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Posts about Affordable Housing


DC's Edgewood neighborhood is set to get more affordable housing and connections to the Met Branch Trail

Plans for a massive new development planned along Rhode Island Avenue NE include affordable housing, new connections to a large nearby apartment complex, and links to an important bike trail.

An elevation showing the first phase (completed, on the right) and later phases (outlined in white) of the planned Rhode Island Center development. Image by MRP Realty.

Rhode Island Center is a roughly 1,600-residential unit mixed-use development that will rise on the site of the Big Lots and Forman Mills between the Metropolitan Branch Trail and 4th Street NE.

This is the ideal transit-oriented development for the region: lots of housing, both affordable and market rate, a block from the Metro on a site that is currently a suburban-style strip mall. To top it off, it includes needed pedestrian and cycling improvements to the surrounding area.

Developer MRP Realty plans to include about 128 units in the District's Inclusionary Zoning program, build new stairways up to Edgewood Commons on the hill above it, make improvements to the MBT, install two new Capital Bikeshare docks and provide residents $225 in incentives towards alternative transportation options, like a bikeshare or carshare membership, a benefits package submitted to the DC Planning Commission on 1 August shows.

Affordable housing

The project will be built in phases, with the first two buildings fronting the MBT scheduled to open in 2019, confirms MRP's vice-president of development Michael Skena in an email. Phase one will include about 450 units, with 8%, or about 36 units, set aside for affordable housing.

Looking south at the first phase of Rhode Island Center from the MBT. Image by MRP Realty.

Half of the affordable units will be for households of four earning up to $54,300 a year, or 50% of the DC region's area median income (AMI), and half for similarly sized households earning up to $86,880, the DC Department of Housing and Community Development's (DHCD) 2016 inclusionary zoning schedule shows. Rents for two-bedroom apartments are capped at $1,222 a month and $1,955 a month, respectively, for the two income groups.

The affordable housing in Rhode Island Center's later phases will see slightly more units going to needier families, with 5% for those in the lower income bucket and 3% in the higher one.

The income levels for both the first and later phases of the development will be set if they are approved by the Zoning Commission on September 12, says Skena, even if the DC Council passes a pending change to the IZ program lowering the maximum household income level to 60% of AMI.

However, commissioners from ANC 5E, which oversees the area including Rhode Island Center, declined to support the development unless MRP includes nearly double the number of units, 14% of the total, in the IZ program at 60% of AMI, in a letter to the Planning Commission dated July 7.

While further changes to the affordable housing component in the development are possible before the September hearing, they are unlikely to include any units at the lower household income level sought by the ANC.

In July, the DHCD objected to a proposal that affordable units be available to households earning up to 60% of AMI in the Eckington Yards development. While the main objection was to a request by the developer to administer the units itself outside of the agency's IZ program, the agency emphasized a need for developers to be held to all the District's existing laws and regulations.

Current regulations require that units in the IZ program are available to households earning up to either 50% or 80% of AMI.

Stairways and connections

MRP promises to build two new stairways between Edgewood Commons and Rhode Island Center. This would provide residents of the apartment complex with a new direct connection to the MBT and Rhode Island Ave Metro station, eliminating the current about half-a-mile journey through the existing shopping center and up 4th Street.

The planned stairway connecting Edgewood Commons to the MBT. Image by MRP Realty.

The first stairway, which would be located in the northeast corner of the development adjacent to the trail, would be built with the first phase. The stairs would be closed between 1 am and 4:30 am on weekdays, and 3 am and 6:30 am on weekends.

Easier access to the Metro and trail would benefit residents of the mixed-income Edgewood Commons community. It would improve connections between the complex and the east side of the neighborhood, and potentially increase economic opportunities for residents. For example, the time it takes to walk to the shopping center with Giant Foods and Home Depot would be cut in half.

Connections to the MBT are a big part of the Rhode Island Center proposal. The central artery through the project will stretch from 4th Street NE to a new plaza where the trail and bridge to the Rhode Island Ave station meet, and include a new protected bike lane.

