Greater Greater Washington

Development


DC mulls new affordable housing rules in public land deals

When the District government bids out city-owned property for development, it asks for affordable housing to be part of the deal, but how much is enough? Councilmember Kenyan McDuffie is proposing that 20-30% of the housing in any such deal be affordable for low-income households.


Photo by Daniel Lobo on Flickr.

On properties that DC has offered for development, like Parcel 42 in Shaw or the Hine School on Capitol Hill, the city has a great opportunity to not only create and enrich walkable neighborhoods, but receive additional benefits for residents as part of the deal between the city and the developer.

One of the greatest needs we have right now is to increase the supply of affordable housing. But how do we best maximize affordable housing in public land deals and do so in a way that's the best deal for the city and residents?

One in five DC households spends more than half of their income on housing, a severe housing burden, according to the DC Fiscal Policy Institute. Nearly all renters with this severe housing cost burden earn less than half of the area median income (AMI), or less than $48,300 a year for a family of three.

The purpose of McDuffie's bill is to ensure that DC fully leverages the deals involving city-owned land to address the continuing challenge of housing affordability for low- and moderate-income households. Under the bill, when DC sells or leases public land for private multifamily residential development, at least 30% of the units would be affordable if the project is close to a Metro station or major transit line. Developments elsewhere in the city must include 20% affordable units.

Affordable rental units would be available to households earning between 30% and 50% of AMI, or just under $30,000 and $50,000 per year for a family of 3. Owner-occupied affordable units would be priced for households earning between 50% and 80% AMI, or just under $50,000 and $78,000 per year for a family of 3.

McDuffie's bill would allow the city to subsidize the cost of the affordable units by selling or leasing the land at a discount, allowing the developer to pass on the savings to buyers or renters. If the land value is not sufficient to subsidize the required units, the bill provides for the District's Chief Financial Officer to certify that the alternative proposal nonetheless maximizes affordability, taking into account all available subsidies.

The Coalition for Smarter Growth highlighted the unpredictability of the city's commitment to affordable housing in public land deals last year in a report called Public Land for Public Good: Making the Most of City Land to Meet Affordable Housing Needs. It's encouraging that DC leaders are using another tool to create affordable housing, ensuring that households of all means can have a place in the city as it grows.

Cheryl Cort is Policy Director for the Coalition for Smarter Growth. She works with community activists, non-profit groups and government agencies to promote transit-oriented development, housing choices, economic development and pedestrian safety, especially in less affluent communities. 

Comments

Add a comment »

I agree with the policy but I worry about the implementaiton. There was an article in the Post a while ago that found some of the residents in affordable units ran into issues with condo fees and or resented lower quality amenities. I do think its a good thing though. Once the market is big enough there will be less of an issue with people being stuck in units they can't sell. Perhaps there should be a mechanism to sell it back to the city if you can't do it yourself within a year?

by BTA on Dec 2, 2013 12:52 pm • linkreport

The issue you refer to is a problem that was early in the city's efforts, and has been addressed. Since the early days(early 2000s) of requiring affordable condos in mixed income buildings, DC developed the Inclusionary Zoning regulations which standardized the covenants and pricing for both IZ units and similar affordable units for public land deals or Planned Unit Developments reviewed by the Zoning Commission. Though the city government always needs to be improving its implementation of these programs, and provide better oversight to ensure that the quality of every unit is to standard and homeowners have all the assistance they need to sell their units.

by Cheryl Cort on Dec 2, 2013 1:25 pm • linkreport

Fwiw, I've suggested this for years. I have criticized the IZ movement for being too narrow in their thinking and not considering the development of a broader and deeper housing agenda, policy and program, rather than only some affordable housing in the context of new private market housing construction.

As you know, separately, DC's housing production trust fund is actually a national best practice. And they are doing a lot of production of social housing.

But DC lands can be used to generate more affordable housing even so, especially in areas of high demand.

Plus, DC could be more purposively involved in including social housing projects as part of larger site development projects, like what it is pretty customary in Europe.

by Richard Layman on Dec 2, 2013 4:42 pm • linkreport

@Richard Layman - IZ isnt a movement, it's a tool. We did a campaign to win it once we had secured other key housing policies, beginning with a substantial dedicated revenue source to the Housing Production Trust Fund in the Housing Act of 2002. We also won affordable housing requirements on Anacostia Waterfront Initiative (city-owned) lands, and attempted (and failed) to cover all public lands. Thus the missing piece was what was happening on private lands. IZ fills this missing piece by requiring affordable housing in matter of right developments.

