What is Deep Affordability?

Units affordable to households earning 30% of the area median income (AMI), which in 2023 was about $46,000 for a family of four. Often, families at this income level still cannot afford to live in “affordable housing” properties because affordability is typically defined as 60% of the area median income (AMI). In 2021, more than 24,000 residents – including children – lived in households earning less than 30% AMI. Deep Affordability is needed to create housing stability for these Arlingtonians.

Arlington Community Foundation calls on the County Board to adopt a county-wide policy goal to achieve at least 10% of units affordable at 30% AMI (“deep affordability”) in ALL county-funded Committed Affordable (CAF) projects moving forward.

ACF has studied and discussed this issue in past demonstration projects, technical reports, and advocacy before the County Board. Our analysis demonstrates that deep affordability is achievable with a modest level of additional Affordable Housing Investment Fund (AHIF) investment. Read our paper to learn more about the strategy to achieve deep affordability in Arlington.

Arlington Community Foundation deployed a $3M donation from Amazon to test buying down bricks and mortar units from 60% to 30% affordability. The funds were passed on via contracts to APAH, AHC, and Wesley Housing to buy down a total of 20 units for this demonstration pilot.

Arlington County secured 26 new units affordable to 30% AMI households with affordability stretched from 60-75 years.

Key insights:

Through these demonstration projects, we’ve learned that it costs an additional $170,000 per unit to buy affordability down from 60% AMI to 30% AMI.

There are two moments in the life of a project that lend themselves easily to 30% AMI investment. The first is during the initial County Board site plan approval; the second is during refinancing, typically 15 years after construction.

Recommendations:

The Arlington County Board should strive to dedicate at least 10% of all units in committed affordable developments for 30% AMI households.

Additional sources of funding to bridge the gap between 60% and 30% committed units should include:

– New local funding options, including increased AHIF on-going contributions and dedication of a proportion of AHIF for 30% AM, units as identified in our 2020 Arlington housing ordinance research.

– Commonwealth of Virginia should create earmarked funding dedicated to 30% AMI units using the Housing Trust Fund.

Arlington Community Foundation deployed $.55M in private funding to provide a guaranteed 2-year rent subsidy to 36 households at APAH and AHC who have incomes below 30% AMI, yet are living in 60% units. Participants’ monthly rents are capped at 30% of their income.

Arlington County supported 1,496 households with Housing Grants in FY22, and is projected to support 1,551 households in FY 24. This is a 25% increase in grants since 2020. The average annual Housing Grant in FY 24 is $9,300.

Key insights:

There are administrative burdens to landlords who are participating in multiple rent subsidy programs that need to be addressed.

Care must be taken to assure that those assisted do not lose eligibility for other forms of public assistance.

Recommendations:

Re-examine Arlington’s Housing Grant program rules and efficacy. This is underway as part of the County’s FY23 budget development. A Housing Grant study is expected to be delivered to the County Board no later than December 2023. We look forward to the analysis of possible expanded eligibility.

Arlington Community Foundation successfully advocated for a $.5M increase in FY21 emergency assistance funding with changed parameters to allow longer recovery ramps for stressed households. This increase helped the County respond more nimbly to the challenges of the pandemic.

Between March 2020 and August 2021 during the pandemic, Arlington County provided emergency assistance to roughly 5000 households using more than $8M in funding from various governmental programs. Long-time program limits and working requirements for rent and utility bill assistance were lifted. In FY22, Arlington County continued a much-expanded emergency assistance program, serving more than 4,500 households. In FY23, the working requirements and program caps reverted to pre-pandemic levels. In FY24, the County has appropriated $3.6 M ($3M one-time) to support those in need of emergency assistance.

Key insights:

Pre-pandemic emergency assistance caps are too limited to allow stressed households to stabilize their situations.

Recommendations:

Build on enhanced flexibility during the pandemic to recalibrate emergency assistance program parameters moving forward.

Jair Lynch (JL), with support from Amazon and Arlington County, purchased Barcroft Apartments in December 2021. The three partners made a commitment to permanent affordability for 1,334 units at 60% AMI for 99 years and promised that no legacy tenants (those in residence at time of sale) would be involuntarily displaced. This 60% AMI commitment is a considerable accomplishment for the County and its partners, and is a critical and necessary first step for preserving Barcroft’s affordability.

