In speech, D.C. mayor pledges investment in affordable housing, other city programs

A “prosperity dividend” from the District’s continued economic growth should be used to make investments in key city government programs, Mayor Vincent C. Gray said in his annual State of the District address Tuesday.

Gray (D) acknowledged that an expected surfeit of city revenue will, in the third year of his term, permit him for the first time to pursue significant new spending — starting with a $100 million commitment to affordable housing.

Full text: State of the District speech

See the speech text as prepared for delivery Tuesday evening.

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The pledge to create or preserve 10,000 units for seniors, government workers and other medium- and low-income residents won a standing ovation from an overflow crowd at the Sixth & I Historic Synagogue near Mount Vernon Square.

“We were once worried about the District becoming a city of haves and have-nots,” he said. “But now we are increasingly in danger of becoming a city of only haves.”

Gray did not discuss specific targets or other details pertaining to the affordable housing funding. But the $100 million, one-year commitment adds new heft to his pledges as a mayoral task force on housing prepares to make a report later this month.

The housing pledge was one of several major spending initiatives floated by Gray during his third State of the District speech — initiatives enabled by the expectation that revised revenue estimates will add hundreds of millions of dollars to the city’s bottom line.

Last week, Gray joined with Chief Financial Officer Natwar M. Gandhi in announcing a $417 million surplus for the fiscal year that ended Sept. 30. That sum, they said, would remain in reserves.

“But even though the 2012 surplus must go in the bank, the same economic forces that produced it are still at work,” Gray said.

Affordable housing was not a central issue in Gray’s 2010 mayoral campaign, as it had been for his predecessor, Adrian M. Fenty (D), who had campaigned on creating or preserving 11,000 units under his tenure. But population growth and lagging supply have pushed costs ever higher, and attendees of a Gray-hosted “citizen summit” last year identified housing as their top priority.

Gray’s commitment won cautious plaudits from affordable housing advocates and the lawmakers who will have to appropriate the funds.

Elizabeth Falcon, an organizer for the Housing for All nonprofit coalition, said that the 10,000-unit goal was a good one but that ongoing funding will be needed to achieve it. “That’s going to take more than $100 million to accomplish,” she said. “But $100 million is a good investment toward that goal.”

D.C. Council member Muriel Bowser (D-Ward 4), chair of the economic development committee and a potential mayoral candidate, said the Gray administration in recent years used about $40 million from a key affordable housing fund for a rent supplement program.

“We have to get out of the hole they created,” she said. “But the aspiration of committing to 10,000 units is definitely a good thing.”

The spending initiatives were announced toward the end of a 6,000-word speech in which Gray touted progress in economic development, public safety, jobs and education.