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Grosso proposes tax credit to expand affordable housing

For Immediate Release: 
May 16, 2017
 
Contact:
Matthew Nocella, (202) 724-8105

Grosso proposes tax credit to expand affordable housing

Washington, D.C. – Councilmember David Grosso today introduced the Community Impact Investment Tax Credit Act of 2017 to spur the creation and preservation of more affordable housing in the District of Columbia.

The legislation encourages impact investments—investments made to solve social, environmental, or infrastructural challenges while yielding a financial return—in affordable housing through community development financial institutions (CDFIs) by providing to investors an income tax credit of up to 33 percent.

 “The affordable housing crisis will not be solved overnight, nor by any singular entity. Using every financing tool and partner is essential,” Grosso said.  “Through this legislation, we will continue the city’s affordable housing initiatives and multiply our public resources by promoting private investment to create more homes that D.C. residents can afford.”

While the city has made historic investment into the Housing Production Trust Fund, additional dollars are harder to come by as D.C. balances investments in other priorities such as education and city services. The bill would leverage public investment of up to $1 million in tax credits to provide $3 million for affordable housing.

“It is clear investors want to support affordable housing,” Grosso said.  “In just the last year, a local CDFI, Enterprise Community Partners, has been able to raise $11 million in impact capital to finance the preservation and production of local affordable homes. We can make that impact even greater by incentivizing this type of investment.”

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Community Impact Investment Tax Credit Act of 2017

Community Impact Investment Tax Credit Act of 2017

Introduced: May 16, 2017

Co-introducers: Councilmembers Anita Bonds, Elissa Silverman, Robert White, and Charles Allen

Summary: To amend Title 47 of the District of Columbia Official Code to establish a tax credit program for local community development financial institutions to spur the creation of more affordable housing.

Two-Pager

Councilmember Grosso's Introduction Statement:

Across the country, the shortage of affordable housing serves as a significant impediment to the improvement of quality of life and economic competitiveness.  According to a report published by the National Low-Income Housing Coalition last year, there is not a single state in the U.S. where a minimum wage employee working full-time can reasonably afford a one-bedroom apartment at fair market rent.

Here in the District of Columbia, rents have risen by almost 30 percent over the past 10 years.  While the city has made historic investments into the Housing Production Trust Fund, meeting the actual affordable housing demand would require an investment of around $5 billion according to the D.C. Fiscal Policy Institute; a figure that is untenable to achieve while still investing in other needs and priorities.

That is why today along with my colleagues, Councilmembers Robert White, Elissa Silverman, and Charles Allen, I am introducing the Community Impact Investment Tax Credit Act of 2017.

This legislation establishes a tax credit program for taxpayers making an impact investment through a community development financial institution or CDFI, to spur the creation and preservation of more affordable housing.  

Under the bill, individuals, corporations and foundations—stakeholders that may not otherwise directly invest in affordable housing efforts, will be eligible to claim as a credit against their District income taxes, unincorporated business franchise taxes or corporation franchise taxes, 33 percent of their investment up to $1 million.

Impact investments serve to encourage responsible investing by mobilizing capital into mission-oriented entities that strive to make a positive impact in areas presenting social, environmental or infrastructural challenges while yielding a financial return. 

Through this legislation we will accomplish the public policy goal of expanding affordable housing across the city by leveraging the private market to seed investments in affordable housing production and preservation.  

Since just last year, Enterprise Community Partners, a local CDFI has been able to raise $11 million in impact capital to finance the preservation and production of local affordable homes.

Their ability to raise this amount of capital in less than a year demonstrates investor demand to support affordable housing.  Unfortunately, we currently lack tax benefits and incentives for this sort of investment, which serves as a barrier to attracting many people that may be interested in making an investment of this kind.

Solving the affordable housing crisis is not something that will occur overnight and is not something that can be accomplished by any one entity or organization; however, through this legislation we will add another financing tool to the arsenal and partner with the private market to expand the amount of debt capital available for affordable housing projects.
 

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Grosso sends letter to Department of Human Services about winter homeless plan

Now that hypothermia season is in full swing, Councilmember Grosso sent this letter to the D.C. Department of Human Services for an update on the plans and budgeting for supporting the homeless this winter. Keeping an eye on agency expenditures and performance--such as the $8.75 million the Council allocated for homeless services in fiscal year 2015--is critical to the Council's oversight of the D.C. government.

