Category Archives: Housing news

mayor bowser

Affordable Housing: Mayor Announces $500 Million to Offset GOP Bond Cuts

“Like most Americans, we were sleeping last Friday at 2am when Senate Republicans passed what they call the ‘Tax Cuts and Jobs bill,’” said Mayor Bowser, at a press conference in DC this morning.

And like most Americans, the Mayor was not happy. The tax bill would decimate the country’s ability to fund its necessary social services going forward, adding around $1.5 trillion to the federal debt. But most specifically to the work of the Housing Advocacy Team, the bill cuts a key tool for funding affordable housing: private activity bonds created through the Low-Income Housing Tax Credit.

These tax-exempt bonds leverage private investment with public subsidy to create affordable housing. Many affordable homes currently in the works in DC are counting on having access to this financing. But under the version of the bill the Senate passed these bonds would be severely weakened, and under the House’s bill they would disappear entirely.

MANNA, Inc. just finished two apartment rehabs in Brightwood—a total of 60 homes—that wouldn’t have been possible without this program. And there are another 230 homes in MANNA’s pipeline that depend on private activity bond financing.

Those numbers are reflected in the city as a whole, too. Since 2010, 9,000 affordable homes have been produced or preserved thanks to private activity bonds. And it’s exactly the kind of innovative market-led program that Republicans claim to love. $1.3 billion in public funding have produced an additional $650 million in investment from the private market.

bowser press conferenceMayor Bowser at Monday morning’s press conference

The importance of private activity bonds led the Mayor to decide DC couldn’t wait to see what happens before acting. “While we call on Congress to go back to the drawing board on taxes, we are not going to wait to act on housing,” declared Mayor Bowser.

That’s why she announced that DC’s Housing Finance Agency will be issuing $500 million of its own tax-free bonds to preserve most of what the District might lose under the federal bill.

That will allow DC to produce or preserve an additional 4,000 affordable homes—most of which are already in the works. The Mayor noted that as large as this investment is, it doesn’t even meet everything that’s in the current affordable housing pipeline. Getting funds quickly to projects that are furthest along will be crucial for keeping DC’s affordable housing development on track.

But the bond funding also serves as an important statement of what DC stands for—what Mayor Bowser often cites as “DC values.” As Councilmember Anita Bonds (At-large), the chair of the City Council’s housing committee put it, “It is important that in our own way we send a message that we will stand against these cuts.”

With the issuance of these bonds, the District government communicates that providing safe, affordable homes for all remains a top priority.

If only the same could be said of the other government in DC.

1023_paul_ryan_cog-1000x547

Republicans, Tax Cuts, and the Manufacturing of a Crisis

We have a debt crisis staring us in the face. … The problem we have is spending, not taxes. We’ve got to get our spending under control because that’s the root cause of our problem.
-Paul Ryan, speaking in 2011 on Meet the Press

On its face, the Republican tax plan working its way through Congress is not a direct assault on affordable housing. Yes, it would decimate bond funding for affordable projects. Yes, it would eliminate several tax credits that help build affordable housing. And yes, the very rumor of its existence has caused multi-million dollar holes to appear in affordable housing plans for over a year now.

But still, this does not appear to be an assault on affordable housing in the same way that this summer (and fall’s) campaign to repeal Obamacare was an assault on healthcare.

Bruce Bartlett, a former policy adviser to President Reagan, says that appearance is wrong. In a recent op-ed in the Washington Post, Bartlett says that in the minds of many congressional Republicans, the $1.5 trillion deficit resulting from tax cuts isn’t a defect—it’s a primo feature.

That deficit, caused by their tax breaks to corporations and the wealthy, will allow Republicans to double down on arguments like the one Paul Ryan makes above. “There’s only so much money coming in,” Republican leaders will explain. “The responsible thing to do is cut spending.”

Sound overly cynical? Bartlett knows first-hand that it’s not. It’s the same thing that congressional Republicans did in the 1980s after Reagan’s tax breaks. It’s the same thing that they did again in the 2010s (see: Ryan, Paul), in a crisis caused by the Bush tax breaks. And it’s the same thing Kansas Republicans have been doing for the past half-decade as Governor Sam Brownback works to create a tax-free utopia.

