Anthony Williams, as mayor of Washington, had a problem. Residents had been fleeing for the suburbs for more than 50 years. By 2000, the District had lost one-third of its population from its peak in the 1940s. Fewer people meant fewer property-tax payers. Every departure meant more money drained from the city budget.
Williams turned to Alice Rivlin, a former top White House budget official, and they formulated an audacious goal: to increase the District’s population by 100,000.
“I thought, well, that’s a nice round number,” Rivlin said. “At some point I went to Tony and said, ‘Well, what do you think of that?’ And he said, ‘Well, it’s a good goal.’ It was no more researched than that.”
Critics rolled their eyes. The District’s schools were a mess, its murder rate was near the highest in the nation, and its neighborhoods were littered with vacant homes. Why would people want to live here?
But surprisingly – through a combination of local efforts and larger economic forces – last year that mark was achieved: the District’s population swelled to 672,228, or 100,000 more people than in 2000.
The growth ignited a construction boom that revived neighborhoods and generated billions of dollars of tax revenue that enabled investments in schools, Nationals Park, a convention center, a streetcar line and splashy new parks. “The money that we are using to rebuild our schools, where did it come from? It didn’t come from outer space,” Williams said. “It basically came from this economy, that allowed us to build the schools, to build the libraries.”
Now the city faces a different sort of problem: Along the way, it became one of the most expensive places in America to live.
In 2000, the median home value in Northwest D.C. was $136,200, or $150 per square foot. Today it’s more than triple that: $484,000, or $533 per square foot.
Renting in the District has become prohibitively costly for anyone not working a white-collar job, a phenomenon mirrored in New York, San Francisco, Oakland and Seattle. A District household now needs to make $119,000 annually to comfortably afford a two-bedroom apartment, according to a recent study.
Those costs have limited the housing options available to people at nearly every income level in the city. “Affordable housing” in Washington is no longer a poor people’s issue. It is a middle-class issue, a senior citizen issue, a young-worker issue and a family issue.
While childless, single and usually white residents continue to arrive, thousands of middle-class households, families and African American residents leave each year for less expensive digs in the suburbs or other cities.
Washington’s boom in apartment construction added 37,267 new units from 2013 to 2015. But apartments that lower-income residents could afford have been replaced by the thousands with smaller, luxury units costing well in excess of $2,000 a month. D.C. estimates 5,000 families are teetering on the brink of homelessness at any time
Some residents who were just hanging on to a place aren’t any longer, and the number of homeless families spiked.
“Almost all of the new construction that is happening in big cities around the country is aimed at the highest end of the rental market, and that’s certainly the case in D.C.,” said Stockton Williams, executive director of the Terwilliger Center for Housing at the Urban Land Institute. “The worsening affordability problem is no longer just facing those in lower-income housing.”
It’s up to Mayor Muriel E. Bowser to find solutions.
Bowser is betting hundreds of millions of dollars and her entire economic agenda on the idea that her government can supply so many housing units sheltered from market forces that residents’ fear of being priced out will subside.
During her campaign, Bowser made a commitment to put $100 million into the city’s affordable-housing fund every year.
What does $100 million a year get you? For the five-year period through 2017, the year before Bowser goes up for reelection, the District is on pace to in total spend nearly $1 billion on an array of affordability initiatives. And the problem is getting worse.
Top concern of residents
Aside from the 100,000 new residents, the growth in Washington isn’t at all what Williams envisioned. And by the time Bowser took office in 2015, the crunch felt by low-income and often black residents had escalated, and the pain was in plain view.
Williams imagined that about half of new households would be families; in reality, few families have moved to the District. Since 2000, the District has added a net of 44,000 households of adults under 35 with no kids (millennials), 27,000 households with adults over 55 and no kids (empty-nesters) and just 3,000 households with children.
By 2010, adults between 18 and 34 – most of them white – made up 35 percent of the population, compared with 23 percent nationally, according to the Urban Institute. Meanwhile, the population of black residents dropped.
“D.C. got caught off guard,” said Erika Poethig, a former federal housing official now at the Urban Institute. “It did not act fast enough to acquire and preserve properties and dedicate resources when it was more affordable to do so within certain neighborhoods and parts of the city. So it lost a lot of low-cost rental stock that could probably have been preserved.”
