“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.
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.