Category Archives: City Politics

HOTH 2017 2

HAT, Partners Work Against Racial Wealth Gap with Town Hall; Trump Administration Exacerbates It

One-sixteenth.

That’s the average wealth of a black family compared to a white family in America. It’s the result of centuries of racist policy in education, employment, and especially homeownership.

MANNA’s Housing Advocacy Team has long had an explicit focus on closing the racial wealth gap in our communities, and along with our partners at the Coalition for Nonprofit Housing and Economic Development and the Latino Economic Development Center, this past Saturday we hosted a Homeownership Town Hall aimed at connecting low-income families, especially families of color, to homeownership opportunities.

HAT and our partners are proud of the work we do, and we can see the impact that it has in DC. At the same time, however, we realize that there needs to be national progress in order to achieve justice in our country. The Trump Administration, on the other hand, is looking for a massive transfer of wealth from the bottom to the top; one that’s sure to widen America’s racial wealth divide.

The Town Hall

Close to 200 people came on Saturday for a series of workshops, vendor tables, and presenters covering every step of the affordable homebuying and ownership process. Participants learned about how to improve their credit scores, how to connect with organizations like MANNA that can help them find a home, and the wide variety of city programs that can help make affordable homeownership possible.

Current homeowners were able to learn about city property tax laws and legal estate planning, helping to ensure that their homes will be passed on to their children.

MANNA’s Director of Homebuyer Education, TC Caviness, started off the strong lineup of speakers by articulating the extent to which a gap in homeownership holds back wealth building for black families. Even other areas that are typically thought of as wealth builders, like education level, pale in comparison to the impact that homeownership has.

Despite having worked around housing for years, said TC, “I was shocked when I saw these charts.”

RacialWealthGap_1.pdf college RacialWealthGap_1.pdf

A college education, while important for many, many reasons beyond money, does almost nothing to close the racial wealth gap, explained TC. Homeownership, on the other hand, shrinks that gap by more than a third.

Polly Donaldson, Director of the DC Department of Housing and Community Development, and Councilmember Anita Bonds, Chair of the Council’s housing committee, both spoke about the importance of affordable homeownership for building a city where all residents can thrive.

Councilmember Bonds, reflecting on the positive impact of recent increases to DC’s Home Purchase Assistance Program for first time low- and moderate-income homebuyers, told the crowd, “Next year, I want to increase it again!”

Trump Administration’s Reverse Robin Hood

That was in stark contrast to the ideas that are coming out of the White House. The Trump Administration has released a series of tax cuts for the wealthy that would collectively cost around $6.2 trillion over the next decade.

To pay for them, the President has introduced a budget plan that would drastically cut many programs targeting poor families, among which families of color are disproportionately represented.

Here are a few of his proposed tax and budget cuts, juxtaposed for context.

  • $192 billion cut to food stamps pays for $174 billion giveaway by abolishing the Estate Tax
  • $143 billion in cuts to student loans helps pay for $158 billion lost by repealing a tax on the unearned income of the wealthy (interest, dividends, capital gains, etc.)
  • $40 billion in cuts to EITC and the child tax credit vs. $400 billion lost by abolishing the Alternative Minimum Tax (AMT is often the only tax paid by billionaires)

(from Americans for Tax Fairness)

While HAT and others are prepared to continue our push for fair funding in the District, we need help from our national partners and from people all around the country to stop the Trump Administration’s disastrous and immoral plan to take from the poor and give to the rich. We know that the impact of this theft will disproportionately fall on communities of color, causing the racial wealth gap to grow wider and wider.

Looking at our country’s history, it’s certainly not unprecedented. But as MANNA’s work in DC has proven, it’s not inevitable, either.

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As Budget Holes Abound, Council Approves Tax Break for Millionaires

Councilmember Davd Grosso (At-Large)

In front of a packed hearing room, as many held signs in silent protest, the DC Council Tuesday morning rejected an effort by Councilmember David Grosso (At-Large) to delay a cut in the District’s estate tax. The tax cut, which would raise the threshold for the estate tax from $2 million to $5 million, will go into effect in January 2018 unless the Council acts before then.

Some have estimated that the proposed cut in the estate tax would affect only a hundred families in the District.

Alongside a reduction in the business franchise tax that Councilmember Grosso and advocates also unsuccessfully opposed, these cuts come against the backdrop of a tight and stressful budget season.