Looking east down the central corridor through Rhode Island Center towards the MBT. Image by MRP Realty.

The developer will realign the MBT so it passes under the stairs to the bridge to reduce pedestrian conflicts in the planned plaza, and make other signage, wayfinding, landscaping and lighting improvements.

The benefits package also includes $10,000 for the connection between the MBT and Franklin Street NE, which was included in the NoMa Business Improvement District's MBT Safety and Access Study earlier this year.

MRP will install two new bikeshare docks as part of the package. One next to the trail near the planned plaza and one on 4th Street NE between Bryant Street and Franklin Street.


How housing vouchers work, explained

Millions of Americans struggle to pay their rent each month. With rents rising and incomes stagnating, paying rent is the largest monthly expenditure for many families.

Photo by Images Money on Flickr.

Across the country, over 20 million households—more than four out of 10 renters—are rent-burdened, meaning they pay at least 30 percent of their income on rent. The share of rent-burdened households is even higher among low-income renters.

The government helps some of these low-income households pay their rent by providing vouchers through the Housing Choice Voucher Program, also known as Section 8.

The Housing Choice Voucher (HCV) Program is the largest federal program to subsidize low-income renters.

Across the country, nearly 2.2 million households receive housing vouchers to subsidize their rent. In DC, the voucher program provides assistance to 13,000 families.

There are two types of housing vouchers. Project-based vouchers are tied to a specific apartment and used by the family living there. When that family moves, the voucher stays with the unit, rather than moving with the family. Tenant-based vouchers, on the other hand, are given to a specific family. The family keeps the voucher when they move.

Because they are much more common, this explainer focuses on tenant-based vouchers in the District.

Photo by Tax Credits on Flickr.

The Housing Choice Voucher Program works by limiting the amount of their income that low-income families pay toward rent.

Voucher holders pay 30 percent of their income toward rent for an apartment on the private market. The federal government pays the rest of the rent directly to the landlord.

To be eligible to use a voucher, families typically must earn less than 50 percent of the median income in the place where they live (officially called Area Median Income, or AMI). In the Washington region, that's about $50,000 for a family of four. However, most voucher holders in the region earn less than 30 percent AMI, or about $30,000.

After securing a voucher, families are required to find an apartment—or "lease up"—within sixty days. While they search for housing like anyone else in the city, their rent must fall within the Fair Market Rent (FMR) guidelines established by the Department of Housing and Urban Development (HUD). In the District, the fair market rent for a two-bedroom apartment is $1,623. Households using a voucher can rent any apartment at (or below) that threshold.

While voucher holders are permitted to search for apartments throughout the region, in practice, they are much more likely to find affordable housing in just a handful of neighborhoods. Few apartments in wealthy neighborhoods, like Georgetown, are inexpensive enough to meet HUD guidelines, while most apartments in low-income neighborhoods, like Deanwood, rent for below the market average.

While families mostly search for housing in the region, their vouchers are portable. If a family moves from Washington, DC to Mississippi, for example, they can take their voucher with them. Critically, housing vouchers do not expire. Households can continue to use their voucher as long as they remain eligible for the program and abide by program rules.

Local public housing authorities (PHAs) distribute housing vouchers through lotteries.

In DC, the District of Columbia Housing Authority (DCHA) runs the city's voucher program. There are other public housing authorities in the region, including the Alexandria Redevelopment and Housing Authority and the Housing Authority of Prince George's County, which also administer housing vouchers.

Photo by Bill Dickinson on Flickr.

With guidance from HUD, PHAs often prioritize certain types of households in distributing vouchers. For example, a PHA can give priority to homeless households, families living in extreme poverty, or those displaced by substandard housing conditions. In DC, the housing authority gives preference to homeless families above other households needing assistance.

To distribute the limited supply of vouchers, PHAs create waitlists for eligible families. This can be an open waitlist, where families join at any time, or a closed waitlist, where the housing authority opens the waitlist for limit periods of time. At the moment, the voucher waitlist in DC is closed.

