Last month, Don Peebles, the millionaire real estate magnate, came to D.C. in search of relief.

Previous mayor Vincent Gray had chosen Peebles to build a high-end hotel and condo complex on District-owned property near Mount Vernon Square so long as Peebles built 61 affordable units on land he owns in Anacostia.

However, an historic preservation ruling led Peebles to believe he would only be allowed to build about 40 units on the site. In a meeting at city hall offices, Peebles and his 22-year-old son Donahue, who manages the project, inquired about whether that might suffice.

The answer from D.C. Mayor Muriel Bowser: You made a deal for 61 units, build us 61 units.

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Prior mayors might have offered a different response. In previous years, D.C. officials have been willing to bend on affordable housing requirements if doing so helped a project along. D.C. rolled back affordability requirements on the Southwest Waterfront project, for instance, as that project’s developers were in search of financing.

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That does not appear to the be the case with Bowser, who has committed to spending $100 million annually to add or preserve less expensive units. Bowser’s deputy mayor for planning and economic development, Brian Kenner, said in a recent interview that developers working with the city were going to have to make necessary adjustments.

“I don’t care whether you’re a developer who is used to building luxury buildings. If you are going to build on this city’s land, under this administration, you’re going to build affordable units,” Kenner said.

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“When they walk into a transaction they have a calculation that says they have a certain hurdle, a certain return rate that they’ve got to make,” Kenner added. “Well, we have a concept of what we think the land is worth and some of the public policy goals we plan to accomplish.”

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Peebles, who has publicly criticized — and proposed running against — both former D.C. mayor Adrian Fenty and current New York City Mayor Bill de Blasio, said Thursday he is now committed to meeting the 61-unit requirement for the project.

“The city is clear they want to maximize their affordable housing needs. And we want to do what we said we would do,” he said in an interview. 

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Peebles’ original plan would put the subsidized units in a low-income area of Southeast while a booming downtown area of Northwest, at the corner of 5th and I streets, gets a 175-room SLS Lux Hotel.

After it was announced, the off-site housing plan prompted protests from Anacostia residents, and the D.C. Council passed a new law effectively banning it.

“To not leverage the opportunity for affordable housing there is just a lost opportunity,” said Erika Poethig, a former federal housing official now at the Urban Institute. “If we want to enable people to climb that income ladder, that mobility ladder, that American dream that we aspire to, we know that where you live plays a big part in your ability to do that.”

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David Bowers, an executive with Enterprise Community Partners, a housing advocacy group, said that “to the extent we can, when we think about housing and connecting people to greater opportunity and amenities it really does behoove us as often as we can to make sure the affordability is on site.”

Peebles, well-known for building luxury properties in Miami Beach, hired a separate company to build the affordable units, District-based Dantes Partners. He said he has not determined how or where he will build the affordable units but said “we’re big supporters of affordable housing.”

An agreement needs to be completed or extended by the end of the year.

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“At the end of the day I think we will get to a place that meets the needs of both the development team and the District residents,” said mayoral spokesman Joaquin McPeek.

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But unhappiness with the off-site housing arrangement still stings in Anacostia and some aren’t convinced things are any different under this mayor.

“A healthy city mixes luxury housing and hospitality with affordable housing,” said Andrew Linn, an architect who lives in Anacostia. “The city owns the 5th & I lot — if they were serious about building as much affordable housing in D.C. as possible, they would build a 100 percent affordable unit building there. But this administration, like most in D.C.’s history, is serious about concentrating subsidized housing in Wards 7 and 8 [east of the Anacostia River] and making as much money as possible downtown.”

Follow Jonathan O’Connell on Twitter: @oconnellpostbiz

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