New Hope for Poor Families Stuck in High-Poverty Neighborhoods

July 7, 2016

The U.S. Department of Housing and Urban Development has tried for some time to get more poor families out of poor neighborhoods and into those with better opportunities for work, a decent education and the like.

Now it’s proposed a rule that would go further — and at the same time, probably make more housing more affordable in neighborhoods that will remain high-poverty, at least for now.

The proposal builds on a pilot that addresses a fundamental problem with the way HUD effectively caps rents for households with Housing Choice vouchers.

What HUD Does to Set Maximum Rents

Setting the maximum rents for units vouchers will subsidize is a two-step process — and more complex than I think one needs to understand in order to grasp either the problem or the solution.

Basically, HUD sets fair market rents based on what renters who recently moved in pay for decent, modestly-priced housing units. One FMR for a no-bedroom unit, another for a one-bedroom unit and so forth.

The FMRs reflect these rents throughout a metropolitan area the federal government has carved out based on how far workers commute to and from their jobs. These are, for the most part, counties, though some housing markets HUD defines are broader.

Local housing authorities then use the FMRs to set maximum rents that vouchers will subsidize. They’ve got some flexibility, but within a fairly narrow band defined by the FMRs for the market they operate in.

How the FMRs Limit Housing Choice

Housing markets may encompass neighborhoods with widely varying rents, as anyone who’s looked for a unit in a city or nearby suburb knows.

The high-rent neighborhoods are, of course, those with so-called amenities that better-off households can and will pay for, e.g., good schools, convenient public transportation, nearby grocery stores, relative safety on the streets.

The low-rent neighborhoods contrariwise. So they’re typically where most poor and near-poor families perforce live, including those with vouchers.

HUD boosts the FMRs when very few neighborhoods are home to unusually high numbers of voucher holders because so few units meet the regular FMR-based payment standards in the rest.

But the FMRs still apply to the entire metro area. The boost merely uses the median rents for the area, rather than the 40th percentile. So families with vouchers are still priced out of many high-opportunity neighborhoods, as HUD (and others) call them.

At the same time, landlords in low-opportunity neighborhoods charge more than they otherwise could because the FMR-based payment standards will cover higher rents than they could get on the open market.

They also have an insurance, of sorts, that they’ll get regularly paid at least a goodly portion of what’s owed. So they recruit voucher holders, an in-depth study of tenant “sorting” in Baltimore suggests.

That, of course, reduces housing choice for the majority of low-income people, since fewer than one in four households have vouchers. They must rent units that don’t meet the safety and other qualify standards public housing authorities require, pay far more than they can afford or both.

The perverse incentives built into Housing Choice help account for the high concentrations of poor and near-poor people in poor neighborhoods — and, not coincidentally, for persistent housing segregation, as the Baltimore researcher explains.

How HUD Plans to Change FMRs

The rule HUD proposes would make rent caps much more sensitive to rental costs in metro areas that meet certain criteria — ballparked by HUD at thirty-one.

It would set small area FMRs — specifically, one for each zip code within the select metro areas. So families would get higher subsidies if they found landlords that would rent to them in better neighborhoods.

And landlords couldn’t charge as much in high-poverty neighborhoods. This would not only reap savings to partly offset the costs of vouchers in high-opportunity neighborhoods. It would also probably make more units more affordable for poor and near-poor families without them.

What Will Probably Happen and What Should

The period for public comments on the proposed rule just ended. We’ll probably see a final rule before year’s end — in part to amplify the HUD Secretary’s legacy of efforts to fulfill the promise of the Fair Housing Act.

Like that promise itself, the promise of more choice for Housing Choice voucher holders will become a reality only if the next administration doesn’t backtrack — and then only if local housing authorities act affirmatively.

It’s one thing to adjust rent caps, quite another to make sure that families understand the new opportunities they have — and to help them find places to rent in neighborhoods unfamiliar to them.

That will require, among other things, persuading landlords to accept them as tenants when they can’t jack up their rents, as landlords in high-poverty neighborhoods have.