Although new vouchers are rarely allocated by Congress, vouchers do become available when existing families leave the program. PHAs use the waitlist to select new voucher holders, either by holding a voucher lottery or simply selecting the next applicant on the list.

Housing voucher programs were created in the 1970s with the dual goals of de-concentrating poverty and empowering families to pick their own neighborhood.

Until the 1970s, nearly all federal housing assistance was provided through public housing developments. However, policymakers realized that these developments concentrated poor families in certain neighborhoods. They also contributed to racial segregation in cities.

The first voucher programs were proposed in 1970 and formalized through the Housing and Community Development Act of 1974. The Act amended Section 8 of the National Housing Act of 1937 to create the voucher program. As a result, the program became known as Section 8 vouchers. In 1998, Congress passed the Quality Housing and Work Responsibility Act, which formally changed the program name to the Housing Choice Voucher Program. Housing Choice vouchers and Section 8 vouchers refer to the same program, but Housing Choice vouchers are the preferred (and correct) terminology.

By giving households an opportunity to pick their own apartment, rather than living in public housing, policymakers expect vouchers to lead people to improved housing units in better neighborhoods. Voucher holders can move away from communities of concentrated poverty and live in high-quality housing.

Photo by anaxila on Flickr.

There is substantial evidence that when low-income families move into mixed-income neighborhoods, they do benefit. For example, people are often healthier and safer in these high opportunity neighborhoods. Children attend better schools and more regularly interact with middle-class neighbors.

However, critics argue that the benefits of the voucher program are overstated. Voucher holders typically cannot move to wealthy neighborhoods because the rents are too high. Many landlords refuse to accept housing vouchers. And even when they do move into a high-opportunity neighborhood, low-income households often find it difficult to stay there.

Perhaps most importantly, critics of the voucher programs note that housing assistance is not an entitlement. Unlike other government assistance programs, like Medicaid or TANF, most eligible households do not receive a voucher. In fact, only one-quarter of households who are eligible for a voucher actually receive one.


Affordable housing agency surprises everyone by opposing more-affordable housing at one Eckington development

A large new development in Eckington will go up with fewer "deeply affordable" units than developers planned thanks to an unexpected objection from DC's Department of Housing and Community Development. The agency didn't want to have units doled out outside its existing system, even at the expense of some affordability.

Eckington Yards seen from Eckington Place NE. Image by JBG and Boundary.

At Eckington Yards, a 695-unit mixed-use development that will rise on a three-acre site stretching from Eckington Place NE to Harry Thomas Way NE in Eckington, developers JBG and Boundary wanted to offer more deeply affordable units—units for people who make well under the Area Median Income (AMI)—than what DHCD requires.

But the developer also wanted to manage the units on their own, with residents applying directly to them rather than to the agency's program.

"DHCD vigorously objects to the premise that IZ [inclusionary zoning] requirements can or should be waived," said Polly Donaldson, director of the agency, in a July 28 letter to Zoning Commission chairman Anthony Hood. "The fundamental issue before the Zoning Commission is… whether developers should be required to comport with existing law, policy and regulations."

Donaldson repeatedly emphasized that the issue was about maintaining "uniform application" of the District's affordable housing rules, and not an objection to creating more homes for lower income resident, in the letter.

In other words, the housing authority wanted JBG and Boundary to fit the affordable housing component of Eckington Yards into its existing boxes, with no exceptions.

The Eckington Yards development in relation to the surrounding buildings. Image by JBG and Boundary.

The Eckington Yards proposal

JBG and Boundary wanted to offer the 55 affordable units in Eckington Yards at 60% of AMI, which is $106,800 for the Washington DC region this year. Households that earn up to $64,080 would have been eligible for these apartments.

That proposal did not fit with the District's existing requirements that large projects make eight percent of the floor area available to people making 50% or 80% of AMI.

In her letter, Donaldson said that DHCD "strongly agrees with and supports" efforts to "provide additional affordable housing, at levels of affordability greater than the required regulations."