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Grosso Proposes Creating Separate Council Committee For Housing

By Sarah Anne Hughes, September 3, 2014, DCist.com

Councilmember David Grosso has proposed creating a separate Council committee for housing, saying it's "an important issue separate and apart from economic development."

"Regardless of changes in political leadership, creating and maintaining affordable housing in the District of Columbia must always be a top priority," Grosso and his legislative assistant Katrina Forrest said today in a blog post. "For this to happen, we must be willing to candidly discuss past policy failures, to improve on existing policies and to create better policies moving forward. ... D.C. has seen numerous housing initiatives started and stalled over the years. This reality necessitates a need for a comprehensive look at our housing policies and strategies to ensure that all D.C. residents have access to quality affordable housing."

The recommendation, one of several released today by the At-Large Councilmember, would remove housing oversight from the Committee on Economic Development, which is currently chaired by Ward 4 Councilmember Muriel Bowser.

"Creating a standalone Committee on Housing and Community Development will provide greater oversight of all housing related agencies including the Department of Housing & Community Development (DHCD), the District Housing Finance Agency (DCHFA), the District Housing Authority (DCHA) and others to ensure performance goals are being met and the creation and preservation of affordable housing is a top priority that is in line with all of the city’s housing strategies," Grosso and Forrest write. "Additionally, important aspects of the agencies responsible for providing services to the homeless will fall under the purview of this committee to ensure that the full spectrum of housing issues, from homelessness to homeownership, are prioritized.

Grosso's chief of staff says the Councilmember has not discussed the idea with Bowser or Council Chair Phil Mendelson. Request for comment from Bowser's office was not immediately returned.

Other recommendations include building a public housing database, as well as fee waivers and reductions for affordable housing development.

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Grosso Makes Housing Strategy Recommendations

Washington D.C. -- Today, Councilmember David Grosso (I-At Large) issued a comprehensive list of new strategy recommendations to address the affordable housing and homelessness crisis in the District of Columbia. Grosso and staff devoted the summer months to taking a close look at existing affordable housing initiatives and published two blog posts focusing on the correlating factors that impact housing and homelessness.

"Preserving and creating affordable housing are major steps in addressing the homelessness crisis in D.C.," said Grosso. "Without a comprehensive housing plan, we will continue to revisit this issue. I have proposed a list of new strategies that I believe the District of Columbia government should begin working on within the next 12 months. I thank the advocacy groups that flood Council offices advocating for investments in the annual budget to tackle the homelessness issue. The next step is for city officials to enhance the wrap around services for homeless individuals and families and for anyone at risk of becoming homeless."

Grosso's strategy recommendations include: 1) Creation of a standalone Committee on Housing and Community Development; 2) Convening of a Housing Policy Council to discuss strategic housing plans and evaluate new trends; 3) Stabilization of the Housing Production Trust Fund with annual commitments for financing the construction of new housing, rehabilitation or preservation of housing; 4) Creation of a Low-Income Housing Tax Credit; 5) Establishment of a fast-track permitting process at the Department of Consumer and Regulatory Affairs for the renovation or creation of affordable housing; 6) Investment in financial literacy programs that educate residents on budget and debt management, homebuyer education and foreclosure prevention; 7) Comprehensive approach to addressing homelessness crisis; 8) Creation of a centralized housing database; 9) Overhaul of existing agency performance measures; and 10) Establishment of a D.C. Housing Land Trust.

For the full list of recommendations click here.

View the first and second blog posts in the series.

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Affordable Housing Policy: From Homelessness to Homeownership

Part 3 of the New Neighbors:  A Three Part Series

By:  Councilmember David Grosso & Katrina Forrest

Access to housing is a fundamental human right.  Like clean air and water, everyone deserves a habitable dwelling to ensure personal safety, shelter and peace of mind. This view should not be subject to change.  Regardless of changes in political leadership, creating and maintaining affordable housing in the District of Columbia must always be a top priority.  For this to happen, we must be willing to candidly discuss past policy failures, to improve on existing policies and to create better policies moving forward.  As was discussed in the previous blog post, D.C. has seen numerous housing initiatives started and stalled over the years. This reality necessitates a need for a comprehensive look at our housing policies and strategies to ensure that all D.C. residents have access to quality affordable housing. 