In each of these cases, Republicans passed massive tax cuts, then railed righteously against the resulting unbalanced budgets—demanding that social spending be cut to right the ship.

It’s a part of the “starve the beast” movement (the beast being our government and its social programs), another step along the way to making government small enough to drown in a bathtub.

And we’ve already seen what the Trump Administration’s true priorities are for affordable housing—this year they proposed throwing 200,000 low-income families off of rent vouchers, with a significant portion of those families likely to end up homeless.

Congress balked at those plans, with even many Republicans seeing the cuts as unnecessary and cruel. But that calculus could easily change when the mother of all manufactured crises hits.

If this tax bill goes through and the US is running $1 trillion per year deficits by 2020, Republicans will likely be clamoring again to balance the budget—and discretionary spending on things like affordable housing will be among the first things to go.

“The problem we have,” Paul Ryan will piously remind us, “is spending.”

empty luxury

The Luxury Ship is Sinking–Could DC Developers Jump to Affordable Housing?

Across the country, more and more developers are hitting what they consider to be an unpleasant reality—the luxury housing market is flooded. With so many new luxury units coming onto the market at the same time, there’s too much supply to support the sky-high rents that these amenity-rich developments demand.

There’s at least some evidence that the same could be true in DC. As luxury units flow into neighborhoods like Shaw, Capitol Hill, and new megadevelopments like the Wharf, top rents have gone down in other neighborhoods. Anecdotally, people around the city talk about longer and longer periods to fill these new buildings, with some sitting close to half-empty.

And rents for the most desirable buildings in Columbia Heights, Logan Circle, Dupont Circle, and Mount Vernon Triangle have all declined.

Does this mean we’re moving into a new period of affordability? Is it time to celebrate the salvation of the city?

premature celebration

Not even close. These drops in prices only apply to the top of the market. Average rents are still increasing, although they are finally increasing more slowly than the country as a whole.

But the crisis remains. Lifelong DC residents are still being pushed out of their homes every day.

There is opportunity, however, if for-profit developers in DC get turned off of building more luxury units. In other places across the country, developers are now looking at a new (old) way to make money: workforce and affordable housing.

Building for people of more modest means has been so neglected in recent years that there’s an enormous demand for any developer who can bring something reasonably priced to market. What’s more, developers are starting to see less expensive housing as a wiser investment—unlike those in luxury digs, average families don’t look to downsize as soon as the economy turns south.

To get for-profit developers to build truly affordable housing, however, will require a lot of subsidy. Part of that is, of course, the “profit” piece of for-profit. That extra expense, along with the rarity of a true sense of mission to their work, is the reason non-profits need to keep leading in affordable housing development—when money is the only motivator, it has a way of bulldozing even those who are supposed to be served by a project.

But there’s a fundamental reality to the need for subsidy, too. To get rent prices below market rate means making them cheaper than the sum of their parts—land prices, construction costs, management fees, maintenance. All of these things are expensive (some at historic highs), and if we’re serious about keeping a diverse city, we need to invest more in making it happen.

One important first step would be quickly passing Councilmember Anita Bonds’ (At-Large) bill that would set a $120 million floor each year for DC’s Housing Production Trust Fund. That would increase the fund by $20 million over its current level, while also saving it from the yearly changes in the political winds that it is currently vulnerable to.

It might not be for the right reasons, but DC’s for-profit developers could soon be coming around to affordable housing. To make that move stick, we’ll need to invest more in housing—and fast.

Affordable Housing at The Wharf?

One of the largest developments to ever happen in DC, The Wharf, has finally revealed itself to many “Ooh’s & Ahh’s”. With progressive legislation in place, and a highly-celebrated public-private partnership, let’s see what is there for us in the affordable housing realm.

Manna.wharf

Of the 649 apartments becoming available in Phase 1, DC’s Office of the Deputy Mayor for Planning and Economic Development (DMPED) highlights that 30% of the units will be affordable housing. But over one-third of those “affordable” units are considered workforce housing, pegged at 100% or 120% of AMI- or for those families making between $110,000 and $132,000  per year.

