How to Change Mayor Gray’s Plans for DC’s $140 Million Surplus

As I wrote a couple of weeks ago, the Chief Financial Officer for the District of Columbia expects that revenues for the just-ended fiscal year will be about $140 million higher than he earlier projected.

Mayor Gray has said that the whole $140 million should go into a reserve account. That’s what the law requires, but perhaps only if he sits on his hands.

As things stand now, he may because he’s put a top priority on building up savings — already totaling $1.1 billion — so that the District’s got a big stash it could use for some future emergency.

We’ve got emergencies staring us in the face. And if the CFO had projected the surplus earlier, the extra funds would have been used to address those that the Mayor and DC Council agreed were most urgent.

That’s also the law — specifically, the Fiscal Year 2013 Budget Support Act, which includes a list of programs that would get more funding (and the amounts they’d get) if revenue projections before the tail end of the fiscal year indicated that the needed revenues were available.

Top of the list is $7 million to make up for federal funds that the District had used for homeless services, but didn’t expect to have in this new fiscal year.

Next on the list are funds for the Temporary Assistance for Needy Families program.

Some would provide more money for job training, counseling and other services participating parents need. Another portion would delay until next October the cuts in benefits for families who’ve been in the program for more than five years.

These families surely ought to have a chance to benefit from the improved training, counseling, etc. before they’re penalized for not finding work that pays enough to lift them above the TANF income eligibility ceiling.

Also near the top of the list are funds to partly restore those that the Mayor, with the Council’s approval, shifted out of the Housing Production Trust Fund — the main source of local funding for creating and preserving affordable housing here.

So the (relative) well-being of thousands of District residents hinges on a legal technicality. The Mayor could easily resolve it by asking the Council for a one-time, partial exception to the use of end-of-year surplus revenues.

Or the Mayor and Council might find funds for the top-of-list priorities elsewhere. Councilmember Jim Graham, after all, found $14 million in unspent child welfare funds. The audits that are always done at the end of a fiscal year may well turn up more unspent funds.

The source doesn’t matter. A firm commitment to fund these priorities does — and a commitment not to have funding for basic human needs like shelter, housing and cash for kids’ clothes on some extra revenue “wish list” in the future.

Or, for that matter, adequate funding for other anti-poverty programs like relevant job training and supportive services, e.g., affordable, high-quality child care, mental health counseling.

Which is why we need to exert some grassroots pressure on the Mayor and Council.

The Fair Budget Coalition has an editable e-mail we can send to let them know that we want some portion of the surplus spent on the top priorities — and longer-term commitments that ensure we don’t keep having these preventable emergencies.

As I remarked before, the Mayor and Council could fund the priorities and still have plenty of surplus revenues to put in the bank. Their choice, but we can help them make it.

What Lies Behind the Plan to Close DC’s Housing Assistance Waiting List?

A small piece of news buried deep in the avalanche of last week’s debate commentary: The DC Housing Authority says it may close its waiting list.

In other words, it will stop adding names to its registry of low-income people who’ve asked for, but haven’t gotten admission to public housing or a voucher that subsidizes the costs of market-based rents.

DCHA has more than 8,000 public housing units and some 12,000* vouchers — most, though not all of them issued.

More than 67,000 households are on the waiting list. So it’s pretty clear that most of them will stay there until DCHA decides they’re not eligible any more, takes them off the list because they don’t communicate otherwise — or die of old age.

I’m not kidding about this last. A local homeless woman interviewed a few years ago said she knew people who’d signed up for housing assistance when they were young and were grandparents now, still waiting.

DCHA says it’s a waste of resources to maintain a waiting list that’s so unrealistically long. Also that it has to “increase transparency, … manage expectations, … and increase choice.” Choice apparently of something it can’t provide.

The Director of Bread for the City’s legal clinic says it should keep the list open to demonstrate “the crushing need for affordable housing in this city.”

It’s certainly true that the waiting list has often been cited by advocates for more local affordable housing funding. Problem is that demonstrating need doesn’t seem to be getting us anywhere close to where we need to be.

On the contrary. The Gray administration seems to want to get out of the affordable housing business.

I’ve thought this ever since the Mayor’s first budget covered the costs of locally-funded housing vouchers in current use by shifting money out of the Housing Production Trust Fund — the District’s main source of public funding for affordable housing construction, renovation and preservation.

Thought it again this year, when he tried to make a further cut in the Production Trust Fund and to let the Local Rent Supplement Program, i.e., the source of locally-funded vouchers, wither away — just as he had in 2011.

An unnamed affordable housing advocate has arrived at a similar conclusion.

The Gray administration, s/he told Washington City Paper reporter Aaron Wiener, “doesn’t believe it should fund long-term affordable housing.” It’s decided to tackle the affordable housing shortage by increasing income instead.