Below is a list of recommendations that we believe the District of Columbia government should begin working on within the next twelve months. These recommendations are not intended to be comprehensive and we encourage any and all feedback, comments, questions and suggestions.  Many of these recommendations are nationally identified best practices, some were included in Mayor Gray’s affordable housing plan released last year, and others are new strategies.

 

 1.      Create standalone Committee on Housing and Community Development at the D.C. Council.

Housing is an important issue separate and apart from economic development. Creating a standalone Committee on Housing and Community Development will provide greater oversight of all housing related agencies including the Department of Housing & Community Development (DHCD), the District Housing Finance Agency (DCHFA), the District Housing Authority (DCHA) and others to ensure performance goals are being met and the creation and preservation of affordable housing is a top priority that is in line with all of the city’s housing strategies. Additionally, important aspects of the agencies responsible for providing services to the homeless will fall under the purview of this committee to ensure that the full spectrum of housing issues, from homelessness to homeownership, are prioritized.

 

2.      Convene a Housing Policy Council.

The Housing Policy Council should consist of agency directors from DHCD, DCHFA, DCHA, Department of Behavioral Health (DBH), Office of Planning (OP), Office of Zoning (OZ), Department of Human Services (DHS), Department of General Services (DGS), the Office on Aging, nonprofit organizations, local banking institutions and other lenders, developers, and community residents.  The Housing Policy Council will examine the District’s regulatory and policy framework, identify redundancies; gather data about the District’s programs and how they have performed; and, finally, prepare a report offering recommendations.  Every two years the Housing Policy Council will reconvene to evaluate the District’s comprehensive housing strategy and assess current needs based on the District’s housing market and consider initiatives happening around the country.  The Housing Council should also establish an annual interagency symposium with all interested D.C. agencies and other stakeholders to discuss their strategic plans as they relate to housing and evaluate new housing trends.  This will encourage stronger collaboration and coordination.

 

3.      Stabilize the Housing Production Trust Fund with annual commitments.

The Housing Production Trust Fund (HPTF) is used to provide pre-development loans for non-profit and for-profit housing developers, grants for architectural designs for adaptive re-use, loans for first-effort model projects, financing for the construction of new housing or rehabilitation or preservation, financing for site acquisition, loans or grants to finance on-site child development facilities and more. We must commit to providing, at a minimum, $80 million a year to the HPTF so that we are not solely relying on deed recordation and transfer taxes, which can make funding the HPTF volatile due to the fluctuation of the real estate market in any given year.  Additionally, the HPTF should only be used for its mandated purposes; this means programs like the Local Rent Supplement Program (LRSP) should no longer be funded through HPTF (LRSP should still be fully funded through the General Fund).  Yearly commitments to the HPTF demonstrate a long-term commitment to housing and DHCD should fully utilize all funds available to ensure that the District is continuing to preserve the existing affordable housing stock and providing the means to increase affordable options. $79.3 million has been committed to the HPTF for FY15.  Additionally, under the FY15 Budget Support Act, 50% of future year-end unrestricted surpluses will be committed to the HPTF once all required reserves have been achieved.

 

4.      Establish the District of Columbia Housing Land Trust.

The D.C. Housing Land Trust should be created to assist the city in preserving more units of affordable housing.  The land trust would be seeded with public money and would be tasked with identifying housing units throughout the city that could be bought and made affordable. The units would include single-family homes, apartments, apartment buildings, etc.  D.C. would acquire the properties and put them into the land trust to be managed and maintained by a third-party contracted organization. The properties would then be used to supply affordable housing in perpetuity.

 

5.      Create a District of Columbia Low-Income Housing Tax Credit.

As mentioned in a prior post, D.C. is currently at risk of losing 45 Low-Income Housing Tax Credit (LIHTC) buildings within the next five years.  City officials should create a District of Columbia LIHTC program to supplement the federal program.  Presently, 16 other states have implemented some form of a state-based LIHTC program.  This program would provide funding for the development costs of affordable housing by allowing investors to take advantage of both the federal and a District tax credit equal to a percentage of the cost incurred for the development of affordable units in a rental housing project.

