investment Proforma

Example Property Comps Analysis

Option 2: Create Income Properties

If either Option 1 or 2 aren't approved by the county, or aren't possible for whatever reason, then Beckwith Homes would build a new SFH on the property to maximize return for the investor.  Even though this wouldn't provide middle class home ownership opportunities, it is the backup plan to ensure investors earn a return on their investment.

Conceptual Site Plan

Example Property Investment Proforma

Option 3: Build a Large New SFH

"Missing Middle" Problem

Arlington County recently approved an Affordable Housing Master Plan (AHMP) that does a great job identifying the "Missing Middle" problem the county has of a lack of affordable home ownership opportunities.  Since then, Amazon announced locating a second headquarters in South Arlington that is widely expected to raise housing prices even further, and create the need for even more affordable and home ownership opportunities.

 

In the AHMP, Objective 1.2 addresses the need for more "Missing Middle" housing.  The objective is to “Produce and preserve a sufficient supply of affordable ownership housing to meet future needs... Demand for ownership units for households between 80% and 120% AMI (Annual Median Income) is projected to be 2,700 units between 2010 and 2040, equivalent to 28.4% of new ownership stock. This is a segment of the market that will continue to be undersupplied without public policies to stimulate and incentivize production of lower cost ownership housing."

 

Arlington’s AMI is just over $108k.  Arlington also defines housing to be affordable when owners pay less than 30% of their income on housing costs. For a home to be affordable to an Arlington household under 120% AMI, it would need to sell with a mortgage below $550k (this takes into account real estate taxes and a mortgage rate of 4.5%).

Because of what Beckwith Homes does, they know finding decent housing suitable for a small family, and under $550k, is becoming almost impossible to achieve anymore in Arlington.  

 

Apartments and condos are more difficult for families to live in, due to many factors including lack of dedicated parking, long distances from parking to the units, lack of outdoor space, and sharing walls. Also, most condo’s and apartments are only 1 or 2 BR’s and aren’t really suitable for families with kids.  However, most of the remaining available properties in Arlington are residential lots with single family homes.  These single family homes would be more suitable for families, but have become too expensive for middle class families.  Even in south Arlington, most single family homes, even smaller outdated ones, are selling for well over 550k, and would require updating after that.

 

What Arlington lacks is similar to many urban communities, and has recently been coined the “missing middle.” What is missing are home ownership opportunities between smaller more affordable apartments and condos, and larger more expensive single family homes.  Among the types of more affordable housing that would fill this gap would be smaller single family homes on smaller lots, Attached duplex houses, townhouse units, smaller garden style apartment buildings. The current zoning ordinance mostly doesn’t allow for this kind of development that is needed by middle class families that don’t want to have to leave the county.  

Affordable Housing Master Plan Objectives

Addressing Arlington's "Missing Middle" Problem

It shall be the policy of Arlington County to:

1.2.1 Incentivize the production of moderately-priced ownership housing through land use and zoning policy.

  • The General Land Use Plan, Zoning Ordinance and other regulations affecting land use will be used to encourage the production of ownership housing affordable to households with incomes between 80 and 120% of AMI.

1.2.2 Encourage production and preservation of family-sized (e.g. 3+bedroom) moderately-priced ownership units.

  • To ensure a sufficient supply of housing for the County’s growing number of families and larger households, the County will encourage production and preservation of family-sized ownership units through land use tools. These efforts will include working proactively with condominium developers. It should also include exploring potential expansion (e.g. bump-outs) or reuse of underutilized properties (e.g. such as reconfiguring older commercial buildings) for affordable housing developments.

1.2.3 Explore flexibility in housing types and residential uses in single-family neighborhoods.

  • Due to Arlington’s limited supply of land and very high housing costs, it is increasingly difficult for moderate-income homeowners or prospective homeowners to purchase and maintain single-family homes in the County. Additionally, the changing composition of households and families is creating demand for different types of housing units to serve multi-generational households, older individuals living on their own, young working people, and other populations.

  • The County will explore zoning policies that allow and promote a wider diversity of housing types in single-family neighborhoods that help meet the need for changing definitions of families and households while maintaining neighborhood character and underlying zoning.