It’s absurd to think — and I doubt the Mayor does — that his strategies for growing the economy and preparing residents to fill the jobs it creates can boost the incomes of most of those on the waiting list so much that they can afford the very high costs of housing here.

He nevertheless has injected a “demand side” component into the deliberations of his Comprehensive Housing Strategy Task Force and appointed members who will shape its recommendations accordingly.

In other words, he’s looking for solutions that will reduce need at least as much as increase supply — preferably more.

Perhaps also, in some manner, redefine need. The Housing Authority’s executive director, for example, says she’s working on initiatives that will persuade low-income people to give up their subsidies, notwithstanding their fears of illness, job losses, etc.

Surely no one would quarrel with strategies to improve the financial circumstances of the District’s low-income population.

And no one, I hope, would underestimate the affordable housing problems the Gray administration faces — some inherited, some of its own making and most magnified by the cumulative impacts of inadequate federal support.

But it’s hard not to feel that the Mayor’s much more interested in building a high-tech, green economy — and making the city a congenial living place for the high-earning taxpayers it will employ — than in addressing the struggles of the folks on the waiting list.

His policies didn’t create the inordinately long housing assistance waiting list. But they will contribute to its growth — if DCHA doesn’t close it.

* This number represents only vouchers households can take into the rental market. DCHA also issues vouchers to developers, nonprofit housing operators and other landlords, which they then attach to specific housing units.

DC Fails Homelessness Test

Speak for We blogger Michael Dahl recaps a bit of his experience as a long-time advocate for better homelessness and affordable housing policies in Minnesota.

Over the years, he says, homelessness advocates have given top priority to diverse strategies — prevention, supportive housing, rapid re-housing, etc.

He sees a consistent thread in three elements. They aren’t actually common elements in the strategies, however. They’re questions that policymakers and other stakeholders should ask when they decide what their community needs by way of a homelessness system.

They’re painfully apt here in the District of Columbia as the DC Council considers the Mayor’s proposed Fiscal Year 2013 budget.

So here they are (with some minor edits):

• Do we have enough affordable housing?
• Do we have jobs in the community that pay for housing here?
• Do the supports that we rely on when we fall on hard times, e.g., a job loss, poor health, work for our lowest income residents?

These components, Dahl says, “provide stability and a pretty sturdy safety net.” If they’re all in place, the number of homeless people will be small, and the time they spend homeless will usually be short.

If they’re not in place, then “you need a homeless system to pick up the slack.”

Well, the District surely doesn’t have enough affordable housing.

The DC Fiscal Policy Institute took a close look at the situation two years ago. It found that the market had lost 23,700 low-cost rental units between 2000 and 2007 — more than a third of the stock.

Two in every five households were spending more for housing than they could afford, based on the standard 30% of income. Nearly three in five of poor and near-poor households paid at least half their income for a roof over their heads.

We’ve good reasons to believe that the situation has gotten worse. Rental costs have risen. More affordable units have been converted to upscale rentals or condos. More may have fallen into such disrepair as to be uninhabitable — victims of a combination of forces, including the recession.

The Housing Production Trust Fund — the District’s main tool for supporting affordable housing development and preservation — suffered losses when property sales slowed and prices dropped.

Then the Fund was raided to shore up the Local Rent Supplement Program — the District’s locally-funded voucher program. And now the Mayor proposes another raid, leaving the Fund with enough to support only 170 new units next year.

This second fund shift to LRSP would cover the projected costs of all existing vouchers, but no additional vouchers for people who are homeless — or may become homeless in months to come.

Whether the District will be able to renew all federally-funded vouchers is anybody’s guess.

The District does have jobs that pay for local housing, but not nearly all residents have them.

The local unemployment rate seems stuck at 9.8% — and that’s only residents who are actively looking for work. The latest rates for Wards 7 and 8 are 16.3% and 24.3%.

The average income of the poorest fifth of D.C. households was just $9,100 in 2010 — about $4,770 less than the annual rental cost of a modest efficiency unit then.

Even if the District prepares more residents for living wage jobs — and cracks down on enforcement of its living wage law — housing will remain unaffordable for a substantial number of workers.

At the current living wage rate, they’d have to pay more than half their income for rent on that efficiency, assuming they work full-time, year round.

Our safety net is far from sturdy for our lowest income residents.

They can get health care through Medicaid or the DC HealthCare Alliance, though those in the latter might lose essential services if the Council goes along with the Mayor’s savings plan.

Unemployment benefits are available for some, though far from all residents who lose their jobs. But they’ll be cut off sooner due to changes in federal law.

