To address a pressing need for affordable housing in the city, the District government needs to commit more tax dollars and create new investment vehicles while streamlining incentive and permitting processes, a mayoral task force has concluded.
Mayor Vincent C. Gray (D) appointed the task force more than a year ago, weeks after the 1,800 attendees of a mayoral citizens summit said affordable housing should be the top priority for city government. In his State of the District address last month, Gray committed $100 million for affordable housing, and the report is expected to guide his efforts.
At the rollout of the panel’s report Tuesday, Gray offered general support for the task force’s key goal of creating or preserving 10,000 affordable units by 2020 but did not specifically commit to any of its recommendations. “We’ll talk more about that over the next few weeks,” he said.
A variety of data suggests that the District does not have enough affordable housing. A 2010 study by regional market research firm Delta Associates found that 42 percent of city households spend more than 30 percent of their income on housing. Meanwhile, tens of thousands are waiting for public housing units or federal rent vouchers, and scores of homeless families have crowded the city’s last-resort shelter.
“It is clear that there is substantial demand for all types of housing needs: working families deciding to remain in the District to raise their children, older households often aging in place, young singles and couples entering the market for the first time and long term residents who continue to experience economic challenges,” the report said.
The task force — chaired by Harry D. Sewell, director of the D.C. Housing Finance Agency, and real estate developer Deborah Ratner Salzberg, the chief executive of Forest City Washington — proposes to address that demand in ways that vary in ambition, feasibility and price.
The panel’s key recommendation is to beef up the commitment to the Affordable Housing Trust Fund, the District government’s main vehicle for low-income real estate development.
The fund, which offers loans and grants to developers, is funded by a portion of taxes levied on large real estate transactions. When dealmaking stagnated during the national economic slowdown, the fund was starved of revenue and what remained was tapped for another key housing need, rent supplement vouchers.
The task force recommends not only pumping new revenue into the fund — which is where the bulk of Gray’s $100 million commitment is likely to go — but also restructuring its revenue sources so it receives a base level of funding regardless of real estate market activity. The report also suggests creating a new “housing innovation fund” that could fulfill a number of unmet financing needs.
The report did not identify an overall level of funding sufficient to meet the 10,000-unit goal, but Sewell said the overall city investment would have to be between $500 million and $1 billion, depending on levels of federal support.
Another set of recommendations would make it easier for developers to build housing by expediting permits for affordable buildings and waiving the associated fees. And rather than present projects to an alphabet soup of city agencies for financing, the panel suggests creating “one-pitch meetings” for developers.
Other proposals could dramatically change how the city gives tax incentives to affordable housing projects. Currently, the D.C. Council grants abatements on a case-by-case basis, but the task force suggests the District adopt a system used in several cities where developers automatically qualify for tax breaks if their projects meet certain affordability standards. Another proposal would create a local version of a popular federal program that offers income tax credits to investors in affordable housing projects.
More modest proposals would establish a “housing investment council” to oversee and evaluate implementation of the new strategy. Others would encourage housing complexes to hire their own needy residents for on-site jobs, foster more “wrap-around” social services for low-income residents and create a government database of affordable housing units.
Robert Pohlman, executive director of the D.C.-based Coalition for Nonprofit Housing and Economic Development and a task force member, said he felt that it was particularly important that Gray create the permanent housing council to monitor the city’s efforts.
“You’re going to come down to the dollars in the end,” he said. “But commitments and goals are important, too.”
Oramenta F. Newsome, executive director of the local office of Local Initiatives Support Corp., a nonprofit community developer, said having advocates, developers, financiers and government officials come together was valuable — particularly in light of Gray’s $100 million commitment.
“It’s the motivation for everyone to get their act together,” she said.