D.C. Faces Affordable Housing Crisis

D.C. Faces Affordable Housing Crisis
by Janet Welsh Brown

May 2001
Volume 38, No. 4

The growing shortage of affordable housing has finally become a political issue in D.C. Recent community events-the March 26 dialogue "D.C. Development for Whom?," the April 10 "Peoples' Hearing on Affordable Housing," an April 12 WAMU Community Forum in Ward 1, and formation of an Affordable Housing Committee by the D.C. League of Women Voters-have added many different voices to the demand for quality affordable housing.

On April 10, two hundred residents attended the Peoples' Hearing on Affordable Housing to hear more than twenty-five tenants from all over the city describe their housing problems and tell officials what they need from the city. Some tenants were angry, some scared as they stood before the cameras, reporters, and officials in this first public hearing organized exclusively for tenants by the D.C. Coalition for Housing Justice and Washington Inner-City Self Help (WISH) in the packed John Wesley AME Zion Church hall.

The complaints heard most often were about the city's lack of responsiveness-to neglect of buildings, on code enforcement, tenants being over-charged for "improvements," and the hurdles in front of tenants trying to buy their own buildings-and above all, the rising cost of housing. After three hours of tenant "testimony," Council Members Jim Graham (Ward One) and Adrian Fenty (Ward Four) and housing officials responded. All acknowledged the seriousness of the problems and made promises.

The affordable housing crisis in the city cuts across a wide range of incomes. Among the 60% of D.C. residents who live in rental housing, even middle class families are feeling the pressure as the real estate boom puts heavy demands on existing housing. But it is the low-income renters-including many poor parents working more than one low-wage job, seniors, disabled, and immigrants-whose homes are in jeopardy. There is a growing gap between income and rents and an increase in homelessness.

At the same time, the supply of affordable homes is leaching away. Almost no new low- and moderate-income rental housing has been built in a generation. Long-standing landlord negligence and poor code enforcement have led to closing some buildings and to evictions. Row houses that have housed two and three families have been bought and rebuilt as luxury homes.

Section 8 expirations (apartment buildings built 20 years ago with HUD money and contracted to provide low- and moderate cost homes) could result in the conversion of thousands of units to market price in the next three years.

Decrepit, dangerous old public housing projects are being slowly replaced with great new mixed-income developments, but this traditional source of low-income apartments is not being replaced unit for unit. Displaced families are provided with vouchers to supplement rents in the private sector, but that housing is hard to find, and meanwhile the waiting list for eligible families is three years.

Even in rent-controlled buildings affordable units are lost every time a long-term tenant moves out and the rents double as landlords are allowed to realize caps. Federal money for new housing is mostly for programs that help working families purchase their own homes. It is widely believed among policy-makers that home-ownership is the answer-almost as if renters weren't also good citizens who contribute to the community...

So our city, like many urban centers around the country, faces a dilemma: How can the local government finance homes and schools and health services that working families require without enticing high income residents and new profitable businesses into the city to build the tax base that must pay for it all? So far in the District, the national economy, the desire to escape long hard commutes to city jobs, the rediscovered pleasures of diverse downtown life, and the policies of the Mayor seem to have favored building the tax base first-later, we have to hope, will come the houses, schools, and services.

In early April, both the Mayor and Council Member David Catania (At-Large) introduced housing legislation to provide "housing for all." Their proposals represent a recognition of the problem and first steps in the right direction.

The Mayor's complex package includes a variety of moves to condemn and acquire derelict buildings, revise building codes to facilitate the rehabilitation of old buildings, provide increases in the homestead program and help for low- and moderate-income owners to preserve historic residences. And there would be modest tax relief for owners who have lived in their homes for ten years or more. But the most important proposals that would begin to build back the supply of affordable rental housing are the Housing Production Trust Fund and Section 8 (Title V and Title II), and both will require strengthening by the Council in the legislative process.

Mayor Williams correctly identifies the Trust Fund as the most important vehicle for producing new affordable rental housing and rehabilitating Section 8 housing by owner-tenants. He would endow the Fund with $25 million from the Newseum deal and replenish it annually with 15% of the real estate transfer tax and 15% of the deed recordation fees (a total of $10-12 million a year). That would be augmented by contributions from developers. He's on the right track, but the kitty needs to be bigger and the source of funds dedicated, i.e., 15% of these taxes and fees this year, 30% in FY2003, and 50% in FY2004. Thirty years of experience with more than a hundred housing trusts across the country demonstrates the need for a steady stream of dedicated public funds. Neither the federal government nor the private sector is going to solve this problem for us.

The Fund's legislation also needs to express a clear priority for rental housing, establish a regime for full disclosure of the expenditures, and set up an over-sight board to help protect the Fund against raiders. (It is not a coincidence that this fund has been in existence for years with no money in it!)

Very important also is the Mayor's wish to get private builders to include 10-20% of affordable units in their market-rate development projects, by giving them tax breaks (Title VI). But I worry that the Mayor and Council Members are already too generous with tax cuts and credits that reduce the city's limited revenues that are so badly need for education and health care. So we recommend that inclusion of affordable units be mandatory for all builders in all parts of the city, and that they be compensated by extra zoning benefits-as in Montgomery County-rather than by tax credits.

Keeping Section 8 buildings affordable after expiration of their contracts is also very important because if represents such a large portion of our low-income housing supply. For addressing this problem, however, Council Member Catania's proposal to motivate owners with tax relief is preferable to the Mayor's bill which would do little more than increase the notice that landlords are required to give tenants if they are not renewing their contracts or are selling their buildings.

Recent tenant experience in Columbia Heights demonstrates that tenants who want to buy their buildings need more time to get it together and much more legal, organizational, technical, and financial assistance than the city and voluntary organizations can now offer. Councilmember Catania's proposal would motivate some owners to renew their contracts with the city and help some tenants stay in their homes and in their neighborhoods-while the city improves its ability to help tenants purchase their buildings. But the proposal will work only if the city keeps right on top of property assessments, so that gentrified buildings do pay taxes that realistically reflect their new market value. Given the current uproar about increased tax bills and annual assessments, that may not fly either.

There's still lots of work to be done on both legislation and financing for affordable housing. For further details and recommendations on the proposed legislation, contact the Washington Regional Network for Livable Communties, statt@washingtonregion.net or (202) 667-5445, the Coalition for Nonprofit Housing and Economic Development, bpohlman@CNHED.org, or the Washington Legal Clinic for the Homeless, washlch@erols.com.

Janet Welsh Brown is a board member fo the Washington Regional Network for Livable Communities. Linda Leaks is Interim Director of Washington Inner-City Self-Help (WISH).