For families with children, we have the Temporary Assistance for Needy Families Program. But cash benefits are way too low to cover the cost of unsubsidized housing. The maximum cash benefit for a family of three — currently $428 a month — is less than 37% of what the efficiency unit costs.

This is true, however, only for a family that’s been in the program for less than 60 months. For a family that’s been in longer, the benefit is only $257 a month. And the Mayor’s proposed budget would reinstate further cuts that the Council wisely deferred last year.

So it would seem that we truly do need a robust homeless services program. Under the Mayor’s budget, it would have $7 million less than last year.

And it already lacks funds to provide homeless families with shelter or other housing now that the winter season is officially over.

In short, the District fails Dahl’s test on both counts. Not enough stability or safety net support. Not enough in homeless services to pick up the slack either.

New DC Rental Cost Figures Show Need for More Affordable Housing Investment

“How expensive is D.C. for renters?” a recent headline on DCentric asks.

The short answer from the latest report by the National Low Income Housing Coalition is “very” — more expensive, in fact, than only a year ago.

As the DC Council decides what to do with Mayor Gray’s proposed budget, it should ask whether a $19.9 million cut to the Housing Production Trust Fund will get us to that One City the Mayor is so fond of talking about.

Or will it instead drive up the already-high family homelessness rate — and leave even more families choosing between rent and other basic needs? A rhetorical question I know.

So let’s turn to the report.

How NLIHC Calculates Affordability

NLIHC uses several sets of figures to assess rental housing (un)affordability nationwide and for states, counties and major metropolitan areas.

The first set is the U.S. Department of Housing and Urban Development’s fair market rents for two-bedroom apartment units — those in either the 40th or 50th percentile of all reasonably well-maintained units in the area, basic utilities included.

The second figure is the standard 30% of income that both government agencies and analysts use to determine whether housing is affordable for a particular household or group of households.

NLIHC also uses figures from other federal sources to estimate the average local wage for renters — obviously important when the issue is whether rents are affordable.

What We Learn About Rental Housing Affordability in the District

No surprise to learn that rental costs in the District are rising, but so is average income. Not enough for renters, however.

• The 2012 FMR for a two-bedroom apartment in the District was $1,506 per month — $90 more than in 2011.
• A household would have had to earn $60,240 a year for the apartment to be affordable — $1,800 more than the year before.
• This translates into an hourly wage of $28.96, assuming full-time, year round work — $3.79 more than the estimated average for D.C. renters.
• Renters earning the average — $25.17 an hour — would thus have paid $2,364 more per year for the apartment than they could afford.

Things get worse, of course, for poor and near-poor residents.

• For what HUD defines as extremely low-income renters, i.e. those earning 30% of the median for the area, the two-bedroom apartment cost $700 more than they could afford.
• The hourly wage that would have made it affordable is three and a half times what a full-time, year round minimum wage worker earns.
• Looked at another way, the minimum wage worker would have had to put in 140 hours every week or live with another full-time minimum wage worker and a third who worked half-time.
• Because the minimum wage remained flat while the two-bedroom FMR rose, the apartment was over $1,000 further out of reach than it was only the year before.
• What would be affordable for the minimum wage worker is an apartment costing no more than $429 a month — about 37% of the current FMR for an efficiency in the D.C. area.
• For residents dependent on Supplemental Security Income, any FMR unit is even more absurdly out of reach because the most they could afford is $209 a month.

Rent’s Too Damn High. But Why?

What’s happening here is basically what’s happening nationwide — less supply and more demand. And, as always, growing demand for a shrinking supply drives prices up.

On the supply side, affordable rental units are disappearing. This is a long-term trend, as the Harvard Joint Center for Housing Studies has shown.

Many low-cost units are being converted to upscale rentals or condos. Others stand empty — or have already been razed — because their owners didn’t maintain them.

Meanwhile, for various reasons, publicly-subsidized low-cost units are going-going-gone — 150,000 lost in the last 15 years, says HUD Secretary Shaun Donovan.

At the same time, more households are seeking rental housing.

The recession and related foreclosure crisis are partly responsible for this. They’ve driven more households into the rental market. Other households are staying there because they’re leery of buying — or unable to get credit because lenders have become leery too.

Needless to say, the recession has also pushed many more households into the low-income category. They’re now more than a quarter of all renter households.

What Now?

Public policies have helped create the affordable housing crisis for low-income — and even not-so-low-income — renters. Public policies will have to help solve it.

Growing the economy — even if combined with policies and programs that get more workers into so-called living wage jobs — won’t be enough.

Policymakers, including our own Mayor and DC Council, have to invest in creating and preserving housing that’s affordable for low-income people.

The Mayor doesn’t have to wait for a report from his Comprehensive Housing Task Force to know that. Nor does the Council.