 

6.     Overhaul existing agency performance measurements.

Currently, the performance measures for city agencies are not strong indicators of housing performance in the District of Columbia.  All agencies should tailor their performance measures to properly align with D.C.’s housing plan.  This will enable the D.C. Council to better hold agencies accountable as they strive to reach targeted housing goals that will properly assess how the city is preserving the existing affordable housing stock and working to increase it.  It will also help the Council to ensure homelessness to homeownership practices are being employed citywide.

 

7.      Build a centralized housing database.

DCHA and DHCD should collaborate to build a centralized database that is public, user-friendly and offers, at a minimum, the following information:

  • Affordable housing finance information (to include a list of available tax expenditures)
  • Detailed inventory of all D.C.-funded affordable housing options by Ward to enable the city to quantify the number of affordable housing units created or preserved
  • Tenant & Homeowner education information
  • List of certified housing counselors in the District of Columbia

 

8.     Establish fast-track permitting process at the Department of Consumer & Regulatory Affairs

The District of Columbia government should create a fast-track permitting process for the renovation or creation of affordable housing.  Additionally, fee waivers and reductions (building permit fees/impact fees) should be implemented to reduce the costs associated with affordable housing renovation or development.

 

9.      Invest in Financial Literacy Programs.

Through the Minimum Wage Amendment Act of 2013, the District of Columbia has demonstrated a commitment to ensuring that all residents are able to earn a basic minimum wage.  Still, it is incumbent upon city officials to recognize that a minimum wage is not the same thing as a living wage.  In light of that reality, the government should make programs available so that residents know and understand how to best manage their finances.  DCHFA, Department of Insurance, Securities and Banking (DISB), Department of Employment Services (DOES), DHCD and other city agencies should work to promote and advertise existing programs and services and collaborate to create and enhance programs that include:

  • Budget and Debt Management (to assist residents in understanding their credit, savings techniques, etc.)
  • Homebuyer Education  (to include informing residents about budgeting and credit, helping them to understand the mortgage transaction and preparing them for home ownership)
  • Foreclosure Prevention (to include information about loan modification and refinancing programs, deed in lieu of foreclosure, etc.)

 

10.   Comprehensively address the homelessness crisis.

City officials must work to enhance the wrap-around services for homeless individuals and families and for everyone at risk of becoming homeless.  The District of Columbia should at a minimum do the following:

  • Fully commit to the Statement of Principles as presented by the Way Home Campaign (Ending Chronic Homelessness in D.C.)
  • Fund more care coordinators, social workers and mental health providers in shelters who can identify problems impacting moves to permanent housing (unemployment or underemployment, mental health issues or substance abuse, domestic violence or any other traumatic incident, etc.) 
  • Provide homeless individuals and families the tools they need to commit to education opportunities and workforce development training
  • Invest more money in the annual budget for permanent supportive housing; the Local Rent Supplemental Program; Emergency Rental Assistance Program; and Rapid Rehousing.  In particular, we need to reform the rapid rehousing program to allow participants to remain on the program past the one year mark when necessary.

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Affordable Housing in D.C. through the Years

Part two of the New Neighbors Three-Part Series

By Katrina Forrest

Public housing has a complicated history in the United States.  Though well-intentioned, over the years, subsidized apartments have become the housing of last resort due to the high concentrations of poverty, property mismanagement, and more.  There is no one factor that has led to the failure of public housing but, throughout history, we have seen defining moments that have forever changed the housing landscape in cities across the country.  Unfortunately, we must reckon with a painful truth:  much of the housing ills of today were born out of government-sponsored discrimination.

In 1933, the Home Owners’ Loan Corporation (HOLC) was created as part of the New Deal to refinance mortgages that were going into foreclosure.  During its short three-year existence, only one percent of HOLC’s assistance went to Black mortgage holders.  Further, HOLC policy followed closely to the already well-established principle in the real estate industry at that time: White neighborhoods were more stable and presented the lowest risk.  In 1935, the HOLC would create “residential security maps,” to indicate the level of security for real estate investments with four color grades.  The communities “redlined” on those maps were viewed as extremely high risk.  The vast majority of those neighborhoods were comprised of largely Black populations.  Around the same time, the Federal Housing Administration (FHA) developed a “risk rating system.”  Its underwriting manual specifically noted that mixed-race areas were not viable because they would inevitably lead to declining property values. 

The message was loud and clear:  non-White neighborhoods were risky.  The effect of these federal policies was to strip people of color of the opportunity to access credit and for decades, people of color would be denied the great American dream of owning a home; one of their few opportunities to pass along generational wealth.

