Greater Greater Washington

How will Gray's budget address affordable housing?

Mayor Gray is expected to release his proposed Fiscal Year 2013 budget this Friday, a month after the One City Summit. Gray pledged to use the summit's results to shape both his administration and the budget. On Friday, we'll find out just how the budget addresses the summit's top participant-generated concern: the District's lack of affordable housing.


Photo by CitysideManagement on Flickr.

Mayor Gray has the opportunity in this spring's budget exercise to recommit the District and his administration to a strong affordable housing policy.

This policy would protect our current affordable housing stock; allow non-profits and mission-driven for-profits to develop safe, quality affordable housing that benefits both the residents and neighbors; encourage homeownership; and stop the expensive and inefficient quick-fix solutions to homelessness the District currently uses.

At the Coalition for Nonprofit Housing and Economic Development, we have recommended the District focus on restoration and expansion of key housing programs in this budget, as a first step toward a full "Continuum of Housing" that fully meets DC's housing needs.

Restore the Housing Production Trust Fund

This budget must restore $18 million to the Housing Production Trust Fund (HPTF) for its intended purpose of housing production and preservation.

The HPTF is the District's most important tool for producing and preserving affordable housing in DC. Affordable housing providers around the District count on the HPTF to help build new affordable apartments, rehabilitate existing low-cost housing, and help tenants purchase their buildings under the Tenant Opportunity to Purchase Act (TOPA).

When tenants are able to purchase, it increases opportunities for homeownership, preserves low-cost housing, and keeps long-time residents in their neighborhoods. In the 10-year history of the Housing Production Trust Fund, 7,000 housing units in more than 100 locations have been completed or are under construction using dollars from the Trust Fund. It has developed and rehabilitated housing in every ward of the District.

Fully fund the Local Rent Supplement Program

The Local Rent Supplement Program (LRSP) must be fully funded from from the General Fund, including $6 million to address a projected shortfall in the DC Housing Authority's LRSP budget. Failing to fill this gap would jeopardize housing for 514 households.

Utilize the Housing First Fund and LRSP to serve new people

This budget should invest $5 million from the Nationals Stadium Community Benefit Fund for Housing First and $5 million for the LRSP to serve new people.

Both LRSP and Housing First were developed to house the tens of thousands of people on the DC Housing Authority's waiting list, to address the ongoing homelessness crisis in the District, and to support the production of permanent supportive housing. Without additional funds, these programs are not able to serve any new residents.

Maintain funding for the Home Purchase Assistance Program

If federal funds for the Home Purchase Assistance Program (HPAP) are cut, DC should keep the program whole with additional local funds.

HPAP has been a key tool for increasing DC's homeownership rate. Maintaining constant funding is crucial to helping low- and moderate-income residents move into homeownership and remain in the District. The current funding level allows 500 families to receive assistance to buy their first home.

In the District, homeownership would often be a less expensive housing option than renting, but residents need additional support to move into homeownership. Homeownership maintains neighborhood stability and can also help families use equity in their homes to finance college and build their net worth.

In a recent press conference, Mayor Gray focused on his administration's appointment of a new team to review the 2006 Comprehensive Housing Strategy Task Force Report. The new task force will look at concrete ways to make the previous recommendations a reality.

We applaud this approach, but realize that the updated task force report won't be completed until well into the year, and if the mayor does not act now, 2013 will foster the same stagnation in affordable housing that we see now in 2012.

DC cannot wait another year or more for good affordable housing policy. Mayor Gray must respond to residents' concerns, made even more apparent in the One City Summit, with an investment in affordable housing that starts now.

Elizabeth Falcon is the campaign organizer for the Coalition for Nonprofit Housing and Economic Development (CNHED), an association of affordable housing developers, community organizations, government agencies and more in DC. She writes about how policies affect affordable housing at the Housing For All blog. 

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Waste of time, waste of money.