While it is not a problem to have “workforce housing” – it is a problem to have that included in the affordable housing calculations. It makes it confusing for the general public and forces us to scrutinize the numbers to see exactly what they’re talking about.

 The most confusing thing is DMPED spotlighting how half of the affordable housing units are for those households at 30% AMI and 60% AMI- but that is only true if the “workforce” units aren’t included in the calculation.

However, that same statement boasts how a third of the total 639 units are “affordable housing,” which can only be true if the “workforce” units ARE included in the calculation. You cannot have your cake and eat it too, DMPED.

You can't have your cake and eat it too... unless there's another cake we don't know about

You can’t have your cake and eat it too… unless there’s another cake we don’t know about

In any other situation, us housing advocates would be quite pleased to have 20% of a development’s units at less than 60% of AMI- because that’s about double what Inclusionary Zoning rules require- and us housing advocates are conditioned to accept whatever pieces of success we’re given.

manna.oliver

However, let us not forget that much of The Wharf came from the selling of public land by the district. WAMU’s story in 2013 revealed that the publicly-owned land valued at $95 million was sold to Paramount Development Corporation for *drumroll* $1.

manna.shock

Yes, you heard that right. $1. Oh yeah, plus $200 million in public subsidies and tax breaks. That is an incredibly steep price to pay for just 131 affordable units so far, one-third of which are micro-units.

Micro-Units, between 330-360 square feet

Micro-Units, between 330-360 square feet

And so, I think we are completely in the right to develop more transparency in this process and to ask why the numbers that DC’s DMPED highlights are not quite true to reality. Also, what is the point of a high percentage of affordable housing if there isn’t much housing to begin with? For a project this large, 649 units is not very much, plus the fact that there are more hotel rooms than apartment units, and so it seems to be another aspect of this development- and future developments- worthy of scrutiny.

Phase II of The Wharf is still in process, and let us all pay attention to ANY sale of public land that does not include high amounts of truly affordable housing, with opportunities to increase the equity of those DC residents who need it most.

Who’s Got Housing?

Is housing a privilege or a right?

Regardless of your opinion (it is a right), there is a NEED for housing in DC among those in plain view most easily forgotten–and a program with financial incentives to people who open their door.

How many homeless people are here in DC? 7,473 as of January 2017.

shock face

The District’s New Lease on Life program connects landlords with available units to families currently experiencing homelessness. Landlords receive a partial subsidy from DC, and the family pays the rest of the rent. The families also receive any necessary support services during their one-year lease.

The program has been incredibly successful, with participating landlord Thomas Batmen noting that, “Families exiting homelessness pose no greater risk than any other family applying for a lease.”

Monthly Landlord Outreach meetings organize folks to host meet and greets, establish risk mitigation funds to assuage landlords’ fears of losing money, and propose broader policy changes.

Mayor Muriel Bowser, DC Department of Human Services, DC Interagency Council on Homelessness and CNHED are holding a reception this Friday from 11:00 AM – 12:30 PM to talk about the New Lease on Life program.

TOPA: he-said, she-said

TOPA… where’s the cream filling?

DATA: THAT's the stuff!!!

DATA: THAT’s the stuff!!!

Something is missing in all of this talk about TOPA… data.

A hearing was held this past Thursday mulling over a change to the District’s Tenant Opportunity to Purchase Act (TOPA), which gives tenants a chance to match any offer by a third party looking to buy the tenants’ home. It’s one of DC’s best tenant protections, as well as a crucial way in which renters can become owners of their homes, and any attempt to change or weaken it is understandably met with considerable alarm.

But on Thursday, one of the most alarming things was the lack of cohesive data that either side could agree on. Data leads to facts, and facts should inform laws.

The change to TOPA currently being proposed is, on the surface, relatively minor—tenant advocates and the DC Association of Realtors (DCAR) have agreed on fixes to speed the TOPA process for single family homes, and both sides feel they’re close to reaching an agreement on tenants’ option to assign their TOPA rights to a third party (also just focusing on single family homes). However, the testimony went well beyond that, and the chair of the Council made ominous claims** towards a larger fight over TOPA.