The Housing Act of 1937, also known as the Wagner-Steagall Act, sought to address the needs of low-income families by increasing the affordable rental housing stock in cities and allowing for federal subsidies to be paid to local public housing agencies.   Not surprisingly, however, public housing was not exempt from the historical patterns of racial segmentation.  Under new public housing programs the racial character of a neighborhood would dictate the race of the occupants for public housing.  In 1938, Langston Terrace Dwellings opened in the Kingman Park neighborhood of Northeast D.C.; it was the first federally funded housing project in the District of Columbia and only the second in the nation. 

Public housing was essentially a band-aid for housing reform.  With no loans available to people of color, public housing was their only viable option and even its design kept residents poor.  Properties did not receive timely maintenance and upkeep, crime was rampant, and there were few social services available to help meet other needs. 

Even for the people of color who were able to purchase their homes, their American Dream would soon be cut short.  Prior to the 1950s, the Southwest quadrant of D.C. was home to many Black-owned businesses and largely Black homeowners.  This was a thriving community; however, city planners working closely with the federal government would determine that Southwest should undergo massive “urban renewal.”  What this meant was that some 550 acres of small Black-owned businesses, row homes and more were completely leveled to make room for new office complexes, shopping centers and residential high rise buildings.   The effect of this project was to eviscerate the culture of a thriving historic Black neighborhood and displace residents in volumes.  For communities of color it became evident that the government, neither federal nor local, had their best interest in mind.  Residents and civil rights leaders would protest the conditions, but not much changed.

Known as a “cultural decade,” the 1960’s was a time of great political and social unrest.  The nation was in the midst of the Vietnam War, John F. Kennedy was assassinated and the civil rights movement continued on after some key legislative wins—but when Dr. Martin Luther King Jr. was assassinated on Thursday, April 4, 1968, riots erupted in cities across the country. Washington, D.C. burned for four days.  When the dust settled on April 8, twelve were dead, over 1,000 were injured and roughly 1,200 buildings had been set aflame. 

The riots devastated the D.C.’s urban corridors and with the destruction of businesses came the loss of jobs, increased crime, depressed property values and the flight of residents to surrounding suburbs.  The crack epidemic of the 1980’s only helped to exacerbate things, leaving little hope for economic prosperity.  These events, coupled with patterns and practices of racial discrimination facilitated by the United States government, significantly contributed to decades of community disinvestment in D.C.  Rebuilding the local economy after such catastrophic financial events did not occur overnight.  With a diminished tax base, D.C. would need an enormous financial commitment but economic challenges would persist for the city until the late 1990s when new leadership and energy was ushered in.   

Both locally and nationally, the 1990s brought about significant change in housing policy and strategy.  In 1992, the U.S. Department of Housing and Urban Development established the HOPE VI program to provide funding support to revitalize the nation’s most severely distressed public housing.  The program represented a dramatic policy shift, moving away from providing project-based assistance for the low-income to promoting mixed-income housing and the use of housing subsidies.   This program would prove to be pivotal for D.C.

In 1999, Anthony Williams was elected as the city’s fifth mayor.  His two terms in office brought about incredible transformation.  Under his leadership, Mayor Williams balanced the city’s budget, a previously unconscionable feat as the city lay in financial crisis resulting in the commission of a Financial Control Board.  Mayor Williams attracted new businesses to D.C. spurring billions of dollars of investment, but public frustration would arise as many low-income residents found themselves priced out of their communities due to the gentrification taking place across the city. Furthermore, the issues with public housing that had not been addressed for decades continued.

In October 2001, the District of Columbia’s Housing Authority (DCHA) would receive a $34.9 million HOPE VI grant award to revitalize the Arthur Capper/Carrollsburg community located near the Navy Yard in the Southeast quadrant of the city.  With the addition of private funding and public investment, this initial grant award grew to more than $750 million, forming one of the largest urban redevelopment projects in the country.  To date, DCHA has received seven HOPE VI grants but progress has been slow.  The Arthur Capper/Carrollsburg project, when completed, will be the first HOPE VI project in the country to provide one-for-one replacement of demolished public housing units in the same footprint as the original developments. 