She pointed to other District programs, like low-income housing tax credits, that could be used to make housing in its existing IZ categories affordable at the level proposed for Eckington Yards.

DC's AMI requirements may change

Just two days before Donaldson sent her first letter to Hood, the Zoning Commission approved a change in the inclusionary zoning regulations that would lower the top household income level to 60% of AMI.

The rule change undergo a 30-day comment period and then go to the District council for a vote before it can enter into force.

Donaldson acknowledged the change, which would bring IZ requirements in line with the affordability envisioned for Eckington Yards, in her letter. However, she said that the application must be viewed under the "current versions of the IZ statute and regulations."

A compromise with less deeply affordable housing

JBG and Boundary compromised with DHCD in order to secure final approval for Eckington Yards. The Zoning Commission approved a revised proposal with the 55 affordable units split evenly between the housing authority's two IZ buckets at its meeting yesterday.

The compromise resulted in an average maximum household income of $70,590 for the affordable component of Eckington Yards, more than $6,000 higher than under the all-60% proposal.

While not a loss in the number of affordable units, it is a blow to creating more deeply affordable units in the community. Especially in a highly sought after location like Eckington Yards, which is walking distance to the NoMa-Gallaudet Metro station and adjacent to the Metropolitan Branch Trail and future large NoMa park.

Eckington Yards seen from the planned NoMa Green. Image by JBG and Boundary.


DC's affordable housing fund isn't doing enough for low-income residents, an audit says

The District's Housing Production Trust Fund is a program run by the city to fund and build affordable housing, which helps some of DC's poorest families live in one of the country's most expensive housing markets. A recent audit, however, says that too little money is going to the lowest-income residents.

Photo by Kamesg on Flickr.

Every year, the District Department of Housing and Community Development puts all of the trust fund's money into a big pot, along with other federal and local funds earmarked for affordable housing. Then it puts out requests for proposals (RFP) to build housing using the money that detail exactly how it must be spent. Non-profit and for-profit groups alike apply for and get money from the fund.

According to DCHD, almost a billion dollars has gone into the fund since 2001, leading to the construction or renovation of almost 10,000 units dedicated to housing families whose incomes can be far below average.

The city's Office of the District of Columbia Auditor recently took a look at how HPTF money has been used since it was created, and how DCHD has accounted for that spending. The report says that while a lot of money has been spent to build or renovate housing units, far less money than what is required has gone toward housing for people who can afford the least.

Far more money was supposed to go toward housing for people who earn the least

By law, at least 80% of the fund has to be spent on helping finance construction for housing that's for households earning less than half of the Area Median Income (AMI). AMI is a tool used nationwide to decide how much a family needs to make to meet requirements for subsidized housing in a given area. The AMI for a family of four in Washington in 2016 is $108,200 a year.

Within that 80% requirement, half of money spent has to go towards housing for households making less than 30% AMI (i.e. a family in Washington that only makes 30% of $108,200 in a year, or around $32,000 for a family of four) while the other half focuses on households between 31 and 50% AMI.

But in 2014 and 2015, the fund simply hasn't spent all that much on that subcategory of housing. In 2014, only 32% of the fund actually went to housing households earning 50% AMI. 2015 was a bit better at 49%, but still far below the 80% requirement.

Table from the DC Auditor.

DHCD is working to fix the problem

According the audit, DCHD has a lot of work to do to catch up and meet its goals. The report recommends that DCHD and the advisory board make up for lost time by focusing only on housing families that earn less than 50% AMI for the foreseeable future.

"DHCD should consider compensating for the loss of investment in units for households earning 0-50 percent AMI during FY 2014 and FY 2015 by focusing all available funds on those two income categories for the near future," write the auditors.

In a section of the reports for comments from DCHD, the agency says that it has already started on a plan to get things back on track, and to ensure that the right amount of money goes toward those groups: "Beginning in fiscal year 2015, [DHCD] began issuing targeted requests for proposals utilizing the Housing Production Trust Fund with a requirement that the agency will only fund new construction projects targeting households with incomes of 50% of area median income and below."