Even in the best of cases, the small area FMRs will be only one better tool in the affordable housing toolkit. We’ll still need more funding to help finance the construction of more affordable housing — and preservation of what already exists. We’ll need zoning to support both.

We’ll need more funding for housing vouchers too, of course. Because, as things stand now, we’ve got some 7.2 million households whose choice is whether to stave off eviction by paying more than half their income for rent or to have food on the table till they’re kicked out.

 


Aging in Place a Challenge for Low-Income Seniors, If They Still Have a Place

June 16, 2016

Looking back to Older Americans Month, I seized on one hardship that too many of the celebrated suffer — food insecurity and outright malnutrition.

That’s not the only reason why the so-called golden years aren’t so golden for a lot of seniors. Another that looms even larger is unaffordable (or no) housing.

Acute Affordable Housing Shortage

Last month brought us a new report from the Bipartisan Policy Center’s Senior Health and Housing Task Force. As you’d guess, it focuses on the urgent need for more affordable housing suitable for seniors and the implications for their health and our country’s healthcare system.

We know, of course, about the shortage of housing that the lowest-income renters can afford. There were about 11.3 million of them in 2013, including 2.6 million elderly singles or couples. The market lacked about 6.9 million units that were both affordable and available to rent.

But not all those units would suit the needs of seniors who’ve developed (or always had) difficulties moving around without walkers or wheelchairs.

Only 3.8% of all housing units in the country have design features to accommodate moderate mobility limitations, the task force co-chairs say. These, note, are not necessarily affordable for lower-income people or available for anybody to buy or rent.

Higher-income people can afford to have features in their homes modified, e.g., doors widened, ramps built. They can have doorknobs and turn-on faucets replaced with levers if their hands have weakened or stiffened.

Or they can move to an apartment that has such features — even, if they choose, an assisted living facility where they can age in place, with increasing services as they need them. About 70% ultimately will for even such basic daily tasks as bathing, dressing and taking prescribed medications.

But an estimated 1.8 million seniors paid more than half their income for rent two years ago — an upward trend that’s unlikely to turn around on its own.

They’re already short on money for food, transportation and their share of medical costs — an especially big bite of the budget, as we can see from how they boost the more accurate senior poverty rate.

Seems the crunch will worsen as more people live long enough to become seniors — and longer thereafter. An estimated 1.8 million more senior households — a total of 6.5 million — will have less than $15,000 a year to live on by 2024, the Harvard Joint Center on Housing Studies reports.

The Bipartisan Policy Center’s task force recommends more affordable housing for seniors, including a new, special form of supportive housing — supports here being in-home health care and help with those other daily tasks.

The only federal program specifically for this sort of housing has had no funds for grants to develop new units since 2012. And contracts that keep an estimated 41,900 affordable will have expired within the next eight years.

What the task force doesn’t address is the income side of the equation, beyond recommending state and local programs to defray senior homeowners’ costs.

There’d be fewer seniors struggling to pay for rent if they’d gotten paid enough while working to have had income left over for long-term savings.

There’d be fewer if Social Security retirement benefits for former low-wage workers were higher — a forward-looking policy change already teed up by leading Democrats (and predictably trashed on by the Washington Post, among others).

There’d be fewer if the Earned Income Tax Credit didn’t exclude most workers over 65 — and do so little for childless workers.

As things stand now, a very large number of seniors and prospective seniors who hope to age in place will have a hard time doing that without risks to their health.

And the risks they knowingly take to cut costs — skimping on meals or skipping doses of medication, for example — may not save enough for them continue paying for their own place.

Rising Tide of Homelessness

Homelessness is, of course, the end result of the affordable housing shortage for some seniors, as well as younger people. Recent months have brought us several articles on the aging of America’s homeless population.

Both The New York Times and ThinkProgress.org focus on seniors living on the streets or the equivalent. Many have been homeless for a long time and suffer from serious health problems, including substance abuse.

