DC’s affordable housing programs are slated to get more money than ever before

This year’s DC budget includes the most funding ever for affordable housing programs: $222 million. Here’s how the money will be spent:

Nearly half of the funds, $100 million, will go into the Housing Production Trust Fund (HPTF). This will pay to renovate or create 1,000 homes for low income households. Next year’s funding is roughly double this year’s level and is one of the highest in the trust fund’s history.

The HPTF creates affordable housing through grants and loans to nonprofit and mission-driven for-profit housing developers, as well as to renters exercising their Tenant Opportunity to Purchase Act (TOPA) rights. Housing developers and/or TOPA renters are able to use HPTF assistance to leverage additional private financing. As a result, every dollar from the trust fund results in $4-$5 of new housing development.

The HPTF targets very low and extremely low income households, who face by far the greatest need for affordable housing. Rental housing created by the HPTF must be affordable for at least 40 years, and homeownership units (which are purchased rather than rented) have to be affordable for at least 5-15 years, depending on various factors.

Since 2002, the HPTF has produced and preserved over 8,500 affordable units across the city, with 2,300 more units in the pipeline. An estimated 18,000 DC residents currently live in units funded by the Trust Fund.

Rental Assistance

The budget also includes $7 million to expand rental assistance to 500 more households through DC’s Local Rent Supplement Program (LRSP). LSRP provides vouchers that cover the difference between the cost of rent and what the household can afford to pay (30 percent of income). This support can mean the difference between homelessness or couch surfing with friends and relatives, and having an adequate home to return to at the end of each (low paid) workday.

The budget also creates a new rental assistance program, called Targeted Assisted Housing, to help 500 formerly homeless families and individuals.

Altogether, DC’s locally funded rental assistance will expand by 20 percent next year and serve 1,000 more households.

Permanent Supportive Housing

Another important commitment is to boost funding to end to chronic homelessness. The budget provides $34 million and expands Permanent Supportive Housing (PSH) to 365 more individuals and 110 families. It fully funds the first-year recommendations of a new strategic plan developed this year by the city’s Interagency Council on Homelessness.

PSH is for people who need long-term housing assistance with supportive services in order to stay housed. This national best practice offers affordable housing with case management services to chronically homeless individuals and families. Providing housing to chronically homeless residents allows them to focus on other challenges they face, such as mental illness, and has been shown to save money by reducing use of costly emergency services.

PSH does more than provide a home: it offers expert on-site case management services, such as life skills and job training, counseling for drug and alcohol abuse, and special services for people who are elderly, mentally disabled, or HIV positive. Chronically homeless (homeless for a year or for periods over the previous three years) individuals and families with a disabling condition are eligible for PSH, and can apply at any District shelter or homeless service provider.

As of 2009, there were 2,320 units of PSH in DC, providing 2,724 beds for individuals and 1,166 beds for families with children.

This is real money for affordable housing

This budget is somewhat of a landmark for the city, with the Mayor and Council demonstrating in real dollars a commitment to addressing the city’s growing housing affordability crisis. A recent post explains how rising demand, rising prices, shrinking supply of low-priced units, and stagnant earnings are making DC roughly half as affordable as it was 10 years ago.

It’s a big problem that requires a lot more effort. But Mayor Bowser and the DC Council deserve credit for this major step on one of the city’s most serious challenges.