To make sure the lowest-income families keep getting the funding they need, DCHD and the Production Fund will have to keep better track of their spending and reporting to the city's oversight agencies. The audit also revealed that several key reports that are due quarterly are simply missing, and that a lot of the fund's activities were classified under a general "other" category. That makes it hard for city auditors to suss out what money goes where.

The Housing Production Trust Fund is an important tool for the city to keep some of its housing affordable for individuals and families struggling with high housing costs in Washington. And after nearly being cut away to nothing in 2012, the fund saw a big infusion of nearly $100 million dollars during last year's budget process.

But all the money in the world doesn't matter if it doesn't get to the people who are supposed to be the beneficiaries. So now its up to the city's workers and elected officials to work together to fulfill the Housing Production Trust Fund's promise.


Can anyone build affordable housing without public money?

The US has less affordable housing than it needs, and that's because of a fundamental problem: the cost of building and operating affordable units adds up to more than what those units bring in in rent. The Urban Institute launched a tool that illustrates this problem first-hand.

The tool, which uses housing data from the Denver area, summarizes the affordable housing problem while explaining the associated layers and technical terms in an intuitive, easy-to-understand manner. At the bottom right, you see a theoretical development whose cost changes based on the variables you, the theoretical developer, are facing.

The unsustainable math behind developing affordable housing

There are many costs that go into building affordable housing units. In developer speak, these costs are referred to as "uses." Uses include the cost of purchasing the land itself, the cost of construction, and future operating expenses (such as hiring and paying building staff), among other things.

How do developers cover these costs? The uses are funded through various sources such as debt (taking out a loan) and tax credits. However, there are limiting factors when it comes to both of these.

When developers go to take out a loan, the amount they get and the interest they pay is determined based on projections for how much revenue a building's rent will generate. But it can be tough to predict whether or not a building could wind up being vacant, or for how long. Obviously, if nobody is paying rent on a building a loan helped build, the lender is not going to be happy.

Tax credits can also help developers. There are variables involved in determining the amount of tax credit a builder is eligible for, such as the cost of land and rent prices. Even if a developer is eligible to receive tax credits, there's no guarantee they'll actually receive them because the funds are limited at the national, state, and local level.

Closing the gap

To close the gap between the cost of developing affordable housing and the revenue it generates, why don't developers just apply for bigger loans, increase the amount of units in a building (generating higher rental revenue as a result), or charge more for rent?

As described above, lenders determine the loan amount based on projected revenue, and for affordable housing, that revenue is low by its very nature. Building more unites would also means needing to make sure more unites are filled, and charging more for rent defeats the entire purpose of affordable housing to begin with.

The bottom line is that subsidies are the only way to close the gap between cost and revenue; they're the only way to build enough affordable housing. Such subsidies can come in varying forms, such as vouchers, more tax credits, and grants.

Emily Badger at the Washington Post sums it up pretty well:

To the extent that government should step in when the private market can't, affordable housing is a prime example. The larger problem, though, is that we hardly devote the kind of public resources to this market failure that it demands.


Housing beats out office space in NoMa, which could mean more affordable units

A development in NoMa called Washington Gateway could bring 30 new affordable units to the area. They'd be part of a larger proposal to change course away from building office space and toward building residential units.

A rendering of the planned North Tower in Washington Gateway from the New York Avenue bridge. Image by MRP Realty.

Washington Gateway is the first major development in NoMa that you see if you come over the New York Avenue bridge on your way into the the District. Located on a triangular lot between New York Avenue NE, Florida Avenue and the Metropolitan Branch Trail (MBT), the first tower of the eventually three-tower mixed-use development, the Elevation, opened in 2014.

The Washington Gateway site, the location of the North and South towers is highlighted in red. Image by MRP Realty.

Developer MRP Realty is now seeking DC Zoning Commission approval to build the planned North Tower as a residential building instead of offices, and for the option to convert the planned South Tower to residential in the future.

The 16-story North Tower, which would front New York Avenue, would include about 372 units under the revised plan, the developer says in its latest filing with the zoning commission on 18 July.