CM McDuffie's bill learns the lessons of some of these previous efforts, and will ensure that we have strong standards for affordable housing in city land deals.

by Cheryl Cort on Dec 2, 2013 5:29 pm • linkreport

yep, but focusing on the tool, without a broader program, means you spend all your energy and social and organizational capital on one portion of what should be an encompassing agenda, and in effect, prevent a full agenda from being accomplished, which happens because a tool was being conflated to being the complete agenda.

by Richard Layman on Dec 3, 2013 9:30 am • linkreport

Two shortcomings in implementation of IZ (at least as it relates to Hine School development) are exceptions granted the developer to (1.) Segregate most of the affordable units in a separate, nearby building with a lower standard of amenities, public space and construction materials, which is not what one might expect under "inclusionary housing," and (2.) The units are not affordable forever, but only for a short time before they become market rate units with no accommodation to the next generation of middle-to-lower income residents.

The author, of course, is aware of these loopholes. Her organization lobbied hard to get those exceptions granted to the Hine School developers.

by Trulee_Pist on Dec 3, 2013 12:47 pm • linkreport

I am not super familiar with the Hine elements. It is pretty typical in for profit developments for affordable units to have a different level of materials and finishings that is less costly compared to the market rate units.

Letting the units term out of the program seems to be counter to the intent of IZ and the idea of socially inclusionary housing programming.

There are tough issues in how we deal with affordable housing as elements of housing production by the private sector in the US. As long as it's a spillover of private sector development, there are going to be constraints and compromises.

In Europe, typically they will carve out social housing as part of multi-building site development.

What it might have meant with Hine is making say the building that is on the north side of C Street a 100% social housing building. That doesn't mean all low income like Kentucky Courts, but it is different from how we do things here.

by Richard Layman on Dec 3, 2013 12:59 pm • linkreport

Richard Layman is absolutely correct that the spirit of DC's IZ law is violated by letting the affordable units term out. That's Strike One against the Hine scheme.

Richard should walk through the mixed-income development where Capper-Carrolsburg used to be, roughly between 2nd and 7th Streets from Eye Street to M St SW. Try to identify which are townhouses are market rate and which are below-market. You can't! Exactly the same materials and finishings! That's also the spirit of DC's IZ law, also violated by a segregated low-income unit at Hine, Strike Two.

Cort's organization knew that when they lobbied vigorously for exemptions from those aspects of IZ at Hine.

Cort may not have known at the time that while on Hine the city has a great opportunity to...receive additional benefits for residents as part of the deal between the city and the developer, (as well as getting C Street SE reconnected through the development from 7th to 8th Streets SE), in a secret deal the city agreed to repay the developer 100% of the cost of building the affordable housing unit and rebuilding C Street SE. Strike Three--in the Hine deal, the city actually foots the bill for the two main "benefits" the developer offers in exchange for getting the development rights.

Now that the Coalition for Smarter Growth has learned that the benefits the Hine developer is offering the city in the Hine scheme are paid for by the city (not the developer), does that organization want to reconsider its unquestioning support for the Hine scheme?

by Trulee_Pist on Dec 3, 2013 3:52 pm • linkreport

Ooops, Capper Carrolsburg is in SE, not SW. Sorry for the typo

by Trulee_Pist on Dec 3, 2013 3:55 pm • linkreport

Im not sure its unreasonable for IZ to time out. A. who knows what the regions and citys needs will be down the road? One does not need to be opposed to AH and IZ, to think that the long term solution has to be social and economic change, not provision of subsidized housing. B. as thayer might point out, many new buildings are not built to last forever, and will eventually be rehabbed or completely rebuilt again.

As for the seperate building, IIRC that was due to site specific considerations that meant full access to the amenities was not available to both buildings. Its odd, here in NoVa the case against AH/IZ is in part based on the resentment of taxpayers against people paying below market rents and getting luxury amenities. In DC the purported case is that the IZ does not have full access to amenities.

