Friendly Gardens Non-Profit Housing Annual Report
October 2008
Navigation Map     Friendly Gardens (FG) consists of 85 apartments in six three-story buildings at 2423 Lyttonsville Road, Silver Spring, MD.  Having been newly built, the apartment complex was opened in October 1970. There are 22 two-bedroom, 35 three-bedroom, and 28 four-bed-room units. The apartment building is notable for its spacious units, good maintenance and very moderate rents. Of the 85 units, 16 are supported by Department of Housing and Urban Develop-ment (HUD) “Section 8” subsidies which make up the difference between 30% of the household income and a HUD-defined basic rent level.

    Financial Condition. Generally, Friendly Gardens operates on a sound financial basis. The most recent available audited financial report is for the fiscal year ending June 30, 2008, and was positive without any (negative) “findings.” Total revenues for the fiscal year 2008 were $761,058 (up slightly from $727,335 in fy 2007) and total expenses were $642,428 (up slightly from $637,613 in fy 2007), for $118,630 in revenues over expenses. As of July 2008, the HUD-required reserve for replacement fund held $518,433, with another $71,253 in a “residual receipts” account. The FHA mortgage on the property will be paid in full in three and a half years, in April 2012.

    Largely as a result of increased utility costs, Friendly Gardens has needed to increase rents several times in recent years. While not raising rents in 2007, the Board decided to implement a 3% increase beginning August 1, 2008 to offset electricity, gas, and water cost increases. Current monthly rents are $540 for two-bedroom, $582 for three-bedroom, and $652 for four-bedroom apartments.  Most recently, the FG Board instituted a 12% rent increase effective October 1, 2006, as a result of sharply increased utility costs.  Earlier, the Board had raised rents by 5% in July 2005 and by 3.15% in October 2004.

    Even with these increases, rents at FG are estimated to be less than half of those of comparable apartments in the surrounding area.  The Board, with the help of the Whetstone Management Company, has been able to keep rents low in relative terms largely because Montgomery County has exempted the property from payment of property taxes (estimated at $500-600/unit or about $50,000 a year), and because HUD permits FG to retain “excess income,” (amounts collected from tenants paying more than the HUD-defined “basic rents”) estimated to total more than $65,000 per year.  In addition, the Board and management have given close attention to cost factors like water consumption.

    Residents. Friendly Gardens is a relatively stable community of households with low to moderate incomes. In 2007, in the most recent Montgomery County Human Rights Survey, FG reported (using Montgomery County categories) that, of the “primary leaseholders” for the apartments, 34 were Black, 33 Spanish/Latino, 2 White, and 16 “Other” ethnicity. Encouragingly, several times a year a few tenants continue to move out because they have bought their own homes. Periodically, there have been evictions, usually because of housekeeping standards or drug sales or possession by a member of the household.

    With support from area Friends Meetings, and particularly the Bethesda Meeting, the Board has continued to prepare Christmas food baskets, which are distributed to all FG residents about a week before the Christmas holiday.

    Physical Plant. Repairs and replacements are a continuing part of managing a nearly 40 year-old property. FG is subject to inspections by HUD’s Real Estate Assessment Center (REAC).  It is also subject to inspections by Montgomery County. When deficiencies have been identified, the management company arranges for repair or replacement.

    As noted, water is a significant variable cost. The Board and the management company regularly monitor water use and undertake timely repair of small but often significant leaks throughout the system. This monitoring has reduced metered consumption by 15 to 20 percent. In March 2005, the Board initiated a phased introduction of water-saver toilets. When the conversion is completed, it is estimated that savings will be $6000 a year in water usage.

    The steep increase in gas and electricity costs since 2005 and 2006, which led to the rent increases, focused the Board’s attention on ways to make FG’s energy use more efficient. Finding that the flow of warm and cool air in many apartments is inefficient as tenants overheat and overcool their apartments to compensate, the Board asked property management to experiment with ductwork changes in a few units to improve airflow. This experiment is still ongoing.

    Major Issue Regarding Proposed Town-house Development Next Door. The Board continues to give considerable attention to a proposed development of 19 townhouse units on a small parcel adjacent to Friendly Gardens. The focus of concern has been on the developer’s wish to gain access to their development by means of an easement created when the parcel was subdivided in the late 1960s. The easement runs along an existing FG driveway through which traffic in and out of the townhouses could create risks for FG residents, especially children.  The Board has retained legal counsel to assure FG’s interests are actively represented in the planning process before Montgomery County’s Parks and Planning Commission. It has also met several times with members of the neighbor-hood’s Lyttonsville Community Association to discuss the neighborhood’s concerns with the proposed development and to coordinate presen-tations to the County as much as possible.

    Property manager and staff. The long-time property management company is the Whetstone Company and Joe Rector continues as the firm’s long-time representative to the FG Board.  The complex has a staffed rental office, maintenance employees, and a part-time security officer presence.

    Board of Directors. Current directors are Jim Breiling (Sandy Spring FM), Barbara Galloway (Sandy Spring FM), Ralph Hofmeister (Bethesda FM), Richard Mounts (Bethesda FM), Lewis Smith (FMW), and Willie Wilson (FMW).  The Board meets bi-monthly in the Community Room, entered from the middle of the first parking lot to the right of the FG Office.  Meetings are usually on the third Monday, at 7:30 p.m. Visitors are welcome!

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