Some, however, became homeless only after a fairly recent setback — often a job loss, but sometimes other problems, e.g., a stroke that forced a woman to leave her subsidized unit because the building had no elevator.

Long-term and newly-homeless older people have shifted the profile of our country’s homeless population. Nearly a third of those counted two years ago were at least 50 years old — a 20% increase since 2007, the Times reports.

A 2010 analysis by the National Alliance to End Homelessness concluded that senior homelessness would increase by 33% within the next 10 years, assuming no significant changes in population or poverty rates.

By 2050, more than 95,270 seniors would be homeless, according to the Alliance’s projection — unless, of course, policymakers invest significantly more in affordable housing and in cash or cash-equivalent benefits.

Even the little I’ve pulled together here shows we’ve got the tools in the toolbox. What we seemingly don’t have is the political will to make them sufficient to the needs of homeless and at-risk seniors.

Nor those who’ll have a good chance of becoming seniors, if they don’t become homeless first. So if we’re going to celebrate Older Americans Month, we ought to put more money where our mouths are.


House Republicans Move to Expand Moving to Work (Again)

June 6, 2016

We’re familiar by now with studies showing that poor families, especially the children do better when they move to better neighborhoods. Fewer of us perhaps are familiar with Moving to Work — a program that House Republicans now want to expand to virtually all public housing authorities in the country.

Congress expanded MTW only six months ago, setting the stage for nearly tripling the number of participating housing authorities over the next seven years.

Now the House Majority Leader has introduced a bill that would ultimately let all housing authorities that like what MTW offers to have it, except those the U.S. Department of Housing and Urban Development had recently rated as troubled.

MTW has thus far been an experiment of sorts. The ultimate aim is to identify practices that would achieve at least one of three purposes more effectively than regular rules for Housing Choice vouchers and the main federal funding streams for public housing allow.

The demonstration project, as it’s called, still awaits a comprehensive, independent evaluation. In other words, Congress has barreled ahead — and may barrel further — without knowing whether Moving to Work works.

One can understand why House Republicans would find MTW so attractive. Basically, it converts the voucher and public housing programs into a block grant that affords participating housing authorities a lot of flexibility.

They can shift funds from one housing program to another — or to other programs, so long as they in some manner assist “substantially the same total number of eligible low-income families” as they would have if they hadn’t merged their funds.

They don’t have to assist them as much, however, or for as long. They don’t have to enable poor families to move to neighborhoods with better opportunities to work or with better transportation to get to where work is.

They don’t have to provide training and other services that would enable potentially employable family members to find gainful work in the neighborhoods they’re living in either.

Some housing authorities may have done both. We know, however, that some have achieved savings — one of those main purposes — at the expense of poor families.

The Center on Budget and Policy Priorities cites increases in the portion of income families must spend for their housing. Instead of the usual 30%, more than half the housing authorities have raised rents for at least some very poor families, it says.

Families in several communities had to come up with $200 a month or more — unless they sought and received hardship exemptions. Not likely, unless things have changed a whole lot for the better in recent years.

Some housing authorities have put time limits on housing assistance and/or established work requirements — in both cases, for any household with an adult assumed capable of getting a job, i.e., not disabled or elderly.

Here too one can see why leading House Republicans fancy MTW — just as they still do Temporary Assistance for Needy Families, which, as you probably know, features both time-limited benefits and work requirements.

The flexibility MTW provides has had another, apparently more general consequence — fewer housing vouchers that families can use to help pay rent wherever they can find a moderately-priced apartment a landlord will rent to them.

Two years ago, MTW housing authorities shifted nearly a fifth of the funds they’d otherwise have had to use for vouchers to “other purposes,” the Center reports. Or to no purpose, as was the case in Chicago.

More often, housing authorities have used their voucher funding stream for other defensible purposes. Many, I gather, have tapped it to repair and renovate public housing units — or replace them with subsidized units in new mixed-income developments.