Arlington Community Foundation organized a Call to Action in September 2022, advocating, along with 19 other organizations, that the partners commit to providing 255 30% CAFs for at least 30 years as part of the long-term Barcroft redevelopment. The Foundation has continued to model illustrative pathways and publish papers (see buttons below) that support this goal.

Key Insight: Our analysis of development scenarios provided by Jair Lynch in the Barcroft Master Financing and Development Plan shows that achieving 255 units at 30% AMI rent levels is possible using the tools and resources available.

Recommendations:

As the MFDP is finalized in spring/summer 2023 we urge that:

• Jair Lynch, Amazon and the County commit to achieving 255 30% AMI units as one component of the final MFDP.
• The County Board amend the Columbia Pike Form Based Codes to 1) shift some percentage of conserved CAFS to ones newly constructed and 2) adjust height limits to allow more density in targeted areas such as the West Development Area and along Four Mile Run.
• The three partners embrace the use of income averaging to strategically achieve a number of low-income CAFS.
• At least one modestly-sized 9% LIHTC or hybrid 4%-9% project be included – and additional 9% or hybrid LIHTC deals should be pursued, if feasible, over Barcroft’s buildout.
• The County Board increase height and density strategically on portions of the site and calibrate these increases to assure the creation of a great place that embraces Arlington’s long-standing transportation, environmental, recreational and housing goals.
• The partners work together, throughout the implementation of Barcroft’s redevelopment and expansion, to identify and pursue additional sources of funding to efficiently and effectively achieve, within the 1,334 unit commitment, housing affordable to the full range of household incomes present when Barcroft was acquired.

Achieving Deeper CAF Affordability Countywide (February 2024)

Summary of Findings on Rent Subsidy and Construction Buy Down Pilots for Affordability at 30% AMI (June 2023)

Final Report on 2020-23 Pilot Test of Private Rent Subsidies to Achieve Affordability at 30% AMI (June 2023)

Final Report on Construction Buy Down Pilots to Achieve Affordability at 30% AMI (June 2023)

A Call to Action for Long-Term Affordable 30% AMI Units at Barcroft Apartments (September 2022)

Executive Summary: Approaches to Successfully Preserve Affordability for Extremely Low-Income Renters through the Barcroft Apartments Redevelopment (September 2022)

Approaches to Successfully Preserve Affordability for Extremely Low-Income Renters through the Barcroft Apartments Redevelopment (Published September 2022, updated November 2022)

Housing for 30% AMI Households in Arlington (March 2021)

Why Arlington’s Low-Income Residents are Being Displaced
and Why it Matters (Published 2019, updated August 2022)

Moving From Homelessness to Stability:

Committed Affordable Housing for people making 30% of Area Median Income is crucial (December 2021)

Shared Prosperity: Status Report on Affordable Housing Ordinance Review (Nov 2020)

Funding for Housing Dedicated to Households at 30% AMI (July 2021)

In 2019, building on the County’s Childcare in the Commercial Corridors report and the Child Care Initiative Action Plan, the ACF Shared Prosperity Roundtable endorsed a two-pronged approach to achieve more affordable child care by lowering the cost of space: 

1. County Board strategies such as density bonuses; permit modifications or density exclusions at the time of site plan approval in exchange for dedicated first floor child care space that could include a set-aside for some number of affordable slots; incentives to repurpose existing ground floor commercial or nonprofit space; zoning ordinance and county code changes; and technical support during the permitting process; and  

2. Business-owner actions that directly address the high cost of rent. Examples include owners assisting with specialized buildout, or offering lowered rent or in-kind space to providers in their buildings. 

Key Insights

While there was generalized agreement in both the 2009 and 2018 County reports that addressing the high cost of rent is an important piece of lowering the cost of care, systemic changes in these areas to address affordability have still not been made. Explicit County Board action that ties site plan/density adjustments to a commitment to affordable slots is needed.

Recommendations 

1. Create a list of County Board-approved projects and any land use tools or other incentives that were used to provide dedicated child care spaces since 2018. Include data on whether affordability was a consideration in the approved site plan conditions.  

2. Create a framework that supports tradeoffs in the development process to provide affordable slots for a set period of time and communicate this option to developers as a tool the County is willing to deploy to achieve greater affordability for child care slots. 

3. Develop a package for tenants in the commercial corridors that describes the ways that companies can support affordable child care in their leased building. 

4. Review all zoning adjustments made over the past decade to ensure that child care is broadly allowed as a ground floor use in every Arlington commercial area.