At a citywide town hall meeting held by Bowser’s predecessor, Vincent C. Gray, residents raised housing costs as their No. 1 concern – topping schools and crime.
“That really was an inflection point,” said David Bowers, vice president of Enterprise Community Partners, a housing advocacy group. “There were a lot of [advocates] that had been going for years asking for more money for housing. Then, at that point, people realized it really was a citywide concern.”
When she entered office last year, Bowser joined a small cadre of big-city mayors in a similar position – scrambling to respond to a wave of real estate money enveloping their neighborhoods.
Under Mayor Bill de Blasio, New York City overhauled its affordable-housing policies this spring. San Francisco moved so aggressively to house low-income residents that federal officials deemed the effort a violation of anti-discrimination rules.
Bowser said she considers affordable housing the centerpiece of her economic development efforts but said she does not want to tip the boat and turn off investors.
“Everybody recognizes that markets will have their impact on housing. And everybody recognizes that what we do in our city to attract people and our businesses – we’re not going to stop. Our prosperity allows us to invest in schools and services,” she said. “No mayor can tell you that they can make the cost of housing go down. … But we can stand in the breach and produce
more affordable units.”
Bowser said she made the $100 million commitment because she grew “uncomfortable” in previous years when the District’s Housing Production Trust Fund fell below that level. The pledge draws rave reviews from housing experts.
Said Williams, of the Terwilliger Center: “Mayor Bowser is absolutely at the forefront of local officials in the country in terms of addressing this issue. That $100 million – that’s one of the most substantial local commitments to a housing trust fund anywhere.”
A commitment to the mission
Bowser is sometimes viewed warily, however, for her connections to the real estate industry. She raised more campaign contributions from real estate firms than the other candidates. Industry supporters helped create a $300,000 political action committee to back her before shutting it down after questions were raised about her independence from donors.
The abrupt resignation of her chief property management official last month prompted an inquiry from the D.C. Council.
But when Bowser came into office with the $100 million commitment for the Housing Production Trust Fund, she hired someone with advocacy bona fides. Polly Donaldson first took an interest in D.C. housing as a volunteer through her church in the 1990s. For more than a decade she headed an advocacy group that frequently pressed the D.C. Council for more housing funds.
Donaldson’s appointment “signaled that there was going to be a real commitment to the mission,” said Bowers, of Enterprise.
Bowser instructed her top economic aide, Deputy Mayor Brian Kenner, to deliver affordable-housing units with every deal he did. Above the entrance to Kenner’s office suite – through which any developer must walk in search of a deal – an electronic marquee displays the latest tallies of affordable units, like a scrolling report card of his work.
In seeking projects, Donaldson outlined her priorities by offering more points to projects that provided housing for the elderly, families or the homeless, and to those located in parts of the city that had grown prohibitively expensive.
Soon, the fruits of the first $100 million commitment will be on display, city officials say. Donaldson received $178 million in requests, and in January her team set aside $82 million for 12 projects that could save or create 804 housing units in five wards. The majority, 466 units, are in buildings that will be renovated and offered at below-market rents. The District will pay $84,898 per preserved unit and $126,117 per newly built unit. The rest of the $100 million will go toward administrative costs and support services.
Housing advocates have criticized the mayor for not being more aggressive in changing other housing policies, particularly the Inclusionary Zoning rule that requires affordable units in most new private-sector buildings. They would like to see more units created for the lowest-income renters.
Cheryl Cort, an advocate for the Coalition for Smarter Growth, called Bowser’s final position “too conservative.” Claire Zippel of the D.C. Fiscal Policy Institute said “it was a little perplexing to see the administration support an option that clearly didn’t provide a greater level of affordability.”
Although the Zoning Commission sided against the mayor, Bowser says the program was “kind of sold as this silver bullet and it could never live up to that.”
“It’s not really a great tool to create housing [serving the poorest renters]. It’s best used in the middle,” she said. “Some of the advocates want to sell it as the answer to everything. It isn’t. So we have to move forward with something that is realistic.”
She also said part of her job was not taking for granted the flow of new residents Williams yearned for 15 years ago: “We’ve been that city, where they’re fleeing, and we’re not going to go back.”\
Follow Jonathan O’Connell on Twitter: @oconnellpostbiz