We can’t altogether blame them for this sort of fund shift. As I’ve written before, Congress has persistently shortchanged the public housing capital fund, leaving them with far less money than they need to keep their public housing units habitable.

And for some poor and near-poor people, public housing is a better option than a voucher that would require them to find a suitable apartment — people with disabilities that require features most apartments don’t have, for example.

But you’re not going to find much public housing in those neighborhoods where families could move to work. So fund shifts that left some 63,000 eligible families without housing vouchers two years ago seems a reason to hit the pause button on MTW.

Not the only reason, however. I’ve already mentioned several others. but one of the biggest is the fate of block grants generally. TANF is a prime example — now worth 32% less in real dollars than when Congress created it.

It’s not the only block grant that’s significantly shrunk. Two that HUD administers have lost well over half their value — and in less time than TANF.

All this said, MTW seems to have enabled some housing authorities to innovate in ways that benefit low-income families. Some, for example, have streamlined administration by rechecking income eligibility only every couple of years instead of annually.

So they’ve cut costs, thus freeing up funds they could shift to providing more and/or better subsidized housing, while also relieving households of a time-consuming, burdensome routine imposed more often than needed.

Some have used more funds than they otherwise could have for project-based vouchers, i.e., the kind that subsidize specific housing units, rather than whatever unit a holder can find to rent.

Flexibility here may have enabled agencies to provide more affordable housing in those better neighborhoods — and to lock in affordability, wherever the projects are, says Abt Associates, the source of these and other examples.

“May,” you note, not necessarily did. And “some” because we’ve no study that’s looked across-the-board at what MTW agencies have done — let alone in light of results that matter, e.g., less homelessness, fewer poor families stuck in poor neighborhoods.

HUD has appointed a committee to advise on MTW evaluations, as Congress required. This seems a step toward assessing the outcomes of policy changes housing authorities have adopted.

Whether these assessments can show whether Moving to Work works is a question mark. Surely Congress should wait for an answer before deciding whether to expand the block grant further.

 


Bowser Budget Shorts Vouchers, Leaves Huge Affordable Housing Gap

April 7, 2016

The National Low Income Housing Coalition reports that the District of Columbia has only 40 apartments affordable and available to rent for every 100 extremely low-income households and only 30 per 100 for the deeply low-income.

ELIs have incomes no greater than 30% of the area median — at most, $32,600 for a four-person family in D.C. For DLIs, the maximum is 15% of that median.

The NLIHC figures actually understate the affordable housing shortage here because the area includes well-off communities beyond the city line. Several years ago, the District’s own median was 23% lower.

Even so, clearly a yawning “housing gap” — a shortage of more than 30,600 units two years ago, when the Census Bureau conducted the survey NLIHC used.

It helps explain why nearly two-thirds of the District’s ELI households and nearly three-quarters of the DLI subset had to spend more than half their income for rent, plus utilities — commonly (and aptly) referred to as a severe housing burden.

The gap also, of course, helps explain why the District had so many homeless individuals and families — and still does, though we’ll have to wait a bit for new hard numbers.

The report confirms what everyone has known for a long time. The District sorely needs more housing that’s affordable for its lowest-income residents. And the District government must invest local tax dollars to create it — and preserve what remains.

The Mayor’s budget includes another $100 million for the Housing Production Trust Fund, which helps finance both construction and preservation, though not exclusively for ELIs and DLIs.

But developers can’t afford to build or renovate housing for them without an ongoing source of funds to help pay operating costs. That’s why the District also needs enough housing vouchers of the sort that’s attached to specific units — so-called project-based vouchers.

At the same time, it needs more tenant-based vouchers — those that make up the difference between what low-income people can afford and the market-rate rent of units landlords will lease to them.

Don’t look to the federal government to fund more vouchers. The current budget at best barely sustains those already in use. And the District hasn’t gotten anything like the number of vouchers it needs for many years.

That’s why its policymakers created the Local Rent Supplement Program — a source of vouchers modeled on the federal.