Metro funding, investments in education, looming federal cuts, and an on-going affordable housing crisis have made for a lot of hard discussions about what should be funded and at what levels. Yet as we’ve covered before, the Council has made things unnecessarily harder for themselves with tax cuts that do little to help the city move forward.

Councilmember Grosso laid out in plain terms the reasons for his opposition. When the District was struggling, he said, the Council bent over backwards to try to attract new businesses. But that effort was with an explicit goal in mind: to lift up all the city’s residents, especially those that had been left behind by a changing economy.

Now, said the councilmember, the District is thriving—but the boom times aren’t being shared by all. Not giving away the revenue from multi-million dollar estates and big businesses’ franchise expansions is a simple way to move towards fulfilling the original vision for growth.

“I’m not quite sure,” said Councilmember Grosso, “how we ended up as a Council aligning with the Trump administration’s budget priorities. We’re looking at underfunding social services and prioritizing tax cuts for big business and the wealthy.”

Councilmembers Brianne Nadeau (Ward 1) and Elissa Silverman (At-Large) joined Grosso in their opposition. Both spoke about the challenges facing the District and the impact that this money could have if directed towards community needs.

Councilmember Trayon White (Ward 8) supported the effort to postpone the estate tax cut, while joining the majority in allowing the business franchise tax cut to move forward.

The rest of the Council followed Chairman Phil Mendelson’s lead in preserving the cuts, with many speaking about a desire to grow the District’s economic output.

As Councilmember Grosso noted, however, economic output is no longer in question. It’s the original vision of inclusive growth that now is imperiled.

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The Post Misleads on DHCD Grant Givebacks

From its opening line and its title alone, a recent Washington Post article’s message is clear: Mayor Bowser’s administration is responsible for losing almost $16 million in federal funds for affordable housing. Yet the facts behind the Post’s recent article do little to support this conjecture.

The Facts

The article, entitled “The D.C. Housing Department forfeited millions as families waited for help,” details how DC’s Department of Housing and Community Development (DHCD) was forced to return millions of dollars between 2014 and 2016.

These returns, representing a significant portion of the District’s HOME block grant for affordable housing, were compelled because of mismanagement. Some of the $16 million represented money that was never allocated for specific projects and ran into a deadline for use, while the rest came from projects that DHCD approved, but that the federal government later determined did not meet their standards.

This giveback was undoubtedly a tragedy in a city starved for affordable housing, and a preventable one. However, it’s not a reflection of DHCD’s capacity under Mayor Bowser and DHCD Director Polly Donaldson.

The Mislead

In fact, the Post is careful never to specifically fault the Mayor or her administration for the givebacks, preferring instead to lay blame with DHCD. It’s a fair claim—an indisputable one, actually. DHCD mismanagement under the past administration is undoubtedly the reason these funds were lost. But by weaving the facts with repeated references to Mayor Bowser and Director Donaldson, the Post attempts to imply a connection where none exists.

It’s the same game the Bush administration played in going to war in Iraq—say “9/11” and “Saddam Hussein” enough times in the same sentence, and the result is over half the population believing that Hussein was personally responsible for the attacks.

The Post additionally misleads readers with its talk of using the $16 million for local rental vouchers under the city’s Local Rent Supplement Program (LRSP). The article claims that the $16 million “could have provided rent vouchers for a year to roughly 1,000 of the city’s poorest families.”

As the administration noted in a rebuttal it circulated earlier this week, the funds in question were spread over multiple years—no single year had $16 million left over. Furthermore, rent supplements are not a one-time expense. The city is required to cover that supplement for as long as the family lives in their subsidized unit. The “1,000 families,” then, is nothing but hyperbole.

The Forgotten

The most important piece left out of the Post article is the most damning to their tenuous connection. All of the money forfeited, both because of deadlines for use or projects that didn’t meet federal standards, was the result of decisions DHCD made before the Bowser administration took over.

The administration’s statement notes that “the over $15 million in HOME funds referenced in the Post’s story actually expired prior to 2015. These projects were funded and approved by the prior administration and were subsequently found to be ineligible for HOME funds during the first six months of the Bowser Administration…”

What’s more, the Post fails to identify that the former DHCD employees it quotes were in fact responsible themselves for underwriting several of the projects that were denied by the federal government.