In the hearing, Councilmember Anita Bonds (At-Large), who introduced the bill, and Chairman Phil Mendelson asked the realtors testifying from DCAR about how many successful buyouts  have occurred in their experience with cases involving TOPA.

The anecdotal remarks led to differences in the magnitude of 10x- from .5% to 5%.

Magnitudes of 10

Magnitudes of 10

The same questions posed to the legal counsel for tenants also produced questionable data. One of the tenant advocates testifying retorted that a tenant with good enough credit to execute TOPA rights isn’t seeking those in the legal counsel that were testifying at this hearing, implying that these questions about successful cases were anecdotal at best, and ridiculous to be putting on the record.

It should be noted that the metrics for which we evaluate TOPA depend on whether we define “success” as the tenants succeeding in purchasing their unit, “succeeding” at staying in their unit as a tenant, or “succeeding” by leveraging their TOPA rights so that they can see some small benefit from their displacement.

The fault is perhaps with the city for not tracking data on rental units in general, and those employing TOPA rights being an especially important aspect of that in this case. Due to obscure facts, those lobbying on both sides are putting forth data that supports their case, instead of being able to lay a factual foundation.

"I heard it through the grapevine, and I'm just about to lose my mind"

“I heard it through the grapevine, and I’m just about to lose my mind”

For the most innovative and impactful legislation that DC has to empower tenants, I am stupefied by the lack of data.

Here is an example of the data that I would like to see before changes are made:

The change to TOPA being discussed has the potential to effect _____ property owners and ______ tenants.

 

** Chairman Phil Mendelson went as far as encouraging “a flat-out exemption to single-family homes,” which was well beyond the scope of the legislative hearing

Cement the District’s commitment to affordable housing: Guarantee the HPTF

dc-rowhouses

It is time to cement the legacy of the Housing Production Trust Fund (HPTF). The housing crisis in DC has been well documented, and the issue is not going away anytime soon. The HPTF is the most powerful tool that the District has to address this crisis. It is time for the District to solidify funding for the HPTF so that we can move forward. Let us all encourage the passing of the Housing Production Trust Fund Guarantee Funding Amendment Act of 2017!

Right now, the HPTF gets most of its money from yearly budget allocations. For the past four years, the Mayor and the Council have gotten together on putting $100 million in the fund.

This investment is historic. However, it’s vulnerable to changing political will–the $100 million needs to be re-debated each and every year. What’s more, it still doesn’t meet the need that exists in DC!

That’s why this bill, introduced by Councilmember Anita Bonds (At-Large), would guarantee the HPTF’s budget at $120 million each year.

Note: People in need of equitable assistance are not to be likened to toddlers

Note: People in need of equitable assistance are not to be likened to toddlers

QUICK FACTS:

Did you know that the HPTF has been in existence since 1988? It didn’t receive significant investment until sixteen years after, in 2004 ($50 million), and didn’t have a fund balance of more than $100 million until 2013/14.

Did you know that $100 million is enough to build or preserve approximately 1,000 units?

Did you know the shortage of affordable units is in the tens of thousands? In December of last year, DC Fiscal Policy Institute reported that “26,000 extremely low-income DC households spend more than half their income on rent,” and that “only 2,100 received new help over the past six years.”

Did you know that in DC, people of color were doing economically worse in 2016 (most recent census data) than the year prior?

DC_neighborhoods_map

While there are criticisms of the HPTF, and whether it addresses those most in need, most critics and advocates agree that the fund is necessary and that it can be strengthened. Stabilizing the revenue source and guaranteeing its future can shift the focus towards managing it more effectively as we diversify our efforts.

There will be a public hearing on two bills related to the HPTF on Thursday, October 19th at 11:00 AM in the Wilson building, room 500. You can testify as an individual or as an organization, and if you cannot be there then you can send in written testimony to the Committee on Housing and Neighborhood Revitalization, John A. Wilson Building, 1350 Pennsylvania Avenue, N.W., Suite 112, Washington, D.C. 20004. The record will close at 5:00 p.m. on November 2, 2017

We’ll be at the hearing, and we hope you will too!

