On Thursday morning, more than a dozen construction workers were busy surveying and doing landscape work around a rotunda-like building at 4010 Randolph Road in the Veirs Mill corridor.
Hundreds of steps away, more than 100 people—elected officials, development partners, and state and government workers—were gathered to celebrate the groundbreaking of a 195-unit affordable housing community expected to be completed in 2025.
The $96 million project was a public-private partnership between the county and multiple partners, including AHC Inc.—an affordable housing developer based in Arlington, Virginia. Habitat for Humanity Metro Maryland also contributed $9.9 million for 24 condos and three single-family homes, according to Jeffrey Dee, Habitat’s president and CEO.
Aseem Nigam, director of the county’s Department of Housing and Community Affairs (DHCA), said in an interview that there also will be 168 apartments for rent. Seventeen of those will be at 30% of area median income (AMI), 17 at 40% AMI, 53 at 50% AMI, and 81 at 60% AMI, Nigam said.
According to county DHCA guidelines, 30% of area median income for a single-family household is $29,900. For a family of four, that metric is $42,700.
The county contributed roughly $23.7 million from its capital budget to pay for the development, Nigam said. Private partners, including Habitat, supplied the rest.
County Executive Marc Elrich, other elected officials and project partners said during Thursday’s groundbreaking that the Randolph Road project is unique because it provides deeper levels of affordability for incoming families—more than is required by the county. Elrich said his administration would be looking at proposing rent stabilization legislation and updating the county’s moderately priced dwelling unit program (MDPU), which was established in the 1970s.
Under current county law, the MPDU program “requires that between 12.5% and 15% of the houses in new subdivisions of 20 or more units be moderately priced dwelling units.” For example, a single person’s maximum income for a high-rise apartment, under the law, is $69,500, according to the current program.
Dee said that of the 24 condos that Habitat helped fund, there will be eight each at 30%, 40%, and 50% of AMI.
In an interview, AHC officials Alan Goldstein, vice president of real estate, and Josh Childs, development manager said that the Randolph Road community should be completed and ready for occupancy by 2025.
Goldstein said that AHC was responsible for submitting the proposed development to the county for review, and for pulling together financing for the project. The developer will oversee construction and own the overall community once it’s completed, Goldstein said.
The community is an example of “service-enriched housing,” he said. It will include a community center with educational support, financial literacy classes, health and wellness centers and other amenities, he said.
During their presentation, Goldstein, Dee and elected officials said there would be 85 three- and four-bedroom units available at affordable rates.
Most rental real estate is valued at a per-square-foot rental rate, Goldstein told Bethesda Beat. That’s what makes it difficult for larger apartments to be offered at affordable rates in high-demand markets, he added.
“As you get larger bedroom counts, you can’t necessarily increase the rents commensurate with the additional cost of providing that larger unit,” Goldstein said. “So you pick a sweet spot. You’re usually making your highest rate of return on your smaller units. And when you get to larger and larger [units], it becomes more mission [driven], less return, and logical for a group like [AHC] to be doing it.”
Elected officials said that while Thursday’s groundbreaking was a step in the right direction, they hoped that more projects like the one on Randolph Road would be approved and built in the coming months and years.
County Council President Evan Glass (D-At-large) referenced the Metropolitan Washington Council of Governments’ regional housing goals, which stated that 47,500 new housing units need to be built in the county between 2015 and 2030.
“There’s a lot more we need to do, but this [project] is charting us on that course,” Glass said.