Action Plan

• the Need for Housing for extremely low-income people
• the Need for Improvements to Infrastructure
• the Need for Jobs
• the Need to Revitalize Maryland's Older Neighborhoods, and
• the Lack of Coordinated Responses Between Agencies to Address These Issues.

Citizen Participation

Conditions

Up through the early 1990s, population growth in Maryland had been expected to be above the national average for most of the next two decades. However, recent data show that Maryland's population growth is below the national average. Slower population growth will require less new construction and will encourage rehabilitation of existing housing stock as a viable, affordable, efficient alternative.

Housing Needs

Housing Market Conditions

Based on a 1992 study done by Legg Mason Realty Group for the Maryland Department of Housing and Community Development, the median price of a home in Maryland in 1992 was $123,495. The median price for a new home was $164,536, and for an existing home was $116,959.

As would be expected, home prices were higher in urban areas. The most expensive housing is in the Washington, D.C., Metropolitan Statistical Area (MSA), followed by the Baltimore MSA, the Wilmington, Delaware MSA (which includes parts of Maryland), and the Hagerstown MSA. The lowest house prices were in Maryland's rural counties.

About 82.5 percent of all owner-occupied units have three or more bedrooms. Approximately 2.2 percent of all owner-occupied units have no or one bedroom (the majority are efficiency and one bedroom condominium units), and the remaining 15.2 percent of owner-occupied units have two bedrooms (these are also primarily condominium units).

About 6.5 percent of all vacant units for sale have no or one bedroom, about 24.2 percent have two bedrooms, and the remaining 69.2 percent have three or more bedrooms. This illustrates the difficulties many owners of small units have in selling their properties. For example, despite efficiency or one bedroom units representing just over two percent of all owner-occupied units, they constitute about 6.5 percent of all units for sale, or about three times their presence in the housing stock.

Demand for renter-occupied housing remains high. Demand for affordable renter-occupied housing has increased over previous years. Market studies completed for recent projects receiving approval by DHCD's Division of Housing Finance (CDA) have demonstrated that there is a need for affordable housing for various populations (elderly, family households, etc.) throughout the State.

Rents for efficiencies, apartments, and other available units for rent vary widely across the State. General inflationary pressures have kept rents rising statewide, but the new Consumer Price Index (CPI) region combining Baltimore and Washington, DC metropolitan areas may have special impact on rent levels in most of the central part of the state. The CPI has long been used by landlords as the basis for raising rents. Merging the CPIs for Washington, DC and Baltimore areas has had the negative effect of raising the CPI in Baltimore metropolitan area, but the positive impact of lowering the CPI in the Washington, D.C. metropolitan area. The State's rental housing inventory is very different from the owner-occupied inventory. Just under thirty-two percent (31.9) of all units have no or one bedroom, 39 percent have two bedrooms, and 29 percent have three or more bedrooms. Vacancies in renter-occupied housing mirror the market inventory more than owner occupied units. However, the numbers indicate that there is a shortage of larger rental units.

For example, one-bedroom units constitute 31.9 percent of all occupied units and 32.6 percent of all vacancies. Two-bedroom units constitute 39 percent of the occupied units and 46.3 percent of the vacant units. Three-bedroom units constitute 29 percent of the occupied units but only 21 percent of the vacant units.

Housing Needs

Housing units were considered to be not affordable if the households living in them had to pay more than 30 percent of their incomes on housing expenses. Units were considered to be unacceptable for a household, if they lacked some plumbing or kitchen facilities or if they were over crowded (more than 1 person per room).

Over 246,000 extremely low-income and low-income households -- 60 percent of these households -- in Maryland are paying more than 30 percent of their incomes in housing costs and/or live in substandard or overcrowded housing units. Over 60 percent of all extremely low-income home owners and well over 70 percent of all extremely low-income renters are paying more than 30 percent of their income on housing.

Homeless Needs

Persons threatened with homelessness are generally described as persons or households who have incomes of 30 percent of median or less and who pay more than 50 percent of their income for rent. Over 56,000 households in Maryland fall into this category.

Persons With Special Needs

Because of their vulnerability to losing their housing and their difficulty in finding appropriate housing, persons with special needs are among the highest priority households for housing assistance the State will undertake.

Barriers to Affordable Housing

Fair Housing

Lack of affordable housing in many non-urban jurisdictions makes it difficult for the poor, the working poor, and even the middle class to gain access to communities with jobs, good schools, and other opportunities. Strong efforts need to be made to deconcentrate poverty and offer equal opportunities to all Maryland residents by offering affordable housing in all areas of the State.