Let us recall at the time most opposition to Hines redevelopment did not want new development there, and esp wanted lower density. Would the people living in the new IZ there be better off it had never been built?

as for the secret deal, I guess the reason there is no link to it, is because its, well, secret, eh?

by AWalkerInTheCity on Dec 3, 2013 5:03 pm • linkreport

BTW - TP

I am sure you are aware that most of the replacement housing for Capper Carrolsburg hasn't even been built yet? And that was replacement for existing public housing, not new AH for people who had not previously lived in guaranteed AH? Can you see how the standard in that case might be different?

by AWalkerInTheCity on Dec 3, 2013 5:05 pm • linkreport

Also note, in the case of what IS built are townhouses on a large site of multiple blocks with (naturally) no in unit amenities. You can imagine how the challenges of building on a more constrained site might be different?

by AWalkerInTheCity on Dec 3, 2013 5:06 pm • linkreport

@Trulee - we have this discussion every time (see all previous posts). You are mistaken in your understanding of the Hine school public land disposition which is a PUD. This is an outstanding public land deal with 29% affordable housing down to extremely affordable levels. It's in a terrific neighborhood. It's a model. Here's what I've said before in response to your assertions.

From our July 2012 conversation:

@Trulee - Re. Hine PUD - this is exempt due to it being a PUD, but follows the basics of IZ by including essentially IZ units in the market rate South building -- 12 units affordable at 80% AMI. These are affordable for the life of the build, per IZ requirements. Additionally, because the project is a public land disposition, the city required far more affordable housing in the project. This is what the North building is -- a 100% affordable building with 29 units affordable at 60% AMI, and 5 units at 30% AMI. The project overall has 29% affordability. The very low and extremely low income units provided in the north building are subsidized by low income housing tax credits, along with the public land value discount. Tax credit deals tend to be 100% affordable because they are far easier to finance this way. Offering very affordable new, accessible housing in this highly desirable location is a great example of fostering a mixed income neighborhood. The north building is not isolated or put under a freeway, it's right in the middle of things. As for IZ - the project conforms to IZ with the 12 80% AMI units in the south building. See my testimony on Hine here: http://bit.ly/LOFBdF
by Cheryl Cort on Jul 13, 2012 11:34 am

by Cheryl Cort on Dec 3, 2013 5:18 pm • linkreport

@Richard - I've never focused on IZ to the exclusion of other more important policies. I've never suggested it is not part of a comprehensive agenda. It's possible might not have tracked these housing issues as closely as you would have liked. Check out our (CSG) housing publications beginning in the early 2000s to get a complete picture on IZ's role in a larger housing agenda.

IZ is a good tool that we should use. It takes work to refine it and get it working right. After winning the dedicated revenue source for the Housing Production Trust Fund, we worked to secure affordable housing commitments on public lands and private land. IZ is the tool for private land - and the only tool for market rate, matter of right development. So we are covering many aspects of the housing market with DC's toolbox of housing policies. This also includes Tenants Opportunity to Purchase (TOPA), and rent moderation. IZ is complicated so it needs work to refine, this requires attention, but the payoff is big -- very little cost to integrating nearly all new development with below market rate units.

by Cheryl Cort on Dec 3, 2013 5:28 pm • linkreport

@WalkerInnaCity, I think you are mixing up two things here regarding Capper Carrolsburg. Phase I was completed last year, and the DCHA release states This phase completes the 323 townhome units ranging from public housing to workforce housing to market rate homes in the $700,000 to $ 1 million+ range. . http://bit.ly/1beC0yg

That's the neighborhood you and Richard Layman could walk through right now, and you would not be able to identify public housing from workforce housing from market rate homes.

As for whether it's reasonable for AH to time out, that's not how DC IZ law works. Don't believe me? Cheryl Cort says so in the next post! These are affordable for the life of the build, per IZ requirements. "These," in this case, referring to the 12 AH units in the south building, in contrast to the 34 units segregated in the north building, which do term out, in violation of the spirit and letter of DC IZ.

There are no "special challenges to building on a more constrained site" at Hine that required a segregated temporarily low-income building set outside the gated community on the south end of the site. C'mon man. The developer does not want the segregated, low-income tenants having access to the amenities (not even the parking lot. The Zoning Commission required access to the underground parking over the developer's objections.)

We have different opinions. I like the feel of truly inclusionary AH such as what Capper Carrolsburg (now known as Capitol Quarter) represents. I don't like AH segregated as in the Hine scheme, merely to protect the tender sensibilities of the class of people the developer anticipates will buy the apartments and condos they'll be selling in the south building on completion of this thing.

