Trust Fund Makes Headway, Report Says

By Robert E. Pierre
Washington Post Staff Writer
Friday, April 20, 2007

After a surge in housing prices throughout the region, political leaders have been inundated with pleas to preserve and create affordable housing.

But one program in the District, the Housing Production Trust Fund, already is effectively, if slowly, delivering affordable rental and ownership units, according to an independent review released yesterday by two nonprofit groups.

Since 2001, more than 5,000 units have been completed or authorized because of support from the fund. Most of the units are rentals, and nearly 600 of those have been set aside for the elderly or residents with special needs.

It's a fraction of what's needed, said Bob Pohlman, executive director of the Coalition for Nonprofit Housing and Economic Development, which sponsored the report with the D.C. Fiscal Policy Institute. City leaders for years have acknowledged that demand for units affordable to people working at or near minimum wage outstrips availability by 2 to 1.

"We don't want people to think nothing is happening," Pohlman said. "It may be too slow, but it is happening."

The trust fund provides direct subsidies to developers to set aside units or, in some cases, entire buildings that they rent or sell for less than market rates. The developers must agree that rental units will remain affordable for 40 years and ownership units for 15 years.

The fund was established in the late 1980s but did not receive significant money until fiscal 2001, when the D.C. Council dedicated a portion of deed and recordation taxes to it. The fund has $88 million in it. It is required to devote 40 percent of its expenditures to those with very low incomes, particularly families of four earning less than $28,350 a year, which is 30 percent of the area's median income.

Units made possible by the fund have been built in every ward except Ward 3, which includes Georgetown. Nearly three-fifths of units built or in the pipeline are east of the Anacostia River. Such groups as SOME Inc., for So Others Might Eat, said the fund -- with its stable revenue source -- enables nonprofits to work on projects that developers would not undertake.

All of SOME's rental units have live-in managers and case management services to provide support to tenants.

"It really is the most efficient way to serve that population, the combination of housing and supportive services," said Ken Ellison, SOME's senior housing adviser. "It can never be a for-profit business."

The faith-based group started out as a soup kitchen but now deals with substance abuse, adult day care, employment services and, increasingly, housing.

SOME plans to build 1,000 units during the next several years. Three hundred are in the pipeline through the District's housing trust fund.

With deed and recordation taxes leveling off along with property values, advocates are trying to persuade city leaders to find more money.

The fund, which received $50 million in fiscal 2004, is projected to receive nearly $58 million in this fiscal year. That is far below previous projections.

"It's not going to grow as healthy as it has been growing," said Angie Rodgers of the D.C. Fiscal Policy Institute.

© 2007 The Washington Post Company