The DC Fiscal Policy Institute has raised concerns about proposed funding for LRSP in next year’s budget. There’d be only enough more to provide affordable housing for some 200 formerly homeless individuals and families, it says.

These would be tenant-based vouchers. They would replace some of the short-term vouchers individuals and families have through rapid re-housing and/or enable either or both to move from permanent supportive housing because they no longer need such intensive services.

The Mayor proposes no additional funds for the project-based type. How then could the Production Trust Fund actually produce more affordable housing for ELI residents — let alone the subcategory NLIHC has created?

The Fund, by law, is supposed to spend 40% on ELI housing every year. It hasn’t always in the past. But the head of the Housing and Economic Development Department said she’d ensure it did. And the latest awards seem to confirm that.

But developers may not respond to all the new opportunities the Fund will create if the Bowser administration can’t assure them of the ongoing subsidies project-based vouchers provide.

This isn’t the only problem with the significantly smaller LRSP increase the Mayor proposes. If all the tenant-based vouchers go to residents in rapid re-housing and/or PSH, there’ll be none for the ELIs and DLIs with housing burdens that put them at high risk of homelessness.

NPR recently profiled a single mother who’d just narrowly escaped eviction, but can’t rest easy because her monthly rent is about $335 more than what her job pays.

She knows that she should move the family to a more affordable place. but even the no-bedroom apartments she’s found rent for barely less than what she makes.

She applied for a housing voucher eight years ago. The family is now “1,000 something” on the DC Housing Authority’s waiting list, she says. There are about 40,000 families behind her. And there would be more if DCHA hadn’t closed the list three years ago.

The problem NLIHC documents is hardly unique to the District. The shortages it documents are actually larger nationwide, as are the severe housing burdens. We can, I think chalk this up partly to investments of local funds.

But that’s hardly a source of comfort to District families who can barely come up with the monthly rent and money for the electricity bill — or who can’t, but manage to stay housed, heated and the like by putting off first one and then the other.

These families are obviously one loss of working hours or other new strain on their budgets away from homelessness — or just one more late rent payment.

The District may rapidly re-house them. But few will be able to pay full rent when their short-term subsidies expire — or find an apartment they can afford. And the proposed budget would by no means fund LRSP vouchers for all that will need them to remain securely housed.

The Mayor has embraced the goal of making homelessness a rare, brief, one-time experience in the District. So it’s perplexing to see that she’s proposing a smaller real-dollar increase for LRSP than budgeted in any recent year but one.

Not much of the “fair shot” her budget promises for those residents on the waiting list and the severely housing-burdened who aren’t because they couldn’t apply.

 


President Has Bold, New Plans for Homeless and At-Risk Families

February 16, 2016

The Obama administration has turned its attention to family homelessness — a big problem even now, years after the recession officially ended. We find the focus in the President’s proposed budget — and not only in the groundbreaking investment the White House overview flags.

We could, of course, find it in all sorts of places, especially if we took a long-range view. We see, for example, diverse investments that will enable current and future workers to qualify for higher paying jobs.

But I’ll confine myself here to a handful of proposals that would house homeless families and prevent some from losing their homes. A partial summary even so.

Assistance for Homeless Families

The proposed budget would dedicate $11 billion over 10 years to housing assistance earmarked for homeless families. An estimated 80% would fund Housing Choice vouchers — those that families can generally have so long as their incomes don’t rise above 30% of the median for the area they live in.

The other 20% would support rapid re-housing, which generally subsidizes housing for a year or less, plus services intended to enable families to then pay the full costs.

The budget for the upcoming year would essentially make a down payment, providing funds for 10,000 new vouchers for families with children and 8,000 more units to rapidly re-house others.

An interesting policy shift here, since the federal Interagency Council on Homelessness has tilted toward rapid re-housing as the tool for ending family homelessness.

We can, I think, credit the shift to the findings of a recently-completed study conducted for the U.S. Department of Housing and Urban Development. The White House summary, in fact, suggests as much.

