Fairfax County supervisors are pushing for more power to recoup theirstock ofaffordable housing, after dozens of unscrupulous loans sent a bevy of cost-controlled homes into foreclosure last year.
County housing officials say most of the foreclosures were the result of owners’ inability to pay inflated loans taken against the actual market value of their units rather than the fixed price.
Initiated at the county’s request, the legislation would give the county the first chance to buy the units — at a controlled price. The bill is in committee.
County officials fear that if lenders take possession of the units — mostly town houses — their prices would rise back to market value and compromise the county’s much-debated investment in affordable housing.
“Banks have been selling them for the highest value,” said Democratic Lee District Supervisor Jeff McKay. “We cannot be competitive buying them back. It’s gone forever.”
McKay said the county obtained a handful of the three dozen fixed-price homes in foreclosure but cited more than 200 overfinanced units that remain candidates to be sold at market value. In other cases, the county was given cash settlements that amounted to a small fraction of the unit’s selling price.
Since The Examiner reported on the issue in September, eight additional units went into foreclosure, according to housing officials, none of which have gone up for sale.
Part of the county’s “affordable dwelling unit” initiative, the homes were set aside by developers at lower costs in exchange for building large housing projects. Generally, the county neither owned nor subsidized the units.
Supervisor Pat Herrity, R-Springfield, said the county should refrain from more affordable-housing ownership in light of a projected $316 million budget gap.
“The county shouldn’t be in the business of owning and renting housing units unless they are being provided to people with severe disabilities and unable to take care of themselves,” he said.
He said he had no issue with giving builders incentives for development, part of the original intent of the program.
