So Mayor Gray kept his promise to invest $100 million a year in affordable housing — or so it seems. The DC Fiscal Policy Institute reports that his proposed Fiscal Year 2015 budget includes a total of $145 million for affordable housing programs.
This includes some that I personally wouldn’t put in the bucket, e.g., funding to help homeowners deal with lead hazards and other housing code violations, grants to support storefront improvements in disadvantaged neighborhoods.
And as the eagle-eyed DCFPI analysts note, $5 million of the total (for the Department of Behavioral Health’s subsidized housing program) is merely money that used to be in the District’s capital budget, rather than proposed additional spending.
A lot of money nevertheless. How much of it will provide housing that’s affordable for the District’s very lowest-income residents remains to be seen. Some we know won’t.
In addition to the programs I’ve cited, there’s funding for the Home Purchase Assistance Program, a similar smaller program for D.C. government employees and a bit of money to promote homeownership in the east end of the city.
Needless to say (I hope), a couple whose annual income is less than 30% of the area median — currently $25,752 — can’t conceivably afford a house (or a condo) here.
It’s also the case, as I’ve said before, that the Housing Production Trust Fund doesn’t support only development and preservation of housing affordable for the very lowest-income residents, i.e., those with incomes no higher than 30% of the AMI.
It is, however, supposed to spend at least 40% of its money each year on housing for them. And it’s generally viewed as the District’s single most important affordable housing tool.
It not only helps finance construction and renovation, but has helped tenants buy their buildings when the owners put them put for sale — even tenants at the lower end of the income scale. This typically ensures that the housing will remain affordable for 40 years, as DCFPI explains.
So the Fund’s capacity is worrisome — and has been for a long time. We see the problem in the Mayor’s proposed budget, especially as compared to District budgets over the past several years.
In 2002, the DC Council gave the Fund an ongoing revenue stream — 15% of certain taxes collected in connection with real property transactions.
That was fine until the housing bubble burst and the ensuing recession put a damper on the commercial property market.
Then, adding injury to injury, Mayor Gray, with the Council’s concurrence, shifted money from the Fund to the Local Rent Supplement Program, i.e., the District’s locally-funded equivalent to the federal Housing Choice voucher program.
Then the city was flush with cash again. And the Mayor had gotten an earful from nonprofit developers and advocates — and from residents convened for his highly-orchestrated One City Summit.
Some months later, he committed $100 million to affordable housing. Most of it went to the Trust Fund, more than doubling what it would have had from only its share of property transaction taxes.
He now wants the Council’s concurrence to put another $30.1 million into the Fund, using part of the large projected surplus for this fiscal year. It would still have only about two-thirds of what it had last fiscal year, however.
And next fiscal year, only its dedicated tax revenues, estimated at $40 million. Or at least, that’s all anyone can count on.
The Mayor has borrowed an idea from a bill pending in the Council and put it into his Budget Support Act, i.e., the package of legislation paired with the budget proper. In his version, half of any end-of-year money left over after the District has fully funded all four of its reserve accounts would go to the Trust Fund.
Better than nothing, but no substitute for funding that’s both sufficient and reliable.
Mayor-hopeful Muriel Bowser has proposed a bill that could meet both needs. It would establish a baseline for the Trust Fund, i.e., a guaranteed annual minimum, of $100 million. The Fund would still get money from the sources the current law specifies, but also from an appropriation of general revenues if needed to maintain the baseline.
This was one of the options that the executive directors of DCFPI and the Coalition for Nonprofit Housing and Economic Development teed up in 2008, when Trust Fund revenues had dwindled.
And my heavens, they cited a bill introduced by Councilmember Marion Barry that sounds rather like the Bowser bill. Reportedly overwhelming support from advocates and low-income residents.
I suppose we’ll see something similar at the hearing on the Bowser bill late this month. Perhaps a better outcome this time round.