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Realities of Real Estate: Affordable Housing in Annapolis

Back in 2004, the Annapolis City Council passed an ordinance that created something called a Moderately Priced Dwelling Unit.

Here’s what the city’s web site says about that program: “To ensure that housing choices continue to be available to its residents and employees with moderate incomes, the City Council passed the Moderately Priced Dwelling Unit [MPDU] Law in 2004. This law requires developments of 10 units or more to provide 12 percent of for-sale housing and 6 percent of rentals to be set aside as moderately priced. This means that the sale price or rent is below the market rate for other units in the same development.”

Nearly a decade later, Annapolis Mayor Joshua Cohen has announced that MPDUs are now available. In a town of 38,000 people, nine lucky homebuyers will be afforded the opportunity to purchase property below what the rest of us pay, or market rate.

From a real estate perspective, there are so many problems with the MPDU program that it’s hard to know where to begin.

First, we need to take the Capital of Annapolis to task over how it covered Cohen’s announcement. The headline read: “9 Annapolis homes to go to working class.”

Over many years, we’ve sold everything from a $14,000 mobile home to multi-million dollar waterfront estates. And you know what? With the obvious exception of those who were retired, all of those homebuyers were “working.” Like “fair share,” “working class” is a term political hacks use to curry favor with a certain group of voters; it’s not something you would expect to find in a “news” headline.

Second, is there even a need for this MPDU program? The median price of a house in Anne Arundel County is $330,000. Right now, there are more than 80 homes in the city of Annapolis that are listed below that figure; 57 of them are priced below $250,000.

Within a 5-mile radius of Annapolis City Hall, the number of homes available for less than $330,000 increases to 235, and in all of Anne Arundel County there are more than 1,000 properties listed in that price range.

Yet here we have the mayor of Annapolis touting success by producing nine affordable homes, when there are hundreds of homes on the market right now, waiting to fill that need.

According to the National Association of Realtors, housing affordability is at its highest point ever. Since they began tracking affordability in 1970, the combination of low prices and extremely low interest rates have never before produced this level of purchasing power.

When you get right down to it, the Annapolis MPDU program isn’t really about creating affordable housing; it’s about allowing a favored few to live in “new homes” or neighborhoods that they couldn’t otherwise afford. We’d sure enjoy a nice new waterfront home, but we can’t afford that right now, so we don’t have one.

Third, the MPDU program was billed as a way to allow people to live where they work. Among the list of those who qualify for the program, it specifically identifies City of Annapolis employees. Why should the ability to buy property below market rates become a benefit and entitlement for this select group?

Fourth, Annapolis is already awash in affordable housing. Beyond the many homes that are priced well within reach of moderate income households, Annapolis already has more public housing per capita than any other city in the nation.

And finally, there are many more productive ways to make housing more affordable, other than a piece of feel-good legislation that generates only nine units in eight years.

For instance, high real estate taxes are a primary barrier to home ownership. Over the past eight years, Annapolis City taxes and fees have skyrocketed and are some of the highest in the entire state. Many in Annapolis who have moderate, low or fixed incomes are being forced to move out of the city simply because the real estate taxes have become excessive.

Plus, there are additional taxes associated with buying a home. On a $330,000 Annapolis property, more than $7,000 in state and local taxes are due at the time of purchase.

If Annapolis really wants to generate affordable housing, members of city council should look in the mirror, rather than dig into the pocketbooks of developers already struggling to turn a profit. True home affordability is created by a strong and growing economy, not city laws that mandate selling property below market rates.

Bob and Donna McWilliams are practicing real estate agents in Maryland with more than 25 years of combined experience. Their email address is