In addition, some families face racial discrimination which closes doors to affordable housing, either through blatant discrimination such as refusing to rent or sell affordable housing to minority households, or through less visible means of discrimination such as denying equal credit.

Lead Based Paint

Maryland has a high concentration of housing with lead paint and a critical need for more resources to help deal with the removal of this hazardous substance. As established in Maryland's CHAS, it is estimated that 318,000 extremely low-, low-and moderate-income rental units have serious lead hazard potential. An addition 232,000 units occupied by extremely low-, low-, and moderate income home-owners also may have severe lead paint hazards.

Coordination

Memoranda of Understanding (MOU) are utilized as a formal method to recognize and institutionalize mutually beneficial relationships to ensure efficient and maximum use of all available funds. Technical assistance is the primary mechanism to extend the effectiveness of programs. Technical assistance may include assistance with project planning and development, applications assistance, and training and capacity building.

Vision for Change

• decent housing
• a suitable living environment
• economic opportunities.

Housing and Community Development Objectives

• Revitalization -- Revitalization efforts must take a "holistic" approach, addressing economic and social issues as well as housing needs. Housing programs must complement economic and human resource efforts while providing safe, decent and affordable housing to those most in need. Housing programs at the State level must favor those applications from areas targeted for revitalization or located in established communities.
• Supportive Services -- Supportive services should be provided in conjunction with affordable housing activities to the extent that they will allow the recipients of affordable housing to gain secure employment and access to educational opportunities, while providing for their physical and emotional well-being.
• Access to Economic Opportunity -- People of all backgrounds need adequate access to schools and transportation to obtain good jobs at decent wages. Community revitalization includes improving schools, business, recreation, transportation, safety, housing and infrastructure where revitalization efforts are taking place.
• Day Care -- Day-care services should be provided so that beneficiaries of State programs can place their children in cay care while the adults attend school or work.
• Partnerships -- State resources should be leveraged with available federal, local and private resources to expand the scope of the projects which can be undertaken.
• Fair Housing Choice -- Fair Housing Choice should be expanded by spreading out the development of affordable housing.
• Benchmarks -- Benchmarks are useful to charting progress towards the State's goals.
• Capacity Building -- Enhancing local capacity will serve to meet local needs pro-actively by increasing financial resources to rehabilitate or construct affordable housing units, to provide supportive services and to enhance the economic well-being of older communities.
• Cooperation -- Effective housing, economic development and community development activities need to be carried out in a coordinated manner. Information, development of operating agreements among State agencies and coordination of investment among agencies are a major component of the State's planning effort.

Housing and Community Development Priorities

Housing Priorities

• Extremely Low-income Renters
• Low-income Renters
• Extremely Low-income Homeowners
• Low-Income Homeowners
• Moderate-Income Renters
• Moderate-Income Homeowners
• Middle-Income Renters
• Middle-income Homeowners

Non-Housing Community Development Priorities

Infrastructure

• Water, sewer, and drainage
• Streets and roads
• Planning and technical assistance.

Over Federal Fiscal Years 1987 to 1993, nearly one-third of community development CDBG funding has gone to water and sewer projects in low- and moderate-income areas In addition, infrastructure improvements was the area of need most identified during the public hearing process. Planning major infrastructure projects to revitalize or maintain downtown areas is a priority of the State, and the State will provide technical assistance to communities in order to plan appropriately for their needs.

Public facilities and essential human services

• Head Start and Day-Care Centers
• Youth Centers
• Community Facilities
• Health Centers
• Handicapped improvements to address the requirements of the Americans with Disabilities Act.

Economic Development

• Job Development
• Job Training

Anti-Poverty Strategy

State programs and policies aimed at reducing poverty are driven by several trends in Maryland's poverty population. These include: a dramatic increase in the number of children living in poverty, high illiteracy rates, structural changes in the State's job market increasing demand for skilled workers and a decline in manufacturing jobs requiring less education, and high concentrations of poverty in the State's older, distressed neighborhoods.