In 2020-2021, based on recommendations for philanthropically-funded child care subsidies in the Child Care Action Plan, ACF deployed $200,000 in funds from Nestle to test the use of private scholarships to children whose families earn below 30% AMI and who are not eligible for Virginia Child Care subsidies. These scholarships have supported child care for five children ages 2-5 for 2 years at an average cost of $1,622 per month per child.

Key insights:

In the course of implementing this small scholarship pilot, we learned that, even though the Virginia Child Care Subsidy Program pays close to the cost of a market slot, local providers largely do not participate in these programs due to heavy administrative burdens. As a result, public dollars available for Arlington had been left unused. Rather than continuing to raise funds for private scholarships, barriers to participation in the Virginia Child Care subsidy program – and by extension any governmental subsidy program – must be addressed so Arlington can first effectively deploy all available government funds.

Recommendations:

Incentivize providers to take Virginia Child Care subsidies through our recommended General Assembly and County actions.  

In preparation for the 2022 General Assembly session, ACF organized with a number of other foundations to ask NOVA’s General Assembly Delegation to address barriers to Northern Virginia provider participation in the Virginia Child Care Subsidy Program. Training, health, and retirement benefits for child care workers were also requested. 

During the 2022 session, the General Assembly:  

required the VA Department of Education to set child care subsidy rates based on the cost to provide quality child care. While the amount of the Virginia Child Care subsidy for Arlington has not been the primary driver of center subsidy acceptance, this adjustment resulted in Arlington having the largest subsidy rate in the state. 
eliminated any waiting list for child care subsidies, expanded funding and set a goal of providing subsidies to 281 Arlington children. At the end of the Commonwealth’s FY22, 311 Arlington children were taking advantage of the Virginia Child Care subsidy program, exceeding the goal. An additional 117 children were supported with VIEW/TANF, Early/Head Start or local dollars, bringing the total number of affordable slots to 428.

Beginning January 1st, 2023, the General Assembly: 

removed the co-payment requirement for families with incomes at or below 100% of the federal poverty guideline and, for families with children too young to be enrolled in kindergarten, added job search as a qualifying activity. Unfortunately, using 100% of the federal poverty guideline provides relief to only the most extremely low-income residents—those making about 20% of our area median income (AMI), or less than $30,000 annually for an Arlington family of four.
replaced the 7% copay requirement for families whose incomes exceed 100% of the federal poverty guideline with a flat fee per child (not to exceed 7% of family income in aggregate).

Other changes implemented by the Commonwealth during the pandemic expired in May 2022:  

co-payments for those over the federal poverty guidelines that increase as income increases, and 
increased number of absences allowed per child. 

Finally, the General Assembly enacted HB 884 which will permit the creation of benefits consortiums for small businesses.  This is a tool that could potentially be used by home day care and child care centers to offer affordable health care for providers.  

Key insights:

Even though current Virginia Child Care subsidies provide funding that is close to the market rate cost for child care in Arlington, local providers largely do not participate in the program.

Current salaries and benefits for providers are not competitive with public schools who themselves are facing a significant hiring challenge.

Recommendations:

1. Although incremental progress was made in the Virginia Child Care Subsidy Program in 2022, additional actions are needed to directly address the administrative burden and upfront costs that participating providers and families face:

1. Remove the required flat fee (not to exceed 7%-of-income) family co-pay for households between 100-150% of the federal poverty guidelines (the equivalent of Arlington’s 20-30% AMI), and allow for an increased number of pre-approved absences.  

2. Integrate key measures from the County’s Child Care Subsidy Performance Measurement Plan with the Annual Child Care Licensing measures into one accessible tool to capture results of these state efforts for policy makers and interested stakeholders. 

3. Provide assistance to child care providers to ease access to the Affordable Care Act and support Arlington child care providers in taking advantage of the state benefits consortium for small businesses. 

Status report on local efforts to increase affordability 

In the fall of 2021, ACF identified a number of activities that Arlington County could undertake that would advance our Shared Prosperity goal toward deeply affordable child care, including providing the first month’s tuition as a grant to the providers taking the Virginia Child Care subsidies, underwriting co-pays with local dollars, and exploring use of the state’s Mixed Delivery program which in FY 2024 will be offering affordable slots down to infants and up to age 5. 

