Last week, EYA’s CEO and co-founder, Bob Youngentob, spoke on a panel with members of ULI Washington to the Planning Directors Advisory Committee of the Metropolitan Washington Council of Government (COG) to share some of the challenges inhibiting new housing production and offer suggestions for changes that could enhance housing production with the region’s planning directors.
COG has put out multiple studies on housing needs in our region, including “The Future of Housing in Greater Washington” in September 2019. This study speaks to the tremendous need for new housing at all income levels, but primarily affordable homes by 2030. COG is projecting a shortfall of over 75,000 homes.
During the small panel discussion, the ULI members presented their perspectives and thoughts to the Committee, in which, Bob focused on the increased complexity in the entitlement process.
Bob Yougentob of EYA, Yolanda Cole of Hickok Cole, Feras Qumseya of Foulger Pratt, Brian Grant of Equity Residential and Jamie Weinbaum of MidCity for sharing their insights during the panel.
“For the first 15 years of EYA, it was basically 3 people doing the same work on acquisitions and entitlements that requires over 12 people today. While it is difficult to pick on any one change in the process, it is clearly more costly and complex. I also explained what I thought were structural challenges in the makeup of housing providers. The low cost manufacturers are the public builders, yet they are not set up or compensated to work on complex entitlements in transit oriented locations. Entrepreneurial developers like EYA are constrained by capacity, capital and required returns on both debt and equity. At the same time the costs of development continue to rise as a result of regulatory requirements, labor and materials.”
He went on to discuss possible solutions and the importance of reducing costs. “Solutions for more affordable housing must include ways to reduce costs; these could include lower cost publicly owned land, reduced regulatory costs, less restrictive zoning and lower cost sources of capital like government issued tax exempt bonds.”
One example is “The Housing Opportunities Commission of Montgomery County (HOC) who has the ability to underwrite and issue their own bonds. This is one reason that they are able to continue to develop new affordable units when it is more challenging for the private sector.” Bob also suggested the possibility of enabling a regional bonding issuer that could be teamed in partnership with an entrepreneurial development team to specifically identify and develop new affordable units on publicly owned land.
EYA intends to continue the conversation with both COG and the Planning Directors Advisory Committee and others to help find ways to increase the supply of new affordable units in the region.
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