In the fiscal year that began last week, the D.C. Council and the mayor worked together to allocate more than $100 million to the Housing Production Trust Fund. It's a good start, but it's not nearly enough to produce the units we need — up to 45,000 according to the Urban Institute. If we are serious about producing the affordable housing we need, we must use all of the tools at our disposal.
Increasingly expensive housing costs are hurting the District. Seniors cannot age in place. Young couples are postponing children or moving out. Working families are paying more than 50 percent of their income on rent alone. Ward 1, which includes some of the hottest real estate markets in the region, is the most diverse ward in the District, but it won't stay that way without action on affordability.
Luckily, the Housing Production Trust Fund is not the only tool we have. Increased funding in this year's budget for the Local Rent Supplement Program will provide vouchers for low-income families to move into existing apartments. The Tenant Opportunity to Purchase Act, while not perfect, preserves affordability across the District. And the Department of Housing and Community Development is set to offer its first regulations on the District Opportunity to Purchase Act, which allows the District to purchase affordable properties before they flip to market rate. The law, the first of its kind in the nation, was passed seven years ago but has never been used. Its implementation is long overdue.
Even so, the District will never have enough money to meet the need via construction and acquisition alone, which is why we are turning to the untapped value of our vacant, publicly owned land. Last year, the council enacted a law that requires 20 percent of all housing produced on public land to be affordable, or 30 percent if it is near Metro. Just last month, the first land disposition compliant with that new law was approved unanimously by the council.
Land at 965 Florida Avenue, in Ward 1, stood vacant for decades. When the Gray administration moved to develop the site, it initially selected a proposal without a grocery store. After community input, the administration revised the design to include a grocery store and 65 affordable housing units.
The Bowser administration revisited the deal, implementing the new affordable housing law. The result is 106 affordable housing units for residents with low and very low incomes, 246 market-rate units, 270 permanent jobs, a grocery store, funds for a business incubator in partnership with Howard University and a $200,000 community grant for job readiness and youth enrichment.
How did we get there? Instead of using taxpayer dollars, the District discounted the value of the land in exchange for expenditures on public benefits by the developer. The project is supported by the nonpartisan, nonprofit DC Fiscal Policy Institute and the Coalition for Smarter Growth.
Some were critical of the project. Just at the time when the Council would have typically voted to approve the project, Chairman Phil Mendelson (D) called for his own independent appraisal, despite a two-year negotiating process that had already yielded affordable housing and job-creation priorities on which the council and mayor agree. The chairman’s appraisal offered a best-case scenario and showed a $5 million difference from the final price, largely because it had the benefit of hindsight and didn’t reflect the realities of an extended two-year negotiation process that involved three project iterations spanning two mayoral administrations and strong community participation.
Negotiation is critical to getting the best deal. The mayor has to have the ability to work with a private developer to create incentives to get much-needed affordability and job growth.
Taken as a whole, this project is a win for the people of Ward 1 and for the District.
The chairman and I agree that the council needs better information and a more structured process to effectively review future deals. Together we have introduced the Land Disposition Transparency Act of 2015, a bill that requires quarterly reports about land deals be published online, makes executed agreements available to the public and requires the mayor to provide the council with more details. It will have a public hearing on Oct. 8.
With a housing crisis on our hands, it’s time to get real about what it takes to build affordable housing. If we are serious about producing the housing we need over the next decade, we must leverage all of our assets. That includes negotiating over land value. And we all need to get on board to make that happen.
The writer, a Democrat, represents Ward 1 on the D.C. Council.
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