These programs don't even begin to make a dent in what is considered to be "the problem". The money gets siphoned off by the pass through non-profit managing organizations for director level salaries. Very few people get helped, and even fewer get helped in a meaningful way.

Secondly, home renovation and maintenance costs are generally indexed to the cost of housing. If you can't afford the house unassisted, then you can't afford the maintenance. If you don't generally walk around with $1000 in your savings account, or a credit limit of $3-4k, then owning a home could be a disastrous financial decision. When the hot water heater breaks, the landlord isn't going to fix it for you.

Mayor Gray would be better off spending the money for tuition vouchers at accredited out of state universities (the Virginia and Maryland state school system could be leveraged) to provide the SKILLS that would make them EMPLOYABLE at the federal level. We've been trying housing programs for 30-40 years, and the track record shows that they always fail.

by ahk on Mar 19, 2012 2:41 pm • linkreport

Question 1: why do affordable housing advocates tend to encourage home ownership programs, rather than focus on affordable rentals? Isn't this largely the upper middle class subsidizing the lower middle class? Aren't the dollars better spent only on rentals for the neediest?
Question 2: Why do so few afforadable housing advocates make the Yglesias zoning argument (that is, more density means more supply and lower prices)?

by Curious on Mar 19, 2012 2:51 pm • linkreport

Maintaining constant funding is crucial to helping low- and moderate-income residents move into homeownership and remain in the District.

I don't want to see all of DC turn into a enclave of the super-wealthy, and I think we need to do more to make living in the city possible for teachers, police, firemen, etc... That's the sort of "affordable housing" programs I'd like to see aggressively pursued.

Having said that, I'm not sure what the compelling District interest is in artificially propping up the number of poor and homeless in DC. It's a regional issue, and DC residents are already carrying a far, far disproportionate share of the region's social services.

I know the regional policy for a century has been "poor and homeless people are 'quarantined' in the city where they won't offend suburbanites" and it's pretty clear what folks in the suburbs get out of that deal, but I'm not sure what benefit DC gets in perpetuating that dynamic.

by oboe on Mar 19, 2012 3:00 pm • linkreport

@Curious:

Good point. We've got no shortage of the very, very poor in DC. What we need to support is workforce housing--mostly rentals. Density will do this.

by oboe on Mar 19, 2012 3:03 pm • linkreport

Question 2: Why do so few afforadable housing advocates make the Yglesias zoning argument (that is, more density means more supply and lower prices)?

I wouldn't expect affordable housing advocates to immediately jump all over this, since I don't think you'd see a dent in affordability overnight (in part because the constraint on supply is so stringent and the pent-up demand is so large), but this clearly has to be part of the longer term strategy.

The supply side of the equation also needs to be addressed - and indeed, you rarely see it mentioned.

http://www.austincontrarian.com/austincontrarian/2012/03/this-is-how-housing-markets-are-supposed-to-work.html

This link isn't meant to say nice things about Houston, but merely to show what it means when construction of new units is allowed to ebb and flow with demand. If you get such a market where the overall prices are more affordable to start with, then the gap that needs to be closed for affordable housing advocates is that much smaller.

by Alex B. on Mar 19, 2012 3:08 pm • linkreport

"Question 1: why do affordable housing advocates tend to encourage home ownership programs, rather than focus on affordable rentals?"

among other reasons, because by changing the mix you can give a nabe greater stability, more people with a long term stake, more activist, etc.

To the extent that positive changes in DC benefit owners, but raise rents for renters, having more owners can both create a wider share in the benefits, and at least in theory lessen political opposition to improvements.

by AWalkerInTheCity on Mar 19, 2012 3:18 pm • linkreport

"Question 2: Why do so few afforadable housing advocates make the Yglesias zoning argument (that is, more density means more supply and lower prices)? "

why would they want to get all over that political hot button? Which isnt going to be decided by the weight they have throw around anyway?

by AWalkerInTheCity on Mar 19, 2012 3:20 pm • linkreport

I concur with many of the above sentiments. Programs for the poorest families provide tons of money to pay for rents for these people. But what options do the working poor and middle class have? Very little, other than group housing with each person paying between $750 and 1000 per bedroom.