Key components of the State's Anti-Poverty Strategy include:

Providing quality education and job training:

• Increased financial support for improving schools in targeted areas
• Participation in the national school reform effort
• Increased funding for the Targeted Poverty Program
• Alternative classrooms for disruptive students
• Creation of the new Guaranteed Access Scholarship Program to provide financial assistance to low-income students for higher education
• Increased financial support for construction projects and instructional and research equipment for community colleges

• Statewide Nutrition Assistance Program providing matching grants to food distribution organizations to obtain needed equipment
• Increased child support enforcement through suspension of driver's licenses for non-payment of child support
• Family cap eliminating increased AFDC benefits for recipients who have additional children; recipients would be given vouchers to purchase necessities such as diapers and formula
• Minor parents receiving AFDC benefits must live with parent or guardian unless such an arrangement would jeopardize the minor's physical or emotional health

• Implementation of the Economic Growth, Resource Protection and Planning Act of 1992 through local comprehensive plans will reduce poverty by focusing public and private investment and physical development in existing built-up areas

• The newly created Department of Business and Economic Development (DBED) will focus on a single mission -- business attraction and retention
• State business earmarked for minority-owned firms will increase from ten to fourteen percent
• Tax incentives will be given to businesses who hire employees who receive welfare payments
• The newly created Unemployment Insurance Self-Employment Assistance Program will allow entrepreneurs to continue receiving unemployment insurance benefits while starting a new business
• The State will give preference to CDBG and State-funded employment programs which pay living wages (at least $7 per hour) and provide medical benefits

• The Access to Jobs Program provides transit for City residents to get to suburban jobs
• The Transit Development Incentive Program stimulates investment activity in the vicinity of transit stations

Housing and Community Development Resources

Coordination of Strategic Plan

Projects

Resources

CDBG $11,271,000
HOME $ 5,992,000
ESG  $   509,000

In addition, the State will provide substantial resources of its own for housing, community development, and economic development activities, including about $48 million in State appropriations and about $250 million in bond financing for housing and infrastructure activities.

Coordination

• DHCD will develop Memoranda of Understanding with the Department of Health and Mental Hygiene and the Department of Human Resources setting forth policies for activities which link housing and services
• DHCD will develop a Memoranda of Understanding with the Maryland Department of the Environment to simplify the environmental review process
• DHCD will develop a Memoranda of Understanding with the Maryland Department of Education to coordinate school construction and rehabilitation with neighborhood revitalization and housing development activities
• DHCD will work closely with DBED and the Department of Labor, Licensing and Regulation to coordinate economic development activities, job training, and day care with affordable housing development.

Barrier Removal

The Maryland Housing Policy Commission and the Maryland Commission on Neighborhoods will both review barriers to affordable housing. They will review a broad variety of issues that must be addressed in the development of housing to both meet the needs of the State's low-income households and serve as an essential component in the State's effort to rebuild older communities.

Other Actions

• Local Government Revitalization Strategies The State will use the revitalization strategies developed for the Neighborhood Business Development Program and other locally generated revitalization or growth strategies to focus and allocate resources of DHCD, other State agencies, and other public and private agencies and partnerships
• Institutional Structure Interdepartmental forums will be used to coordinate resources, develop consistent policies and methods to achieve stated goals and objectives. Examples include the Sub-Cabinet on Children, Youth and Families, the Maryland Commission on Neighborhoods and the Housing Policy Commission
• Office of Planning Technical Assistance The Maryland Office of Planning has set goals for improved delivery of information and technical assistance to State and local government agencies that will assist in the coordination of plans for growth with DHCD policies, programs and development projects
• Eased Computer Access to DHCD Homeownership Programs DHCD's Community Development Administration has a major effort underway to improve the ability of lenders to access CDA homeownership programs to reserve mortgage funds for first-time home buyers. The Department is currently exploring software to allow private mortgage companies to dial in and reserve mortgage funds as well as to submit project applications on disk. This effort should become operational within the year
• Eased Use of Special Housing Opportunities Program (SHOP) DHCD also is working to remove restrictions on the SHOP program, which will make it easier to provide group homes for persons with mental illness, developmental disabilities, or other handicaps, and make it easier for other State agencies and non-profit organizations to utilize that program.
• Threshold Criteria for Loans. DHCD will develop threshold criteria for all multi-family applications that target funding and eliminate noncompetitive applications early in the review process.
• Single Commitment for Multi-Family Loans. DHCD will provide a single commitment for all funding sources over which it has control for multi-family housing - State programs, the HOME program, and the Federal Low-Income Housing Tax Credit
• Multi-Year Projects DHCD will fund multi-year projects
• Statewide Data Base DHCD will participate in the development of a Statewide data base being developed by the State Office of Planning
• Anti-Poverty Strategy DHCD will work with local Community Action Agencies and the sub-cabinet on Children, Youth, and Families to begin carrying out its Anti-Poverty strategies
• Barrier Removal DHCD will complete its assessment of barriers to fair housing choice by February 6, 1996. DHCD's Housing Policy Commission will study other barriers to affordable housing as issues arise. In addition, the State's closing cost reform measures will be enacted by most counties before July 1, 1996
• Low Income Housing Tax Credits Federal Low-Income Housing Tax Credits will be awarded through DHCD's uniform application process for multi-family housing
• Enhanced Coordination In addition to the above activities, coordination will be enhanced between public and private housing and social services agencies by the development of Memoranda of Understanding as outlined in the priority and strategy sections of the Consolidated Plan
• Lead Paint Abatement DHCD will continue to work with MDE to abate lead paint hazards in low-income housing units throughout the State

