It’s a rough time to be a young adult. Many people in their late 20s and early 30s are a bit behind earlier generations when it comes to buying their first home. Many are in debt, unemployed, and living in the basement of their parent’s house. They are taking their time and trying to find some sort of financial footing before they are settling into a new home. Renting a home is about 40% more expensive than purchasing a home which means that buying a home in many areas is relatively affordable, especially in the post-recession market. Moreover, many programs help people find lower down payments which in turn allows for first time homeowners to be able to take advantage of the lower market by making a reasonable down payment. Sadly, not everyone has access to these programs, which is causing many first timers to stay away from homeownership. With affordable housing supply in the District being very limited, this has created a perfect storm of turmoil for District millennials; these problems need to be fixed quickly.
While there is no quick fix to the many systemic issues fueling this problem, the District has several programs in place to help combat these inequities and in recent weeks several pieces of legislation have been passed to strengthen these efforts. Two of those bills being the Affordable Homeownership Preservation and Equity Accumulation Act of 2013 and The Housing Production Baseline Funding Act.
The District has a pot of money called the Housing Production Trust Fund which it uses to help develop affordable housing, including ownership housing. With this assistance come covenants and resale restrictions that often hamper more affordable ownership development and trap homeowners in financially unsustainable situations. The Affordable Homeownership Preservation & Equity Accumulation Act of 2013 reduces these covenants in distressed parts of the city, while providing a recycle and recapture model to return all city subsidies to the Housing Production Trust fund for more affordable development. The Trust Fund Baseline Funding Act simply realizes that the Trust Fund services a great need, and funding it annually with at least $100 million dollars is needed to keep addressing these needs. In addition to these efforts, there are other amazing programs like HPAP (Home Purchase Assistance Program) and LRSP (Local Rent Supplement Program) that are there to assist District residents reduce their monthly housing costs.
With assistance from the Housing Production Trust Fund and similar subsidy/loan programs, Manna has been able to build over 1,200 units of affordability, generating over $60 million in equity for District families – steps being taken in the right direction.