Housing Opportunities

County supervisors next month will begin an examination of the affordable housing opportunities afforded by the high number of foreclosed, bank-owned homes.

Arlington, Fairfax and Prince William counties are among the area jurisdictions that have already started down the path of incorporating the foreclosed-home inventory into their overall housing strategies, with teachers, deputies and other government employees among the targeted beneficiaries.

Conceptually, the program has merit if Loudoun simply shifts existing resources-chiefly the Affordable Housing Trust Fund-to help qualified purchasers close on a deal. From a programmatic point of view it matters little whether participants in the county's housing program move into a price-controlled affordable dwelling unit (ADU) provided by a developer as a requirement of rezoning approval or whether they move into a 40-year-old home in a well-established Loudoun neighborhood. With the slowdown in construction of new communities that provide the inventory of ADUs, the private resale market is likely to be an increasing source of housing options in the months ahead, regardless of the board of supervisors' policy actions.

In moving ahead, supervisors should be careful not to put too much of the responsibility on the county government or too much exposure on the county taxpayers. There are other players who should be brought to the table.

First, the banks and mortgage companies have a significant role to play. These types of programs offer the financial institutions an opportunity to more quickly remove the nonperforming assets from their balance sheets. They should be ready to provide low-cost financing or other incentives to buyers qualified through the county program. It was their shoddy lending practices that played a large part in creating this mess and they have a responsibility to invest in its clean up.

The other player should be the federal government. Congress and the executive branch have been negotiating the scope of a mortgage industry bailout valued in the hundreds of billions of dollars. This action comes after years of failing in their responsibility to provide sensible regulatory oversight of the industry. If the feds are intent on spending the money, Loudoun and other local governments seeking to play a role in addressing the spike in foreclosures should work with federal representatives to ensure that some of those dollars trickle through local housing agencies on their way to Wall Street. At the very least, localities willing to invest in this type of housing program should be offered matching federal funds to double the impact and accelerate the benefits.

Working closely with the lending institutions to develop a creative housing program tailored to current market conditions could accomplish two important goals: to help more residents and workers realize the dream of homeownership and eat away at the large inventory of homes on the market to set the stage for a return to increasing property values. One goal improves the workforce and the county's quality of life, and the other could help stabilize the county's crumbling residential real estate tax base and maybe, just maybe, head off another hefty tax increase next spring.