Lead Agencies

The Department of Health and Mental Hygiene Three divisions within DHMH are responsible for taking care of Maryland's population with special needs. The Mental Hygiene Administration (MHA) is responsible for taking care of the needs of the State's mentally ill. The Developmental Disabilities Administration (DDA) was established in 1970 and is responsible for the needs of Maryland's mentally retarded and severely physically handicapped population. The AIDS Administration was established in 1987 and provides public education and surveillance, professional education, and patient support services for persons with AIDS.

The Department of Human Resources (DHR) serves families and individuals who, due to financial hardship, disability, age, chronic disease, or any other cause, need help in obtaining basic necessities of food and shelter.

The Department of Business and Economic Development (DBED) is Maryland's lead agency for carrying out economic development activities and providing job training to help persons obtain better job skills and employment opportunities.

The Maryland Office On Aging administers, consolidates, and coordinates Statewide programs to meet the needs of older Marylanders. The Housing and Continuing Care Division develops, certifies, and helps operate subsidized sheltered housing for the elderly.

The Maryland Department of Education (MSDE) is responsible for ensuring educational opportunities for all of Maryland's residents. This includes providing educational opportunities and programs for Maryland's homeless, especially its homeless children.

The Maryland Department of the Environment (MDE) is responsible for identifying lead hazards in Maryland, as well as monitoring lead paint abatement activities.

Local Governments All of Maryland's counties, and many of its cities, towns, and townships, have offices responsible for coordinating housing activities. Responsibility for housing may reside with local departments of housing, housing agencies, Public Housing Authorities, city administrators, or other agencies or staff. There are more than 100 different local jurisdictions which have formally identified housing offices, agencies, or personnel.

Public Housing Authorities (PHAs) are some of the largest low-income housing providers in Maryland. Depending upon the organizational structure of the PHA, they can be arms of local governments or separate operating entities operating on a not-for-profit basis.

Community Action Agencies (CAAs) are community based organizations chartered by law which work to provide services and activities having a measurable and potentially major impact on the elimination of poverty in their community. The activities undertaken by CAAs to assist low-income persons include helping individuals secure and maintain meaningful employment, attain an adequate education, make better use of available income, obtain and maintain adequate housing and a suitable living environment, obtain emergency assistance through loans or grants to meet immediate and urgent individual and family needs, including the need for health services, nutritious food, housing, and employment-related assistance, remove obstacles and solve problems which block the achievement of self-sufficiency, achieve greater participation in the affairs of the community, and make more effective use of other programs related to these activities.

Non-profit organizations are active in providing affordable housing and services to extremely low-, low-, and moderate-income families. Non-profit organizations may be somewhat different in scope than Community Action Agencies in that they often focus on specific issues such as assistance for the disabled or elderly, rather than focusing on the community as a whole. Maryland has more than 140 active nonprofit organizations which provide housing to needy families.

The Coalition for a Lead-Safe Environment is a group of non-profit and health organizations which will work with DHCD and MDE in helping to solve lead paint problems in Maryland.

For-profit developers play a key role in providing affordable housing in Maryland. In addition to utilizing State funds, for-profit developers have been successful in obtaining federal resources to provide affordable housing, most notably Farmer's Home 515 loans, which provide affordable rental housing to very low- and low-income renters in rural areas, and federal low-income housing tax credits, which are used to provide affordable low-income housing throughout the entire State.

Financial institutions have been strong supporters of efforts to provide affordable housing to Maryland's citizens. Their contributions typically consist of construction lending, providing mortgages to projects receiving federal and State funds, and working extensively with the State's homeownership programs.

Housing Goals