Mayor Vincent C. Gray is greeted Tuesday by D.C. Council member Marion Barry, a former mayor, before Gray delivered his State of the District address. (Astrid Riecken/FOR THE WASHINGTON POST)

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.

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.

He did not mention, as he did last year, the city government’s ethics woes — which include an ongoing federal investigation of Gray’s 2010 campaign that has since produced three felony guilty pleas. But he alluded repeatedly to the recent success of the area’s sports teams.

“Both our baseball and football teams had breakthrough seasons,” he said, referring to the “Washington football team” and the Nationals. “And just as these great professional teams are getting things done and making us proud, so, too, is the District of Columbia making big things happen.”

Gray committed to making progress on securing pay hikes for city employees, who have been subject to wage freezes, hiring stoppages and furloughs at various points in recent years. Rank-and-file police and firefighters have not seen contractual raises since 2006.

“Tonight, I am proposing that we make this right, by giving raises and reaching new work agreements updated to meet the demands of a 21st-century government and a 21st-century workforce,” Gray said.

He did not discuss dollar figures, but citywide raises could easily add tens of millions of dollars in yearly city spending.

Gray also announced some less costly but politically intriguing initiatives. His coming budget proposal, for instance, will include a $15 million “investment fund” for city nonprofits. The fund would make competitive grants to groups involved in arts, job training, the environment, health and other areas, replacing the D.C. Council’s previous and controversial practice of directly earmarking funds for favored groups.

Later this week, Gray said, he will appoint a task force to examine the regulatory burden on D.C. businesses and propose recommendations on making it easier to start and operate a business in the city.

He also pledged to tackle a long-recognized problem in city government — its procurement system.

Gray has seen multiple high-profile solicitations derailed in the past year by flawed procurements that led to protracted appeals. The city has moved to abandon one of them, for a standardized taxi “smart meter” that would accept credit cards.

The D.C. Taxicab Commission is instead now in the process of requiring cab owners to choose their own system. “By this summer . . . you will be able to use credit cards in every cab,” he said.

Only the affordable housing announcement won more applause.