MRP would designate 8% of those units for households with incomes up to 80% of area median income (AMI), or about $87,300 based on the AMI number for 2015.

While not a large increase in the number of affordable units to the area, the developer rightfully points out that none would be created if the tower were an office building.

When asked whether MRP had considered the impact of offering the units at 60% AMI at an Eckington Civic Association meeting in May, representatives of the developer said they had not looked at the "economics" such a move.

Housing is in demand in NoMa

Housing is hot in NoMa. The population of the NoMa Business Improvement District (BID), which includes Washington Gateway, grew to more than 6,000 people at the end of 2015. This represents a compound annual growth rate of more than 30% since 2008.

MRP says its 400-unit Elevation was fully leased within 11 months of opening in 2014 and remains fully leased with regular turnover, in its filing.

This is in contrast to office space in NoMa. The vacancy rate stood at 14.8% at the end of June, higher than for offices in any other neighborhood in the District, a second quarter market report by real estate firm Colliers International shows.

This is evident to anyone who has regularly waited for a train at the NoMa-Gallaudet Metro station, where riders have had a view of unfinished, empty office space immediately adjacent to the station and MBT for the past few years.

MRP still plans to build some offices, maybe. The 13-story South Tower is still planned as an office building, however, the developer says it may change this building to residential in the future as well.

Rendering of Washington Gateway looking from across Florida Avenue NE with with the planned South Tower on the right. Image by MRP Realty.


DC makes some of its affordable housing serve less wealthy residents (but not the poorest)

DC requires new apartment and condo buildings to include a number of affordable housing units, in a program called Inclusionary Zoning. Wednesday night, DC's Zoning Commission voted to make Inclusionary Zoning serve the group of residents who most need the housing this program can provide.

Photo by Ryan McKnight on Flickr.

What is inclusionary zoning?

Inclusionary Zoning (IZ) is a market-based tool for creating affordable housing that serves people of moderate incomes. Private developers still build housing as they wish, but have to rent or sell a small percentage of units to people making less money. It's had some success, but debate about the program continues.

IZ proposes to diversify our region's housing stock. In a high-demand area like ours, the market will naturally provide more expensive housing for higher-income people rather than cheaper housing. This is not a simple case of developer greed. The owner of a piece of property in a desirable, expensive area will want to sell it to whoever will give them the most money. If one group offers the land owner more money for the land (because they plan to build and sell luxury units), that group probably wins the sale over other groups looking to build moderately priced housing, or who want to use tax credits to build below-market housing.

Right now, in DC, many people who use tax credits to build lower-income housing can't win the bidding for enough land to build on. Where land is cheap, there is enough to go around for people to build units with diverse cost and meet diverse demand, though even then, without tax credits they can't sell units for less than it costs to construct them. But where land is scarce and demand is high, the market, on its own, won't provide housing for even moderate-income people.

Photo by Sharron on Flickr.

IZ tackles affordability and supply

When I walk around town talking about our region's housing shortage, many stop me and say, "What do you mean?! What about all of those luxury apartments and condos going up EVERYWHERE?" Land values explain a piece of that. Yes, we are building more housing than most other periods of DC's history, but there is a lot of pent up demand for housing at different cost levels that currently isn't being met.

Say I want to build a 5-story building with 50 units in it. To buy the land, get financing, and cover construction costs, I have to plan to rent the units at luxury prices. IZ changes two things. First, it forces me to build a number of units for people at lower incomes. That increases costs and could make my building unprofitable to construct, so IZ sweetens the deal: I can build my building higher and denser than normally allowed (about 20% larger, though it varies by zone).

When it's all said and done, my new plan after IZ is a 6-story building, and 5 of those 60 units are going to be rented at more affordable levels.

It's a compromise, yes. But is also unique in that it addresses the issue of housing supply (we just added 10 more units to the region!), as well as housing affordability (we just built 5 otherwise non-existent affordable options).