Whether through an intentional omission or an accidental oversight, this irony is lost for the reader.

While DHCD undeniably had major problems in the past, under Director Donaldson’s leadership it has become a major asset in DC’s work to build and preserve affordable housing. A piece like this one from the Post, with its misleading ties and hyperbolic claims, serves only to endanger funding for the families it ostensibly wants to help.

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Councilmembers Call for Divestment from Wells Fargo

Councilmember David Grosso, whose office wrote the resolution

The City Council wants DC to reconsider its relationship with Wells Fargo Bank. That’s according to a resolution introduced by Councilmembers David Grosso (AL), Anita Bonds (AL), Elissa Silverman (AL), Brianne Nadeau (Ward 1), and Charles Allen (Ward 6) last month.

Wells Fargo handles the city government’s banking needs as the city’s bank of record, with billions of dollars in its account.  But in their statement, the councilmembers expressed skepticism that Wells Fargo was meeting its obligations to the communities it serves and called for the District to “reassess its existing relationship with Wells Fargo and consider greater investment in local banks to support community growth.”

Their statement listed concerns about Wells Fargo’s history of racially discriminatory lending practices, its funding of private prisons, and its role in financing the Dakota Access Pipeline. That pipeline was rerouted through the drinking water of the Standing Rock Sioux Tribe in part because it was deemed by the EPA to be too dangerous to pass through predominantly-white Bismark, ND’s water supply.

Wells Fargo has also made news in the past year with revelations that thousands of their employees opened millions of false accounts using customers’ information. According to past employees, this was driven by unrealistic sales requirements and a toxic corporate culture. In September of last year Wells Fargo settled with federal regulators for $185 million.

In part because of this, Wells Fargo’s score under the Community Reinvestment Act (CRA), a piece of legislation designed to monitor and encourage responsible banking in low- and-moderate-income communities, was recently downgraded to a “needs to improve.” This is a failing grade under the CRA ratings, a rare occurrence under a system some advocates have described as being too lenient.

Between 1990 and 2007, an average of only 4 percent of banks each year received a failing grade on their CRA exam.

In their report, federal regulators also referenced Wells Fargo’s history of racial discrimination in lending and other improper lending techniques.

Wells Fargo, for its part, claims its problems are now in the past and that it has taken concrete steps to improve its community services. In a statement after their federal settlement, CEO Tim Sloan declared that Wells Fargo is on a “journey to make things right with customers and rebuild trust.”

DC councilmembers, however, remain unconvinced.

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How to Keep DC From Becoming the Next San Francisco

Washington, DC and San Francisco have some striking similarities. Both are mid-sized cities with institutions (government and the tech industry) that pack a punch above their population size. Both are somewhat restrained in terms of expansion, with DC’s small, set borders, and San Francisco’s watery boundaries. And above all, both have seen extreme gentrification in recent years, with the cities growing rapidly and becoming wealthier and whiter as time goes on.

But San Francisco is undoubtedly further along in this vicious process: while DC’s average monthly rent of $1,400 for a single person is the fourth highest in the US, San Francisco’s is the highest in the world at an impressively awful $2,000+.

That allows DC residents to look to San Francisco for some lessons—or, if we’re not careful, to behold our future.

Based on these insights, we’ve got some recommendations for the city council… and for you, the reader. Read on.

What will the future hold for DC if it follows the Frisco model?

  • All housing development, including affordable housing, will be stymied as fear over housing shortages and NIBMY-ism drives irrational opposition. In the Bay Area, this has resulted in severe housing shortages at every level, not just for low-income families. Unlike San Francisco, DC is currently in no danger of a total housing shutdown. The recent explosion of luxury units and high-end condos contributed to overall supply actually outpacing demand in the District’s housing market last year. Of course, affordable housing is nowhere near keeping up.
  • Homeownership will drop even further and DC, like San Francisco, will become truly a renters’ city. Ownership rates in San Francisco have been on a multi-decade slide, with only a third of residents now owning their own homes. DC isn’t much better at a 40 percent homeownership rate.
  • In part because of rock bottom homeownership rates, displacement will move from a low-income issue to a middle class issue. Only the truly wealthy will be able to afford the city proper. That’s already the case in San Francisco, where things have gotten so bad that even good-paying professional jobs are starting to move out because the companies’ employees can’t afford the city.