You are correct, of course, that it's tricky to deliver a link to a secret agreement. In this Hine scheme PUD case, however, the Zoning Commission was required to determine that the "benefits provided to the community by the developer" are a fair trade for the upzoned height and density permitted under the PUD. They did that without access to the secret agreement, and just assumed the developer was paying for the AH unit and the C Street SE reconnection. The developer is not paying for those benefits. The city is paying to build the AH unit and the C Street reconnection, not the developer. It was only AFTER the final Zoning Commission order that the DC government finally coughed up those financial details in response to an FOIA.

There is a whole court case about whether, in the absence of this information, the Zoning Commission could have really carried out its PUD responsibilities while ignorant of the fact that the city was paying for the benefits the developer was offering the city--the case has been argued and briefed and all sides await the Court's opinion. You could look it up.

But I'm doing Christmas this "Hine scheme" way with friends and family from now on: I'll buy you a fabulous Christmas present, so long as you reimburse me 100% of the cost as soon as you get the present.

by Trulee_Pist on Dec 3, 2013 8:21 pm • linkreport

"As for whether it's reasonable for AH to time out, that's not how DC IZ law works. Don't believe me? Cheryl Cort says so in the next post! These are affordable for the life of the build, per IZ requirements. "These," in this case, referring to the 12 AH units in the south building, in contrast to the 34 units segregated in the north building, which do term out, in violation of the spirit and letter of DC IZ."

apparently only the spirit, since they are not actually covered by the IZ law. As I know only because Ms Cort responded to your post.

As for carrolsburg, I have walked through the townhouses many times. The THs were only part of the replacement housing. that the rest of the replacement housing has not been built is the scandal, and so its rather odd that you cite it as a positive example. It is not. What is happening at Hine is much better for people needing AH than what happened in capper. Which leads me to suspect your real concern is not with the poor people, who are getting better housing, but with the density of the Hines project.

as for the secret agreement, since its public enough for you to know about it, I am sure you can link to a balanced discusion in the media of the issues involved with it.

by AWalkerInTheCity on Dec 3, 2013 9:20 pm • linkreport

@Walker, you want a "balanced discussion in the media" about the secret Hine scheme agreement? Pshaw! Here's the secret agreement itself, in all its secretive redacted glory:

http://capitolhillcorner.files.wordpress.com/2013/07/revised-amendment-to-hine-ldda-dated-july-10-2013-redacted.pdf

You have to go to the last part of the last appendix for the good parts, with all the secret numbers, on pages 16-17.

Oooooops, those pages are mostly blacked out with redactions.

Try this instead, especially:
Even more problematic – and in apparent violation of the IZ regulations – the segregated affordable housing units expire in 40 years, at which point they become market-rate
units. ...The PUD ...directly contravenes the general policies of the IZ regulations, including “ensuring the benefits of economic integration for the residents
of the District.” 11 DCMR 2600.3(e)

and

Among the...benefits the Zoning Commission credited the developer, SEB, with providing are the 46 affordable housing units the PUD is to include. The Commission further found a public benefit in that SEB would "reintroduce the currently closed portion of C Street between 7th and 8th Streets"...What SEB failed to disclose, however, is that District taxpayers are obligated to pay for these proffered benefits pursuant to the Land Disposition and Development Agreement....that is, the LDDA document above that had the relevant math for this scheme redacted.

That's available for you to read at your leisure at http://capitolhillcorner.files.wordpress.com/2013/07/howell-v-dc-zc_brief-of-petitioners.pdf

by Trulee_Pist on Dec 3, 2013 10:50 pm • linkreport

The information presented by @truleepist is incorrect. In fact, it is misinformation. Let it be known:

- truleepist and his wife are both parties in the appeal against the project through their membership in emmca.
-the blog he provides links to make his case is written by on outright opponent of the project who is also party to the appeal through his membership of emmca.
-the economic terms of the deal (LDDA, term sheet summary, property assessments, what DC valued the asset at, ground lease, etc.) which he claims are "secret" have been available since 2010 by simply typing hine on the dc council website http://dcclims1.dccouncil.us/lims/search.aspx on pg 3. In fact, truleepist attended and testified against the project at the very council hearing which this report and term sheet of the deal was presented by Stanton-EastBanc.
-If you have followed the hine school development at all, you know truleepist and a limited group of neighbors have at some point or another protested the height, design, look, retail, use, parking, affordable housing to name of few. He clearly doesn't like this project as designed and doesn't want it to proceed. His current argument that the project is "secretive" is disingenuous. It's only a small click away. Don't buy the misinformation.

by Alex on Dec 4, 2013 8:43 am • linkreport

@Alex , let's see if the moderator of this fine blog steps in to remove your comment as an ad hominem and false attack.