Other reasons IZ is exciting

The fact that IZ tackles our housing shortage from both a supply and affordability standpoint is one reason why advocates are for this policy tool, but there are other good things about it.

For one, if we are serious about building an inclusive city and region, this tool helps to do just that. People of different incomes can live (and afford to live!) in the same buildings and neighborhoods when IZ is applied well.

Recent studies by Raj Chetty and Eric Chyn show that low-income children who grow up in mixed-income neighborhoods make more money throughout life—16%, in Chyn's study—than those in entirely low-income areas. Keeping poverty concentrated is a recipe for more poverty, while mixed-income living (which IZ pushes) could show a way out.

Another reason to like IZ is that it leverages the resources, knowledge and power of the private sector. There is an immense amount of money and expertise in the development field, and they are very interested in building more housing. IZ attempts to align for-profit development interests (build more) with broader community interests (build affordable), and advocates hope to harness the productive energy and capacity of the development field to meet the needs of a diverse and growing city.

Photo by Tim Evanson on Flickr.

Spoiler alert: Not everyone is a fan of IZ

IZ offers both extra density (more money for property owners) and an expensive housing requirement (forced affordability constraints). Depending on the details of the program and the particular neighborhood or market conditions, the bonus could pay for the added expense, or not.

Further, IZ creates bureaucratic hurdles for the developer to go through. The process, paperwork, and the many legal and other experts required can add costs.

The early years of DC's IZ program saw problems with how the government was implementing it, including federal rules which made it impossible for buyers of IZ condo units to obtain mortgages. (DC changed the rules to deal with that obstacle.)

It's not just the developers

Developers are not alone in their criticisms of IZ. Some other affordable housing and low-income advocates are concerned about the program.

For some, it is simply a question of scale. Even in the hypothetical situation above, you can see this argument play out: we get 55 units of luxury housing, and 5 units of more affordable housing? For some that is simply not good enough, especially if there is a tool that would allow the original 50 units to be all affordable, or some significant percentage affordable.

Over that last few years since its inception in DC, IZ has created over 900 below-market price housing units, which is great. It's also true that in that same amount of time 21,000 total units have been created, and as noted earlier in my street conversations, many, many of those units are at luxury prices.

Map of IZ Production under old rules

Another concern some have about IZ is that it does not create "affordable enough" units. IZ laws mandate that a unit be affordable for people making a certain amount of money based on the Area Median Income (AMI). DC's current rules require some units at 80% of AMI and some at 50% of AMI, but the vast majority were 80%.

For a typical one-bedroom unit, an 80% AMI unit would rent for around $1,600 a month, while 60% would be around $1,100 a month. For many groups working alongside the poorest of our community (for example those making 30% or less of AMI), this does not serve the people in greatest need.

It's unlikely that IZ can create units at 30% of AMI, since those are so expensive to create and maintain compared to 50-80%. So IZ advocates mounted a campaign to create more deeply affordable units than before.

What has changed

This new change now requires all new rental units to be 60% of AMI (while condo units would be 80%). Currently, most new rental units being built were at 80%, but three-fourths of people on waiting lists for IZ units were around 60%.

Members of the Zoning Commission recognized that this was not serving the needs of many lower-income residents. During one hearing, Commissioner Michael Turnbull remarked, "[80% median family income] is basically market rate. People are saying, we can't afford that. The city is being gentrified. The people who grew up in the city are being kicked out." Commissioner Peter May agreed: "The house is on fire, and we are using a garden hose."

Yet there was opposition from the Bowser administration and the DC Building Industry Association to the proposal to lower the income targeting percentage to 60%. They put forth an alternative proposal. Under current rules, not all zones in DC have to incorporate IZ; the alternate option would add IZ to four zones (two of which, C2A and C2B, have some significant development potential, and two, SP1 and W2, that have very little) while keeping other zones as they have been.

Late Wednesday night, the Zoning Commission voted in favor of the 60% requirement. There will then be a 30-day period of public review before a second, final vote. For many of the thousands of residents who apply for the lottery to get access to these units each year, this drop will add greatly to their affordable options.

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