In the past three years, an additional five child care programs enrolled in the Virginia Child Care Subsidy Program.  

In September 2022, the Department of Parks and Recreation transitioned 2 existing half-day co-operative pre-K programs to full-day professionally-staffed programs for 20 children at Gunston and Lubber Run Community Centers. Fees are calculated on a sliding scale. 

Arlington Thrive is using a 2022 Community Development Fund grant to hire a child care locator/navigator to help low income families find providers who will take the Virginia Child Care subsidy and to advocate for additional centers or family daycare homes to accept the subsidy. Their grant-funded program offers financial assistance to cover fees not covered by the subsidy and assistance with paperwork or other barriers to accepting the subsidy. As part of this project, Thrive has brokered an agreement with Little Beginnings Child Development Center, Funshine, and STEM Preschool to participate in the subsidy program. Thrive will pay the family co-pays.  

In 2022, the Department of Human Services arranged for Arlington Thrive  to administer payments to providers for slots that are either locally funded subsidies or through ACF’s Nestle child care scholarships (currently 8 slots). This local and philanthropic funding allows for the more provider-friendly and family-friendly provisions recommended by ACF: 

child care subsidies are paid to providers on the first of the month, not at month’s end, 
providers are paid market rates, 
anyone, regardless of immigration status, with minor-aged children who is working or studying (any degree, career, etc.) is eligible, and 
grandparents who care for their minor-aged grandchildren now qualify for these funds. 

Status report on local efforts to increase overall market–rate supply  

Since 2019 the County Board has taken the following actions:  

adopted Zoning Ordinance Amendments that increased the maximum number of slots in family daycare homes from 9 to 12 (allowing 61 existing homes and 21 new homes with 9 or fewer slots to be administratively approved since 2019) as well as eased the parking requirements for all child care provider locations (3/2019, 7/2019) 
established use standards for family day care homes (Arlington County Code Chapter 59) (7/19) 
tasked County staff to assist in matching developers and providers and smoothing the permitting process as needed (FY 2020)  
authorized $75,000 to support Planning Department work on child care-related land and zoning policies, regulations or other planning mechanisms. (FY23 funded)  

Unfortunately, there is no evidence that any of these changes have resulted in increased affordability.  

In November 2021, the County set aside $5M in ARPA funding to support a bricks and mortar investment. It is unclear whether this funding will be specifically geared toward creating affordable slots for low-income residents. More transparency on the plans for these funds is needed.

Key insights:

More work must still be done locally to incentivize providers to participate in the state and local subsidy programs. 

High zoning, permitting, and other administrative costs faced by child care providers make the business minimally profitable. 

Recommendations:

1. Use tax breaks or other financial tools to incentivize affordability as an equity goal in the FY23 CPHD review of child care-related land and zoning policies, regulations or other planning mechanisms. 

2. Integrate key measures from the Child Care Subsidy Performance Measurement Plan with the Annual Child Care Licensing measures into one accessible tool for policy makers and interested stakeholders. 

3. Eliminate local barriers to full utilization of other state child care funding that Arlington is eligible for through the Virginia Preschool Initiative and the Virginia Early Childhood Foundation’s Mixed Delivery program. 

Arlington Community Foundation joined 21 Safety Net Arlington nonprofits in Calls to Action directed jointly to the County and APS collaborate to offer school-aged childcare to essential low-wage workers who could not work from home during the 2020-21 virtual learning school years. Despite citing this as both an educational equity and an employment equity issue, these were unsuccessful.

Arlington Community Foundation recommended the establishment of a $500,000 school-aged childcare contingency during development of the FY21 budget. The County Board did not include that item in its adopted budget.

Key insights:

In Arlington’s zoning code and child care regulations, there are many barriers to nimble action on permits and facility use during any type of emergency.

The County and APS do not have existing relationships and structures to support efficient decision-making on cross-cutting issues during emergencies.

Recommendations:

An honest debrief of why Arlington County and APS were not able to address this need – at the same time that most others in the DMV did – is needed along with recommendations to create the conditions for more nimble, collaborative responses in the future.

