|Photo courtesy of Perseus Reality's website.|
DCMud reports that the Argent apartment building is opening in Silver Spring, MD. In an interesting twist, the apartment building was originally outfitted as a luxury condo building, but faltered in the languishing economy (DCMud reports that not a single condo unit was sucessfully sold). Perseus Reality, the original developer, has also built the snazzy building near the Foggy Bottom Trader Joe's at 24th and M and another pricey condo building off of Wisconsin. Currently, they're developing the space at 14th and W street, near the desirable U Street corridor, which will also contain some affordable units for low-income families.
Pallas Properties purchased the 24.8 million dollar building with the assistance of LIHTC. Per the tax credit requirements, 90% of the units will be reserved for tenants making less than $43,000 per year (60% of the area median income). The remaining 10% of the units will be leased to tenants making less than 50% AMI. These restrictions will remain in place for 30 years.
I think it's an interesting twist of fate to see this luxury building--with underground parking, stainless steel appliances, and granite countertops--become a low-income, multi-family housing building. While critics of assisted housing will likely point to these ammenities as frivolous, I personally think that this scenario is a great example of how tax credits can be extremely beneficial to both businesses and the surrounding community. Perseus was able to get a non-performing asset off it's books, and Pallas now has an investment that it certains expects to appreciate greatly once the LIHTC restrictions expire. And the citizens of Silver Spring gain a building that serves the needs of their low-income residents.
Granted, not everyone is thrilled with this new development because as DCMud points out, Silver Springs' rental market may be overly saturated with subsidized rental housing. The Argent will add 96 new units to existing 561 dedicated low-income units that DCMud cites in existing apartment buildings and those currently under construction in the surrounding area.
While I don't necessarily agree with that concern (trust me, there are more than 561 low-income families in Silver Spring), I would like to raise another one. Why designate the entire building as low-income? Last time I checked, entire high rises that house low-income people don't have the best track record (ahem, Chicago Housing Authority). Mixed-income developments have shown much greater successes for their residents, especially for the children who grow up in them. Baltimore, for example, implemented a resoundingly successful Housing Mobility Program specifically granting housing vouchers to assist families in moving to higher-income, more racially diverse neighborhoods with better public schools. Tenants there reported a general sense of increased quality of life, and that they felt their children were in higher performing, safer schools.
While I appreciate the humorous irony of stainless steel appliances here, I do think that the designation of this building as entirely low-income was an irresponsible policy decision. I just hope that the surrounding neighbhorhood doesn't suffer from this mistake.