#GuaranteeHPTF

Ground Breaks, Rents Shake, Fears Await… Purple Line & Langley Park

Hard_Hats

The purple line is here. With it comes opportunity for homeowners – and apprehension for renters. While the jurisdictions involved have heralded the beginning of the Purple Line’s construction, these same jurisdictions and their partnering organizations have been silent about the threats to affordable housing that they previously highlighted.

Langley Park appears to be the canary in the coal mine here, as the Washington Post and GGWash have followed the lead of UMD in focusing on the effects that the Purple Line will have on the affordable housing stock there, although it should be noted that these challenges will be faced at each and every one of the proposed stations.

Langley Park does seem to be especially vulnerable to the adverse effects of rising land costs. Of more than 5,000 housing units in the neighborhood, nearly 75% are rental units. Combine this with the fact that nearly 50% of the residents earn less than the DC Metro’s Area Median Income and it appears that there’s a huge risk posed by becoming more connected to the region. purple-line All of Langley Park’s residents will be within a half-mile of the the two transit stations proposed in the area. A CASA Needs Survey found that one-in-four respondents has had their rent increasing by at least 10% per month over the past two years. A major housing crisis is certainly on the horizon. If Prince George’s County cannot protect its population from being displaced, then a complex chain reaction will be felt across the region as various jurisdictions are threatened by displaced people desperate for secure places to live.

There are plenty of ways that the local jurisdiction can mitigate the impending displacement through measures aimed to preserve and rehabilitate the housing stock by way of grants, loans, and tax credits from federal and state agencies, and with the help of private and nonprofit assistance. In the dozens of potential options that the UMD study looked into, Prince George’s County and Langley Park were under-represented seeking this help, indicating failures among leadership.

While there are many ways forward, it is noteworthy that the majority of apartment units are owned by three companies and their subsidiaries, and that intervention and/or mediation by the public or private sector could lead to a deal that would maintain affordable housing. For example, the Conversion of Rental Housing Act of 2013 would require the owners to give Maryland’s Department of Housing and Community Development the option to purchase the property before they offered the sale to another party. This legislation is not perfect, as the right is not extended to tenants and there are significant loopholes where the owner is not required to follow this process; however, the program has three priorities for implementation, and Langley Park fits all three criteria.

There are also ways in which Prince George’s County can save the carrot and use the stick in order to help out the tenants. There is a misdemeanor and $500 fine for any property in violation of the County Code, and each day is a separate offense. As noted in the UMD study, there are many complaints about the housing conditions there, and “the county has the right to demolish, repair, or otherwise bring the property up to standard and place a lien in the amount of all funds expended on the owner.” This type of initiative could put pressure on the owner to sell, or if the county bureaucracy wasn’t entirely on board then it could backfire and result in the condemnation of the building and subsequent displacement.

What is clear is that all of the paths forward require a municipality willing to assist this community under threat and allow the people to be a part of the opportunities that are to come with the Purple Line. We certainly will be paying attention.

 

  1. All of the data in this post comes directly from “Preparing for the Purple Line: Affordable Housing Strategies for Langley Park, Maryland,” presented by CASA & the National Center for Smart Growth Research and Education Center at the University of Maryland, College Park
housing

For Bipartisanship and Affordable Housing, Try MID Reform

The next contentious battle to sweep through Congress looks likely to be tax reform. Already the partisan lines are forming, with a more-than-healthy dose of special interest groups on both sides. But one area where there could be bipartisan agreement is the mortgage interest deduction. It would take serious political courage all the way around, but for the first time in decades progress is possible on one of the American tax codes most costly mistakes.

What is MID?

The mortgage interest deduction, or MID, allows homeowners to deduct interest payments on mortgages from their taxable income. (Translation: lower taxes for homeowners.) Because it’s a deduction and not a credit, it only applies to tax payers who itemize their taxes rather than taking the standard deduction. (Translation: lower taxes for upper income homeowners.)