“Yikes!” you say. “That’s pretty grim. What can we do to avoid all this?” Well, I’m glad you asked!

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One of San Francisco’s iconic cable cars

DC doesn’t have to go down this path—there’s still time to change. Here are some simple steps we can take to make sure the District remains home for everyone.

  • Affordable Housing: It needs to be funded and constructed like never before. That’s why we’re asking the city council to commit at least $125 million to the Housing Production Trust Fund for the coming year. And honestly, that number might not be big enough. Because of problems in the Low Income Housing Tax Credit market, a primary funding tool for many affordable housing projects across the country, $125 million is probably the new $100 million. If the council really wants to take a step forward rather than just holding even, we’ll need even more commitment.
  • Homeownership: Increasing homeownership needs to be a top priority, both because of the wealth it builds and the protection it offers against sky-rocketing rents. We’re calling on the council to keep funding the Home Purchase Assistance Program (HPAP) at $16 million, the level it was increased to last year. HPAP provides crucial down payment assistance and secondary mortgage loans to first time homebuyers in DC. That builds wealth, moves people into the middle class, and keeps long-time residents in our city.
  • An ever-broader movement: More middle-income Washingtonians need to realize that affordable housing is their issue, too. NIMBY-ism and indifference might work in the short term, but sooner or later it will catch up. We need to build a broad coalition of DC residents, new and old, of all wealth levels and racial backgrounds. (The rich benefit from affordable housing, too, by the way. Unless wealthy urbanites want to start entering the service industry en masse, it’s in their best interest to keep around the people who make cities run.)

If DC is to avoid the fate of its West Coast sister city, we need to move on funding and organizing now. Tell your councilmembers to boost the Trust Fund. Get their commitment that they’ll keep supporting HPAP. And join a local organization that’s fighting for affordable housing. Hey, we’ve got a suggestion right here.

If you would like more information about joining the Housing Advocacy Team, email Jonathan Nisly at jnisly@mannadc.org!

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Brookland Manor Residents Fight to Keep Their Homes–and Families–Intact

In a city starved for housing, 1200 additional units sounds like a blessing. That’s the net gain from Bethesda-based developer Mid-City Financial Corp’s proposal to redevelop Brookland Manor, a 535-unit complex near the Rhode Island Metro. But a closer look reveals that Mid-City’s designs have no room for current neighborhood residents.

The Plan

Mid-City’s grand vision for the site of Brookland Manor is, well, grand. With over 1700 rental units and 180,000 square feet of retail space, the project has the potential to be a boon to the area’s housing and economic markets.

brookland manor redevelopment

Artist’s rendering of the redevelopment plan

The problem comes, however, when these 1700 units are compared to what’s currently there.

A quarter of Brookland Manor’s units have 4 or 5 bedrooms, a rare and important feature for families living in multi-generational situations. OneDC, a local organizing group who has been working with Brookland Manor tenants, says that often the ability to add an aunt, cousin, or grandparent to the household is the only thing that keeps them from ending up in homeless shelters.

The redevelopment, however, would offer no 4 or 5 bedroom units and would reduce the number of 3 bedroom options. Units with more than 3 bedrooms, according to Mid-City, “are not consistent with the creation of a vibrant new community.” That kind of language has led residents to file a lawsuit claiming discrimination based on family size.

Affordability Concerns

At a teach-in on Brookland Manor Monday night in Northwest, OneDC tenant advocates asserted that the plan will also reduce affordability in the neighborhood. Currently 373 of the units have rent ceilings under the federal Section 8 housing program. Mid-City regularly touts the fact that they will keep this contract under the redevelopment.

However, most of these new affordable units will be designated as “senior units” with the aforementioned reductions in bedrooms. Tenant advocates say this will force elderly residents living with children and grandchildren to choose between sending their families away or joining them in their exodus.

Beyond the Section 8 units, most of the rest of Brookland Manor’s residents are renting affordably thanks to DC’s rent voucher program. According to the Washington Post, Mid-City has “pledged to try” to keep these renters on in the redevelopment.

On Monday night, advocates expressed heavy skepticism about this proposal. Because properties must meet the area’s “fair market rate” to be eligible for the voucher program, Mid-City’s new luxurious units would almost certainly be too expensive to qualify.

