A zero percent windfall and a potential profit opportunity, the bifurcated option is a no brainer for the city. Also, access to equity in homeownership and the generating of wealth are essential components to developing underserved communities. Today, Councilmember Anita Bonds introduced the Affordable Homeownership Preservation and Equity Accumulation Amendment Act of 2013, a piece of legislation that affects homeownership projects that use the Housing Production Trust Fund. This act 1) uses a recapture model that recycles the subsidies given to the LMI (low-to moderate income) homebuyer, and 2) lowers the resale restriction on ownership properties in distressed areas from fifteen to five years. After the restricted period, if an owner takes out an equity loan or resells, the subsidized money, and potentially more, is added back into the Trust Fund pool to develop more homes. Although there is no perfect measure, the Bifurcated option provides the best opportunity for the generating of wealth and development. Councilmember Bonds used a perfect example to summarize the practicality of this measure: If someone with a three year old child purchases a home developed using the Housing Production Trust Fund, their child will be eighteen, a high school graduate, before the resale restriction is lifted and built equity can be tapped into. She also stated that the national average for a homeowner staying in a home is five to seven years.
1) Recognizes that there are different neighborhoods in DC, and therefore different dynamics for affordable homeownership development and purchase.
2) Preserves affordable housing through maintaining 15 year resale restrictions in non-distressed areas and creating 5 year restrictions in distressed areas.
3) Rewards homebuyers who take the risk of purchasing in distressed neighborhoods.
4) Promotes commercial and residential investment in distressed neighborhoods by not artificially depressing prices.
5) Helps affordable homeownership developers not go into long-term debt because of unsold property in distressed neighborhoods.
6) Contributes to future affordable housing development through subsidy recapture
During today’s council meeting, Councilmember McDuffie also introduced a bill that would require 20-30% affordable housing be set asides on all public lands sold for residential development.