Shift in Budget Too

The homeless family piece of the proposed budget is notable for another reason. The $11 billion would be so-called mandatory spending. In other words, the federal government would have the authority to make the investment unless Congress changed or repealed it.

Up to this point, homeless assistance, vouchers and other such programs have depended on discretionary spending, i.e., the choices Congress annually makes. This would still be true for the down payment.

But the larger shift to the mandatory side will permit further investments without effectively taking funds from other non-defense programs, as they would if they added to discretionary spending, which the Budget Control Act caps.

Though subsequent deals temporarily eased the caps, public housing authorities are still shy roughly 67,000 housing vouchers lost due to the across-the-board cuts the BCA required for 2013.

Mandatory funding at the proposed level would provide 20,000 new vouchers a year, a HUD director told those of us on a budget briefing call. The Secretary put the total number of families housed at 550,000 during an in-person briefing.

And they’d be secure from the vagaries of annual spending choices.

Short-Shot Homelessness Prevention

Not all families need ongoing assistance to cover their housing costs, of course. Some can remain housed if they merely get a swift infusion of cash or the equivalent — enough, for example, to repair a car needed to get to work or to defray lost wages when an injury sidelines the breadwinner.

The President proposes $2 billion for grants to test ways of providing emergency aid and services. This too is a sort of down payment because the aim is to learn what works best — and so pave the way for a future initiative.

This isn’t the only preventive measure the President proposes. We find also two for insurance. One would tackle state restrictions on unemployment insurance benefits that left barely more than a quarter of laid-off workers with any wage replacement in 2014.

The other measure would create a wage insurance program for workers who lose their jobs and have to settle for one paying less. They’d get half the wages they lost for two years, though no more than $10,000 total. Still, a bit of a cushion for families while they try to adjust.

More Hope Than Change?

Republican House leaders bashed the proposed budget before they even saw it. “[A] progressive manual for growing the federal government at the expense of hardworking Americans,” Speaker Paul Ryan opined.

That doesn’t mean it’s altogether irrelevant, however. For one thing, it presents reasonable solutions to problems that affect hardworking Americans, as well as those who can’t work — homeless children, for example.

How many of them is anybody’s guess. We do know, however, that the latest reported one-night count found nearly 128,000 who met HUD’s restrictive definition of “homeless.” That’s a lot of kids to shrug off as just cost items in a left-wing agenda.

The proposed budget is also relevant because its homeless family initiatives — and many others that would benefit lower-income people — don’t drive up the deficit. On the contrary. The projected deficit would drop by $2.9 trillion over the next 10 years.

I can’t account specifically for the budget changes that would pay for the President’s initiatives. I do note, however, a suite of tax reforms that would raise more revenues from corporations and well-off individuals.

Doubt Congressional Republicans will accept the pay-fors to give homeless families a modicum of security — or in other ways, help poor and near-poor people, as the President proposes.

But the offsets show what’s possible within tight fiscal constraints. And they could be back on the table, a hopeful budget expert has suggested. A lotta hope there. but who knows?

Better to let hope fuel our efforts, as it has at the White House, than to leave change to “the worst,” who surely are “full of passionate intensity” these days.

UPDATE: Due to a typographical error, this post originally understated the estimated number of families that would have housing vouchers. I have corrected the figure.

 


DC Rents Out of Control, Despite Rent Control

January 25, 2016

The District of Columbia’s rent control law is stronger than just about any other in the country, I’m told. But it has loopholes that leave lower-income residents vulnerable to rate spikes — and perhaps homelessness.

We generally see “loophole” used to refer to provisions in the tax code that allow corporations and/or individuals to pay far less than they’d otherwise owe — or nothing at all. Everybody who cares to knows about these.

Not so for the loopholes in the rent control law. But some nonprofits, including several that provide free legal services to low-income residents have discovered them. And they’ve developed an agenda to reform the law.

A fact sheet distributed at a recent briefing I attended listed well over a dozen changes. Far more than I can take on here. So I’ll confine myself to a relative few fixable problems that have broad impacts.