That would mean at least a hundred households looking for a new place to live.

Moving Residents Out of “Good Standing”

Even the only residents who could theoretically make it through the redevelopment unscathed—small families currently living in Section 8 units—feel that their situation is tenuous.

Mid-City’s promises about avoiding displacement have always included an important caveat: that it applies to residents “in good standing.” And as a recent Washington Post article pointed out, Mid-City has mounted a concerted effort to make sure that definition applies to as few residents as possible.

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From @LeeyahNotLayah on Twitter

The Post article details how many tenants at Brookland Manor have faced eviction notices for late payments as small as $25. While the vast majority of those attempted evictions have been successfully avoided, it seems that Mid-City may be building a case that these residents are not “in good standing.”

OneDC advocates also noted that the management has started issuing notices of infraction to residents for offenses as benign as sitting on their front stoop or allowing their children to play on the lawn. The effect, they say, is that almost every household now has a record of violation—enough to argue that they do not meet the “good standing” requirement.

Thursday Rally

The next step in the redevelopment process is a zoning commission meeting on Thursday, February 23. OneDC is asking District residents to come out for a rally that evening at 5:00 to pressure the commission to keep residents’ interests in mind.

Ultimately they want Mid-City to preserve all 535 existing units as affordable, commit to keeping on all current residents, and maintain the present number of 4 and 5 bedroom units. To help them do so, OneDC has offered to work with them through the process of securing Housing Production Trust Fund money from the city.

So far, however, Mid-City has expressed no interest in such a proposal.

Join us at 5:00 this Thursday, Feb 23, as we rally in support of Brookland Manor tenants at the DC Zoning Commission. 441 4th St NW, Washington, DC

More details here: https://www.facebook.com/events/1389018421132061/

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DC Bill Would Move Surplus to Housing Trust Fund, Schools

Image: Councilmember David Grosso, center

An exciting new bill from At-Large Councilmember David Grosso looks to get DC’s surplus funds moving for school improvements and affordable housing.

The bill, introduced last week, addresses one of the city’s self-inflicted wounds we wrote about a few weeks ago. As the city faces an affordable housing crisis, federal funding uncertainties, and more, it needs to have all options on the table.

Yet under current city law the District’s yearly budget surplus is required to be put into savings. This, along with DC’s overall fiscal strength, has contributed to a record-breaking general funds balance of $2.4 billion.

DCFPI

The portion of that designated as “cash on hand,” however, is just over a billion dollars. The city’s goal is to have 60 days’ worth of operating funds in reserves, and by current calculations they are about four “days” short.

Councilmember Grosso’s bill notes that the District is double-counting some of its debt obligations, and it would have the city move to federal bookkeeping standards. If this were done, the DC Fiscal Policy Institute estimates that it would result in $90 million becoming instantly available.

Under the bill, this money—and all future surplus funds—would be split evenly between the Housing Production Trust Fund (HPTF) and school improvements.

The HPTF is DC’s main vehicle for funding affordable housing projects, and a $45 million infusion would be a big help in meeting the city’s ongoing need. It would also provide crucial gap funding for current affordable housing projects impacted by declining low income housing tax credit markets. (Those interested can learn more about this here.)

HPTF money has helped thousands of Washingtonians find affordable housing, and increasing its budget is one of the best ways to keep life-long residents from being priced out of their city.

While Councilmember Grosso is currently the only sponsor, we hope to see other councilmembers joining soon. Rarely does such an easy and impactful fix come along.

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Automatic Tax Cuts: DC’s Leaky Bucket

An ongoing affordable housing crisis. A metro system in grave disrepair. An uncertain future of federal funding for Medicaid and other services. These problems and more face DC as the city looks to craft its budget for the coming year. However, since 2014 the city has given back $100 million dollars in tax cuts, built up $2 billion in savings for its reserve, and has plans to give back almost $130 million more before the decade is over.

In 2014, the City Council changed tax policy to give away increases in revenue as tax cuts. Whenever the District government reached a new level of income, a new round of tax cuts would automatically take place.

Some of those tax cuts made sense. For instance, a new bracket was created at a lower rate for individuals earning $40-60,000, helping middle-income families. The standard deduction that everyone can take has been raised and stands to increase even more.