I just can't imagine DC with a high apartment vacancy rate.

by Tom A. on Mar 19, 2012 3:23 pm • linkreport

Gray's budget already addresses affordable housing. The District, either by pure neglect or purposely spends a Scrooge McDuck sized pile of money every year on current affordable housing. Making smarter decisions with the sea of money already allocated to the task would be a great start.

For example, just last week we learned Erna's House opened. It is a 31 unit apt complex for homeless women.

It is privatly owned. The District pays the owner 750K a year to lease the apartments (or just over 2K/month per apt).

Then we have the 400K a year in the building operating costs, the District taxpayer being on the hook for 300K of it.

That rachets up the cost per unit to $2,822 per 1 bedroom apartment which is beyond ridiculous.

So where is the waste here? One, paying a private owner above market rates for these units. Two, this building was just bought a year ago for 2 million, the new owner spent a million renovating it, something the District could have done and it would have paid for itself in 4 years. But no, the District will continue paying ridiculous above market rates forever when they could have used the savings to take care of more people.

by Arno on Mar 19, 2012 3:42 pm • linkreport

There's plenty of affordable housing in DC...it's just not in areas with good amenities and transportation. Why not focus on making those areas better by brokering deals to bring more/better retail EOTR, improving transit options, and reducing crime (it's appalling that Gray/Council didn't fully fund Lanier's budget request for officers in the midst of a crime wave)? That would seem like a much better way to leverage government spending than direct subsidies which only benefit a few hundred people instead of thousands.

by Falls Church on Mar 19, 2012 4:21 pm • linkreport

The District, either by pure neglect or purposely spends a Scrooge McDuck sized pile of money every year on current affordable housing.

And, of course, here we get back to the definitional problem at the heart of the issue: generally when DC non-profits talk about "affordable housing" they're explicitly *not* talking about "workforce housing". They're talking about more money to increase DC's total share of regional poverty.

by oboe on Mar 19, 2012 4:44 pm • linkreport

We advocate for housing programs that meet the many different needs of District residents. Much of what we focus on is rental housing, but we also believe that home ownership should be an option that is available to low and moderate income residents as well as rental housing.

Within the rental market, we appreciate that there are needs at various income levels. In fact the Housing Production Trust Fund is intended to make housing affordable not just for very low income families, but for households with up to 80% AMI. We also advocate for permanent supportive housing for very-low income families. It is much more cost-effective for the city than the current emergency response systems of shelter, emergency rooms, and jail. It also provides better outcome for residents, allowing them to seek better jobs or further their education.

by E. Falcon on Mar 19, 2012 6:26 pm • linkreport

Thanks, Elizabeth, for raising affordable housing issues and the upcoming budget asks in this article. I work for an affordable homeownership corporation named Manna and am very heartened by the Continuum, by affordable housing organizations working in a more cohesive manner to create a dynamic continuum of affordable housing that moves people up and out of poverty. I'm on the end of the Continuum, where qualified and prepared low and moderate income individuals and families are starting to build assets through homeownership; through our organization alone, our over 1,000 buyers from the last 30 years have collectively built over 89 million dollars in equity, generated 1.7 million in taxes for the City, and with only a 2% foreclosure rate.

The entire spectrum of affordable housing is absolutely essential as it supports and moves people along in an extremely expensive city, getting them out of systems of poverty. This is good for these families, good for the City diversity-wise, development-wise, financially...I'll end with a story of Billy Hart who went from jail, to transitional housing, to affordable rental, to being a homeowner for over 15 years now: http://www.youtube.com/watch?v=hDNEDT1ODms. The City and all of its residents need more stories of success like this, and we can work together to make it happen.

by Sarah Scruggs on Mar 22, 2012 5:45 pm • linkreport

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