Caps on Rent Increases

First off — and to me, the biggest surprise — the rent control law doesn’t apply to units built after the original version of the law was passed in 1975 or to units vacant then. The law exempts other units too, but this seems to me the biggest loophole, if one can call it that.

For units not exempt, landlords may increase rents for most tenants by the percent increase in the Washington metro area consumer price index the Social Security Administration uses, plus an additional 2%.

No extra 2% for elderly and disabled tenants whose incomes don’t exceed $40,000 a year. And no increase greater than 5% when the CPI rises by more. They’ve got to file a form to get this relative protection, however, which means they need to know this much of the law.

When a unit becomes vacant, the cap, whatever it be, increases to 10% or to what a “comparable unit” rents for, provided the increase isn’t greater than 30%. Comparable units are defined by physical characteristics, e.g., overall size, floor plan, equipment, condition.

Lots of units have come into the market in the last 30 years, of course. And lots rent for goodly sums, especially now that more high-earners have chosen to live in the city.

So landlords have an obvious incentive to choose tenants unlikely to stay for more than a couple of years, if that, e.g., students, employees on short-term assignments away from their home base.

Case-by-Case Exemptions

Just because tenants live in covered units doesn’t mean they won’t get hit with large increases. Landlords can petition for exemptions from the caps.

They may, for example, claim that they’ll suffer “hardship” if they can’t collect more than the allowable rent. They don’t have to allege a potential loss — only that they won’t earn a 12% return on what they’ve invested in the property.

They’ve sought rent increases upwards of 100%, the DC Legal Aid Society has testified. And they can get them before the District has audited their paperwork and made a final decision on their claims.

Meanwhile, tenants are likely to leave or to fall behind in their rent, giving the landlord grounds to evict them. Cleaning out the building has advantages I’ve already mentioned.

Landlords have several other options for getting permission to charge far more than the law would ordinarily allow. They can, for example, petition for an annual 20%  increase to cover the costs of capital improvements, i.e., upgrades or renovations beyond ordinary repairs.

Capital improvement increases are supposed to last only until the landlord recovers the costs. Another option allows for a permanent increase when the costs of a “substantial rehabilitation” are considerably higher than the property’s assessed value. The increase in this case may be as high as 125%.

Landlords don’t necessarily rely on the success of these petitions, however. They can instead used the prospects of rent increases to get tenants signed onto voluntary agreements. These protect tenants from all but the usual rent increases, provided they agree to much higher rents for future tenants.

In one reportedly popular scenario, landlords then offer tenants the option of a buyout — some cash to clear out of their units. Every unit freed up becomes subject to the large increase, followed by the usual ongoing CPI-based increases.

Affordable Housing Losses Offset Gains

Even this over-simplified wade into the weeds shows one reason the District lost nearly half its lower-cost rental units during a recent 10-year period. Only about a fifth were still affordable for households with two full-time minimum wage workers.

Mayor Bowser has committed to substantial investments in new affordable housing construction and renovations to preserve some of what remains. Her administrators have other tools in the box as well, e.g., tax credits, conditions now attached to sales of publicly-owned lands.

But what’s built over here disappears over there — and apparently then some.

When the DC Council passed the rent control law, it intended to “protect low and moderate-income tenants from the erosion of their income from increased housing costs.”

What with one thing and another, the law covers, at most, roughly half the rent units in the city, according to somewhat dated Urban Institute estimates. That doesn’t mean all the tenants are protected, as we can see.

The Council now has two bills pending that would make the law work somewhat better. One would update and otherwise expand its protections for elderly tenants and those with disabilities. The other would partly, but only partly close the hardship petition loophole.

So there’s a lot more to do. The Latino Economic Development Center has a petition District residents can sign to support solutions the coalition I mentioned is advocating.


Could DC Inclusionary Zoning Benefit Neediest Residents?