What is it supposed to do?

With the current version coming from one of Reagan’s tax overhauls in the 1980s, MID has long enjoyed bipartisan support as a way to increase homeownership. The idea is simple—if you give people who buy a home a tax break, you’ll see more people buying homes. It was part of a broader push in the ’80s to move housing affordability into the private sector, which also included the end of building new federal public housing and the birth of the Low-Income Housing Tax Credit.

What is it actually doing?

Answer 1) Not increasing homeownership. Research has shown that while MID may convince someone to buy a bigger home, it almost never is the determining factor in whether or not someone will buy something. That’s in large part because…

Answer 2) MID mainly helps rich families. Because it just applies to tax payers who are itemizing their taxes, only half of all homeowners are able to take advantage of MID at all. And among those homeowners, a hugely disproportionate amount of the overall money goes to the top. MID is a big part of the reason that 75 percent of all federal housing subsidy actually goes to wealthy families. (It really makes you think about who those “takers” are that some on the right rail against.)

That’s why groups as diverse as the CATO Institute and the National Low-Income Housing Alliance have come together in calling for the cap on deductible mortgages to be lowered from $1 million to $500,000. The move would affect just 6 percent of all mortgage holders, but it would save a whopping $241 billion over the next decade.

The Trump Administration has also floated this plan, although it’s not clear how it will fare once the full weight of the real estate lobby comes down against it.

The path forward

Unfortunately, disagreement arises with the question of how those savings should be put to use. While affordable housing advocates would like to see the money moved to lower-income homeowners and renters, congressional Republicans are likely to want the savings applied to their larger plan of tax breaks for the wealthy and increased military spending.

Regardless of how this plays out on a national level, DC has its own version to deal with: the Homestead Deduction, which allows all DC homeowners—no matter how wealthy—to save on their property taxes. It’s another piece of subsidy for the rich that could be fixed with a simple home value limit.

As Congress looks to rewrite our tax code, it’s important to remember who the “takers” really are. With 75 percent of federal housing subsidy going to wealthy households, MID is long overdue for restructuring.

soh

DC, NYC now offering low-income tenants free legal representation

Image: Tenant rights activists rally in DC earlier this year

Eviction is just about the scariest thing that a tenant can face. It increases your risk of homelessness, poverty, and job loss. It’s more likely to happen to you if you’re a woman, if you’re black, or if you have kids. And it can set your family back for years. That’s why Washington, DC and New York City just implemented laws offering free legal services to low-income tenants facing eviction.

These laws are part of a growing movement across the country, called “civil Gideon,” to provide legal representation to tenants facing eviction. It stems from data showing that while landlords almost always have a lawyer in eviction suits, tenants almost never do. In DC, 94 percent of landlords have legal representation. That’s compared to only 5 percent of tenants.

That gap produces a huge disparity in outcomes, with tenants often being evicted over minimal debts. Sometimes it’s not even a debt tenants are unable to pay–withholding rent is a common last-straw tactic for tenants who can’t get landlords to make necessary fixes. But without a lawyer to guide them, that tactic can end in eviction.

Opponents of New York City’s law, which offers free representation to tenants making up to $50,000, complain about its cost–estimated to be about $200 million each year. But because evictions so often result in homelessness, increased reliance on safety net programs, and other costs to local governments, supporters of the bill decided to run the numbers.

They found that the measure will not only pay for itself, but it will result in over $300 million of additional savings each year. Between saving tenants strife and saving the city money, it’s hard to find a reason to oppose this bill.

The DC Council agrees, and a similar bill put forward earlier this year by Councilmember Kenyan McDuffie (Ward 5) ended up being included in this year’s budget support act. As a much smaller city, the costs for DC’s program are significantly less than in New York City–the budget included $3.9 million in ongoing funds and an additional $600,000 for this year.

Tenant groups and other advocates will be sure to watch this process closely. But with widespread support, plus clear benefits for tenants and the city coffers, DC’s new effort to get free legal representation for low-income tenants should be a great success.