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October 22, 2007
Advisory Committee Releases Year-End Report on Preservation Initiative
Major Achievements Reported for Second Year of “Penny for Affordable Housing Fund”; Future Considerations Cited

The Fairfax County Affordable Housing Advisory Committee has released its FY 2007 report on the Penny for Affordable Housing Fund and the Board of Supervisors’ Affordable Housing Preservation Initiative. FY 2007 was the second year for the Penny Fund, an unprecedented dedication by the Board of one penny of the real estate tax rate – or about $21.9 million in FY 2007 – to preserve at-risk affordable housing in Fairfax County.

In its report, the Advisory Committee measured the investment of the Penny Fund versus the overriding and guiding principles and priorities set forth by the Board for the fund. The Committee found that the use of the Penny Fund in FY 2007 was very successful, and created a strong foundation for continued funding in FY 2008 and beyond. Among the successes cited in the report were the following:

  • A total of 520 units were preserved using the Penny Fund in FY 2007. A total of 1412 units have been preserved since the beginning of the Board’s affordable housing preservation initiative as of the end of FY 2007, well in excess of the Board’s goal of preserving 1000 units by the end of 2007.
  • 99.14 percent of the FY 2007 Penny Fund were either spent or encumbered by Board action at the end of the fiscal year. The remaining funds (less than 1 percent) consist of unspent administrative funds.
  • The FY 2006 leveraging for the Penny Fund was 3.96:1, with a per-unit investment of $58,034. Among the sources leveraged were federal Home Investment Partnership (HOME) and Community Development Block Grant (CDBG) programs, as well as tax-exempt bond financing and low-income housing tax credits, among others.
  • There was major progress in serving lower income households compared to FY 2006. Of the 1412 units preserved through FY 2007, 1001 were affordable at 60 percent of the Area Median Income (AMI), including 433 units affordable at 50 percent AMI.

In addition, the Committee has identified issues for consideration as the Preservation Initiative continues. These included:

  • Acknowledging that the Fairfax County multifamily housing market is highly competitive, making the preservation of affordable housing more difficult.
  • Noting that leveraging of other funding sources continues to be the key to the Penny Fund’s success, and recommending that further leveraging opportunities should be identified.
  • Recommending coordination of the Preservation Initiative with homelessness and other housing-related efforts.
  • Recognizing that responding to opportunities in FY 2007 required the use of FY 2008 funds, likely reducing the number of units that can be preserved in FY 2008, and that additional resources are needed to compete in the multifamily market.

The report was developed by a Special Subcommittee of the Advisory Committee, chaired by Kerrie Wilson of Reston Interfaith. To view the September 28, 2007 presentation to the Advisory Committee summarizing the report, click here. To read the full text of the report, click here.