November 23, 2015

I’d never though much about the District of Columbia’s inclusionary zoning program. For one thing, it hardly made a dent in the affordable housing shortage during the first four years after the District completed final program rules.

The program’s generating more units now — 600 open and roughly 1,120 more on the way, I’ve heard. Still not a large impact in a city that’s lost roughly 31,880 units that rented for $1,000 or less in 2002.

More importantly, given my interests, such affordable housing as the program has produced isn’t affordable for the lowest-income residents — those with incomes no greater than 30% of the median for the D.C. metro area.

That’s a feature of the law, not a bug. IZ, by design, benefits households that are technically low-income, according to the definitions used by public agencies and analysts, but not really low-income at all.

Consider, for example, that the vast majority of units thus far produced are priced for households at 80% of the area median — currently $78,624 for a three-person family or nearly four times the federal poverty line.

A brief by a local coalition nevertheless makes a good case for IZ as a program that can benefit the lowest-income residents. It also recommends some rule changes the Zoning Commission could make.

How the IZ Program Works

The IZ program offers private-sector developers an incentive to include some affordable units in new or significantly renovated and expanded multi-family housing. Instead of directly subsidizing their projects, it permits them to pack in more units than zoning would otherwise allow, thus making the projects potentially more profitable.

In exchange, developers must set aside a modest percent of the residential floor for units that will rent or sell at prices those technically low-income households can afford.

The IZ units must remain affordable, according to the same income standards for as long as the building remains residential. Only recently has any other District housing program preserved affordability beyond a date certain.

Why IZ Doesn’t Mandate Units Affordable for Extremely Low-Income Residents

The story here is fairly simple. Rents affordable for the lowest-income (technically extremely low-income) households don’t cover the costs of operating and maintaining a building. Owners need ongoing subsidies in the form of vouchers to compensate for the shortfall.

That, of course, requires continuous funding. And the money would have to come out of the District’s budget because federal policymakers aren’t going to plow enough extra into so-called project-based vouchers to support a growing number of affordable units — at least, not in the foreseeable future.

Even the President’s proposed budget would merely cover the costs of vouchers already in use. This steady state funding seems to date back to at least Fiscal Year 2010 — except when the voucher program, like all programs dependent on annual appropriations got whacked by the across-the-board cuts in 2013.

We do need increasing investments in project-based vouchers. Better, the argument goes, to pair them with the financial support the shored-up Housing Production Trust Fund provides. By law, 40% of the funds spent must help finance units affordable for ELI households.

How IZ Could Benefit Extremely Low-Income Households

The very structure of IZ means its not inclusionary for ELI households. Yet it can benefit them, supporters say.

The notion here is that moderate-income families will move to the new units they can, in theory, afford. Those units will attract them because they’re more conveniently located, spiffier, close to high-performing schools and the like.

That will free up cheaper units they’re occupying now and/or make them less likely to rent or buy them when they decide to move. It’s surely the case that a goodly number live in those units now.

About a third of rental units District ELI households could have afforded roughly four years ago were occupied by higher-income households, according to an in-depth Urban Institute study.

This is one, though far from the only reason that 64% of ELI households spent at least half their income for rent in 2013. They’re disadvantaged in the competition for the low-cost units, the Institute says, because landlords tend to prefer renters with “greater financial stability,” e.g., steady, well-paying jobs, strong credit records.

IZ arguably reduces the competition by luring those renters to housing that affordable for them, but not their lower-income counterparts.

Not THE Answer, But an Answer

What I think we see here is that no one program can solve the acute and growing affordable housing problems in the District — or in many other communities. IZ shows instead how affordable housing programs are — or should be — thought of together.

As with some of our household repairs and more ambitious projects, we often need more than one tool to get the job done.

I didn’t see how IZ could help do the job for the District’s lowest-income residents. But I’m persuaded now, though I also see how the Zoning Commission could make the tool more effective.

The coalition has half a dozen recommendations, many of which would shift the program toward less well-off households — and even ultimately the ELI. Seems like a blueprint for reform to me.


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