Gray Alters Fenty's Plans for Tax Bonus
Allocation of Funds For Housing at Issue

By David Nakamura and Nikita Stewart
Washington Post Staff Writers
Friday, December 14, 2007

D.C. Council Chairman Vincent C. Gray is challenging Mayor Adrian M. Fenty's approach to spending nearly $50 million in surplus tax revenue, saying that most of the money should go to an affordable housing trust fund rather than a one-time payout to help create units for homeless residents.

City finance officials said last week that they expect to collect the excess money because of higher-than-predicted property tax revenue for the first quarter of fiscal 2008. Fenty (D) proposed spending $47 million to kick-start a program that would provide 400 housing units and social services for the chronically homeless and 100 units for homeless families.

But Gray (D) revised the plan yesterday, proposing to put $30 million in the Housing Production Trust Fund and divide the rest among social services for the homeless, youths and prenatal care.

Fenty's aides said the mayor opposes the change because he wants to provide housing and social services for the homeless. That plan is part of a broader commitment to the Washington Interfaith Network to increase affordable housing units. Network leaders hailed the mayor's announcement last week.

But Gray expressed concern that Fenty's plan, funded by unexpected tax revenue, might lack money in the future if the property market cools and the city's revenue tapers off. The Housing Production Trust Fund, with a dedicated stream of revenue from city taxes, secures money for construction bonds that pay for housing units.

Council member Kwame R. Brown (D-At Large) said he had received calls and e-mails from housing advocates expressing worry that Gray's plan would wipe away that funding. "The money is still going to be used for the same objective," he said. "The money is not gone."

Martin Trimble, an organizer with the Interfaith Network, declined to comment last night, saying that he had not seen Gray's proposal.

Eric Goulet, the council's budget director, said that Gray's plan would put housing in the hands of the trust fund and that Fenty's would put the Department of Human Services in charge.

"DHS doesn't have experience in delivering housing," he said. "The housing production trust fund is where the experience lies in housing."

Gray said in an interview last night that he devised the alternative because he doesn't think Human Services is suited for the job.

"Who is best structured to do this?" Gray asked.