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At 10, DC's housing trust fund has had a tough childhood

This year, DC's Housing Production Trust Fund celebrates 10 years as a key tool for preserving and developing affordable housing in the District of Columbia. It's survived and succeeded despite encountering funding challenges from its inception.

Image from the report.

The Trust Fund has produced and preserved over 7,500 units of affordable housing across every ward in the District. It has disbursed $320 million and leveraged another $794 million from private and other sources, for a total of $1.1 billion in development. DC's Trust Fund has become a model nationally for its guidelines which ensure it is used to serve District residents with the greatest housing need.

Yet the history of the Trust Fund has never been easy. A new report from the Coalition for Nonprofit Housing and Economic Development, titled A Decade of Progress, highlights the Trust Fund's past and current threats to stable and consistent funding as well its successes and impact on neighborhoods across DC.

Established in 1988, the Trust Fund did not have a source of funding to make loans until 2002. At that time, Mayor Anthony Williams proposed using 15% of the DC Real Estate Recordation and Transfer Tax. This tax, based on the value of property at the point of sale, grows the Trust Fund as residential and commercial development occurs in the District.

Over the next few years, higher-than-expected revenues from the Real Estate Recordation and Transfer Tax caused some District leaders to propose cutting the dedicated amount in half to 7.5%. 3 years in a row, advocates had to convince the DC Council to maintain full funding of the Trust Fund.

The Trust Fund soon faced a new problem. When the housing bubble burst in 2008, the economic crash particularly hurt the Housing Production Trust Fund. The Trust Fund lost significant funding. At this point the Trust Fund had a long pipeline of projects to which funding had been committed but not yet dispersed, and was unable to make new loans.

Again, there was a push to provide adequate funding for the Housing Production Trust Fund. That fall, the DC Council, passed the "Housing Production Trust Fund Stabilization Amendment Act of 2008." The amendment guaranteed minimum levels of funding from Real Estate Recordation and Transfer Taxes for the Trust Fund: $70 million in FY 2010, $80 million in FY 2011, and $80 million plus inflation thereafter.

Unfortunately, because the legislation was passed subject to annual appropriation, the Trust Fund has never been funded at those levels. The real estate crash and recovery would have been a prime opportunity to clear out the pipeline and begin to fund new projects, had the Trust Fund gotten the appropriations it needed.

Just two years after the Council committed to funding the Trust Fund at higher levels, the Trust Fund received a major cut in the FY 2012 budget. In the spring of 2011, the Mayor proposed and the DC Council voted for a budget that would use $18 million from the Trust Fund to pay for the ongoing cost of the Local Rent Supplement Program (LRSP) by transferring the funds to the DC Housing Authority.

Previously, the LRSP had been paid for from the District's general fund. In FY 2012, the cut, along with other ongoing costs, reduced the amount of funding left in the Trust Fund for new production and preservation efforts to only $13 million.

This trend of decreased funding has expanded. In FY 2013, the total transfer to the Housing Authority for LRSP will be $19.9 million. Unless a permanent alternative solution to using the Trust Fund to pay for the ongoing cost of LRSP is implemented, it will drain the Fund from its intended use indefinitely.

As part of the current Comprehensive Housing Strategy Task Force appointed by Mayor Gray, an explicit goal is to "develop alternative funding sources for the Housing Production Trust Fund to make funding more predictable."

Despite its rocky history, housing providers, funders, and government continue to applaud the Trust Fund. Nearly every elected current official has, at one point, voted to fund, restore, or improve the Trust Fund. Ideally, the next ten years of the Housing Production Trust Fund will be easier ones.

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. 


Do they work with DCHA and Office of Aging? I mean, what are some of the flagship projects/developments? I should know this but I don't.

At the Humanities Council event a couple weeks ago Mayor Williams specifically mentioned this program and its success under his tenure.

Thanks for the article.

by John Muller on Oct 9, 2012 5:00 pm • linkreport

The program is administered by DHCD, and the individual projects it develops work with a number of partners, often using DCHA vouchers to make housing even more affordable. If you click on the report link, it highlights a number of projects in every ward of the District.

by Falcon on Oct 9, 2012 9:40 pm • linkreport

Thanks, Falcon. DHCD really needs an inside out investigation on what is done with all of their vacant properties east of the river versus these sorts of programs that are there to offer incentives for development. John Hall did nothing and now Michael Kelly is just keeping his toes warm.

by John Muller on Oct 10, 2012 5:20 am • linkreport

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