Some of the cuts, however, clearly benefit only a select few. Those earning between $350,000 and $1 million a year saw their rates cut. And the new tax code goes further in making sure that this inequality persists from generation to generation, raising the threshold for higher estate taxes from $1 million to $2 million to, in the future, over $5 million.

The biggest issue with this model of tax cuts is that they are inflexible to current needs. Revenue goes out the door, right or wrong, before Washingtonians have a chance to weigh in on how they think it should be used. Our elected officials are shooting themselves in the foot by making it unnecessarily harder to deal with the affordable housing crisis, metro’s challenges, and more.

A similar problem is happening with DC’s budget surpluses. Although final numbers aren’t out yet, as of last estimate the District is looking at a $220 million budget surplus from the last fiscal year. However, this money also can’t go to any of the above concerns—it’s legally mandated to go into DC’s savings. That law has led the city to a record-breaking $2 billion bank account.

In many ways, it’s a good problem to have. Disputes over how to spend surpluses are what accountants dream of.

But in a city where families are being priced out of their homes, trains are smoking on the tracks, and a volatile federal government threatens safety net spending, reserve requirements should be revisited. And automatic tax cuts shouldn’t be slipping out the door.

Primary winners Robert White, Trayon White, and Vincent Gray (from thekojonnamdishow.org and glaaforum.org)

Council Primary Winners Set Big Goals for Affordable Housing

Left to right: primary winners Robert White, Trayon White, and Vincent Gray (from thekojonnamdishow.org and glaaforum.org)

Washington, D.C. is set to see some new faces in politics come November, as two newcomers and a returnee beat incumbents in the City Council Democratic primaries last Tuesday. Although nothing will officially change until after the November general election, in liberal D.C. a nod in the Democratic primary is tantamount to victory.

So how will the shake-up affect affordable housing in the city?

In the Ward 7 race, the challenger certainly wasn’t an unknown quantity. Former Mayor Vincent Gray marked his return to city politics with a defeat of first-term Councilmember Yvette Alexander. Gray had been campaigning heavily on his record as mayor, citing his work to increase funding for affordable housing programs of all kinds.

“Overall, [under my administration] we invested $287 million in affordable housing and recommended that the city subsequently invest each year at least $100 million in affordable housing.”

The city has since surpassed that number, committing $100 million each year to the Housing Protection Trust Fund (HPTF) alone, plus increasing funding for the Home Purchase Assistance Program (HPAP). Gray has promised to support the HPTF at current funding levels.

Gray also cites more technical concerns, pointing to his effort as mayor to reform D.C. zoning laws and allow for greater residential density. He promises going forward to “support zoning changes to make building more affordable units easier and more straightforward.”

In Ward 8, Trayon White, a neighborhood organizer and alumni of the D.C. Attorney General’s office, defeated incumbent LaRuby May, another first-term councilmember.

Trayon White touched on a number of affordable housing issues throughout his campaign. He has said he supports the $100 million per year to the HPTF and more.

“I support raising additional revenue for housing. D.C. had a $417 million surplus in the last fiscal year. It’s not that we don’t have any money… We have to put more money into housing to ensure decent and affordable living quarters for all.”

Earlier this year, Trayon White called for an increase in HPAP funding that has since been answered by the Mayor and Council’s recent budget. He has also cited a need for tightening rent control laws by closing loopholes and limiting landlords’ guaranteed return on investment.

Like Gray, he supports efforts to allow for greater density and simplified zoning laws to accommodate the development of affordable housing.

In the At-Large race, another White (Robert) managed to unseat long-time incumbent Vincent Orange. Like Trayon, Robert White also hails from the Attorney General’s office.

Zoning law has also been on his mind, especially as it intersects with transportation concerns.

He has called for rezoning struggling commercial corridors to allow for more affordable housing in areas with easy transit access, an important goal in a city that struggles with gentrifying transport hubs.

Robert White has also proposed increased incentives for non-profit developers (like MANNA) that provide affordable housing.

In addition to his big policy proposals, Robert White has been critical of current enforcement of affordable housing laws, writing that “it’s the rule, not the exception, that developers get waivers in order to avoid building affordable housing.”

As Gray, White, and White look to join the Council in November, it will be up to the citizenry to remind them of their ambitious plans for affordable housing in the District.