I am not sure why providing links to documents (at the request of @Walker) is "misinformation." Those are official documents in the case (or in the first link, redactions of the critical information from the LDDA). Anyone can read the documents linked above and come to their own conclusions. That's information, not disinformation.

I am not a party to the lawsuit. Neither is Mrs. Trulee_Pist. The list of parties to the lawsuit is listed in the first paragraph of the lawsuit. That's available for you to read at your leisure at http://capitolhillcorner.files.wordpress.com/2013/07/howell-v-dc-zc_brief-of-petitioners.pdf I don't see my name or the name of Mrs. Trulee_Pist.

EMMCA, the organization of residents living near Eastern Market, is a party to the Zoning Commission case. As such, EMMCA is an intervenor in the lawsuit, not a party to it.

The LDDA terms, in particular the fact that the city's taxpayers are obligated to pay for benefits the developer, SEB, is supposedly gifting to the city, was not available prior to the final Zoning Commission order--the LDDA available at the time redacted that critical information.

Anyone still interested can read the lawsuit in the link above. Argument #1 is I. The Commission Improperly Decided This Case on an Incomplete Record, Based on Evidence Stanton-EastBanc Failed to Submit. The evidence SEB failed to submit being the details about who pays for the "benefits"--the developer or the taxpayers. That's now up to the Court to decide.

Now, on the topic of misinformation that Alex raises, let it be known Alex, what is your relationship, if any, to the partners in Stanton Development?

by Trulee_Pist on Dec 4, 2013 11:15 am • linkreport

Mr Pist

I could not get your link to open.

One of the advantages of the mainstream media, aside from often giving both sides of a contenious issue, is that they typically have more functional web sites.

Alex

I also had difficulty with the Council sites search function. I would request you provide a link to the specific document you mean.

Since this is in the courts, I guess they will decide it, examining arguments on both sides. meanwhile I do not think personal attacks on Ms Cort, that distract from discussion of CM Duffies bill, are any more helpful than discussions of the affiliation of commenters here, either with the developer or with local associations.

by AWalkerInTheCity on Dec 4, 2013 11:25 am • linkreport

The council LIMS website can often be slow.

What you are looking for is: ""HINE JUNIOR HIGH SCHOOL DISPOSITION APPROVAL RESOLUTION OF 2010"."

See:
http://dcclims1.dccouncil.us/lims/legislation.aspx?LegNo=PR18-0963&Description=%22HINE+JUNIOR+HIGH+SCHOOL+DISPOSITION+APPROVAL+RESOLUTION+OF+2010%22.++++%0d%0a+&ID=24279

In 2010 the council voted unanimously to approve the Hine Disposition. Before the vote the Committee on Economic Development put together a 350+ page report about the disposition (you can view if by clicking on committee report). This included the term sheet the council voted on and the draft LDDA and draft ground lease.

You can find the full document at:
http://dcclims1.dccouncil.us/images/00001/20100910163220.pdf

This document has been available to the public since 2010 and was part of the testimony of supporters and opponents to the project.

The developer testified that the community benefits would be paid for using the land value (See Testimony of Ken Golding "We are able to provide all the public benefits and required amenities solely from the land value") and the term sheet (along with the LDDA) clearly state what the deducts were. ("Annual ground rent equal to 5% of the value of the property... less deductions for the cost of providing District mandated affordable housing, environmental remediation, and any extraordinary or off-site proffer as required by the PUD to redevelop the property. All such deducts are subject to the District's approval.")

by DCPlans on Dec 5, 2013 11:49 am • linkreport

Add a Comment

Name: (will be displayed on the comments page)

Email: (must be your real address, but will be kept private)

URL: (optional, will be displayed)

Your comment:

By submitting a comment, you agree to abide by our comment policy.
Notify me of followup comments via email. (You can also subscribe without commenting.)
Save my name and email address on this computer so I don't have to enter it next time, and so I don't have to answer the anti-spam map challenge question in the future.

or

Support Us