Status Report on Efforts Made Toward More Affordable Child Care in Arlington (February 2023)

Shared Prosperity: Childcare Recommendations for Arlington County (Nov 2021)

A childcare request from Northern Virginia’s community foundations to NOVA Delegates (Jan 2022)

Safety Net Calls to Action on Childcare to APS and County (Oct and Dec 2020)

Arlington Community Foundation joined forces with several organizations including Arlington Employment Center and REEP (APS’s adult ESL program) over the last few years to plan demonstration pilots of plausible career pathways that included skills training with hiring commitments, decent pay and benefits. None of these came to fruition for a variety of reasons. These included:

– Virginia Hospital Center piloted a more accessible, culturally sensitive recruiting pipeline for specific jobs in the hospital. Despite major efforts on everyone’s part, the staffing and administrative burdens to sustain and grow this process were not realistic given other demands on hospital staff. Very few of the pilot participants made it through the process.

– JBG Smith and Clark Construction planned a large recruitment project that addressed hiring barriers and apprenticeships for the construction trades for Amazon’s National Landing project site in Crystal City. Unfortunately, as the labor market evolved during the pandemic, sufficient workers were found via prior subcontractor union commitments without deploying the planned program.

Arlington County launched a successful Child Development Associate training program. Between January 2020 through December 2021, 18 people have completed the CDA classes at the Arlington Employment Center. Seven of the 18 have earned their CDA credentials from the Council for Professional Recognition, with the remaining 11 expected to receive them by March 2022. All 18 have gained employment, a better job, or a raise.

In December 2021, Arlington County allocated $565,000 in ARPA funding for a new Back2Work initiative designed to serve 200-400 low-income Arlingtonians who lost work due to COVID.

Arlington Community Foundation met with the Northern Virginia Labor Federation to better understand their apprentice and pre-apprentice programs and the barriers (e.g. transportation, childcare, and the like) that participants encounter that may interfere with successful program completion. Arlington Community Foundation also had conversations with WMATA concerning bus drivers, and is in conversation with the Carpenters’ Union about ways to support their existing pilot for adults at the Arlington Career Center.

Key Insights

We’ve had difficulty gaining traction in the Shared Prosperity workforce goal area. Investments in soft-skills training, industry-specific skills training, and funding to address barriers like transportation costs and childcare has not been a focus of County funding or local philanthropy. Arlington still needs a great deal of capacity-building to get to and sustain success.

Living wages and health benefits are critical for people to be able to move out of poverty and dependency on public assistance. The 2021 cost of living in Arlington is four times the 2021 State minimum wage.

In early 2022, the 32BJ Union estimated that approximately 3,000+ Union members live in Arlington and work in  commercial office cleaning, commercial building security, or airline services at DCA (Reagan National Airport). 32BJ has continued to advocate through the pandemic for improved wages, paid time off, and access to health care across all of these areas of work. The Union also reported that in January 2022 most security employees are back at work and jobs have generally returned to DCA.  However, commercial cleaning jobs have not returned to prepandemic numbers and are not expected to grow significantly anytime soon. The Union has begun to explore training opportunities beyond their typical ESL and GED focused classes, including reaching out to the Arlington Employment Center, to potentially help these worker develop new skills that will provide access to good-paying jobs in other sectors.

Recommendations

Active, on-going collaboration with unions and businesses should be prioritized to create dependable pathways to good jobs that allow households to move out of poverty. Arlington has several strong opportunities to do this as the re-development plan for Barcroft Apartments is created and talks move forward about the Career Center parcel and school needs, as well as on-going construction to accommodate Amazon’s plans for development of their headquarters.

Project Labor Agreements that include living wages should be sought in major APS and County-funded construction projects and other procurements, and encouraged between major employers and unions.

Labor Peace Agreements (an LPA is an agreement entered into between an employer and a union pursuant to which the employer agrees not to oppose unionization, and the union agrees to not strike or otherwise stop work) should be explored as Arlington’s hotel industry builds back. Unfortunately, in the District of Columbia, room attendants and housekeeping cleaners have median wages 26% higher and desk clerks have median wages 41% higher than the Arlington-Alexandria-DC average. Many Arlington residents commute to hospitality jobs in D.C. and Maryland that pay significantly better than hospitality jobs in Arlington.  While LPAs cannot be compelled under Virginia law, the County Board should encourage such cooperation between hoteliers and unions because development of new hotels, and the accompanying increased number of new, low-wage hotel jobs, is likely to further exacerbate the County’s affordable housing crisis. 

Video: The Benefits Cliff in Arlington (Updated in 2023)

Benefits Cliff Background and Discussion Guide (2023)

2023 Arlington Living Wages Gap List

2023 Arlington Living Wages Infographic