Drawing on the HOPE VI model, Mayor Williams launched the New Communities Initiative in 2005.  The project’s goal was to address the needs of poverty-stricken and crime laden neighborhoods by reinvesting in communities and breaking up concentrations of poverty.  New Communities promised to deliver the one-for-one replacement of existing affordable housing units, the creation of mixed-income housing to end the concentration of poverty and build new housing to minimize displacement.  The original plan only intended to redevelop the Northwest One neighborhood in Ward 6.  The plan would have served as a pilot and given the District the opportunity to measure the intended outcomes; however, under the Fenty administration, an additional three neighborhoods, Park Morton in Ward 1, Lincoln Heights-Richardson Dwelling in Ward 7 and Barry Farm in Ward 8, were added.  This decision, in hindsight, likely contributed to the painfully slow progress of this initiative—too much at once.

One of the greatest challenges for government officials, as it relates to housing, is the lack of continuity in setting an agenda.  From one administration to the next, plans and priorities constantly change.  The New Communities Initiative has suffered through three administrations and while the program is slowly getting back on track, the families in those affected communities have been trapped in limbo for nearly a decade.  Making matters worse, the affordability of housing in D.C. continues to erode as evidenced by the impending loss of 45 low-income housing tax credit (LIHTC) properties in the next 5 years.

This lack of continuity has also hindered the growth of the city’s inclusionary zoning program, which was initiated by a vote of the D.C. Council in 2007 and became effective in 2009.  The program requires residential developers to set aside eight to 10 percent of new dwelling units for low and moderate-income residents at below-market rates; however, at the end of 2012 not a single IZ unit had been rented or sold.  While participation in this program will likely pick up, District residents cannot afford to wait four or 10 years before the housing they deserve is finally ready for their move-in.  This is particularly true when considering that more than 70,000 people were waitlisted last year for the 8,000 existing public housing units, forcing DCHA to close the list in an effort to reimagine it and increase the program’s effectiveness.   

There are many factors that have contributed to the city’s housing crisis; from years of federal government-sponsored discrimination, to social unrest, to uneven local attempts to address the problem and unchecked personal bias; we have all, in some way, contributed to the problem.  Moving forward, we must work to ensure that all citizens, regardless of race, disability, age, religious affiliation, etc. have the same opportunities and access to housing and banking services, capital and education. There must be a concerted effort to identify and address the barriers that continue to perpetuate segregation and isolate poor communities of color.  So how do we bridge a path forward?  How do we foster inclusive communities to promote diversity and access to opportunity for all?

Part 3 to follow….stay tuned!

*This post is part of an ongoing series of posts by Councilmember Grosso’s staff to support professional development. All posts are approved and endorsed by Councilmember Grosso.

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New Neighbors: A Three Part Series

By:  Katrina Forrest

Editor’s Note:  Katrina is a Legislative Assistant for Councilmember Grosso covering Transportation & the Environment, Health and Housing.  This three-part blog post will explore why the affordable housing stock has declined in the District, attitudes toward affordable housing and recommendations to bridge a path forward.

 

I stood on the corner of Minnesota Ave. and Benning Road in Northeast patiently waiting for my cab to arrive.  When it did, the driver and I shared an interesting exchange.  After explaining that I did not look like I lived in the neighborhood, he remarked that while D.C. has experienced great change, no amount of money could lure him to this particular Northeast community.

As we drove past Park 7, a new mixed-use housing development, I began to think critically about housing, attitudes toward housing affordability and who is most impacted.  Washington, D.C. is a unique city with a rich culture.  In 1990, the District was just one of five major cities with a majority Black (66%) population.  Today, that number has seen a sharp decline, due in large part to gentrification, which has displaced many low-income people of color, who are now heavily concentrated along the city’s eastern periphery.

As a southern Virginia transplant, I frequently find myself describing the District much like F. Scott Fitzgerald described New York’s Long Island in the Great Gatsby.  A true ‘tale of two cities,’ D.C. is divided into four quadrants (Northwest, Northeast, Southwest and Southeast) and separated by the Anacostia River.  West of the park is characterized by racially homogeneous affluence, while the communities east of the river have developed a reputation marred by high rates of unemployment, poverty and homelessness.  Like other urban cities across the country, the District is facing an affordable housing and homelessness crisis.  Nearly 20 percent of District residents live in poverty.  Our homelessness rate outpaces New York City, Los Angeles and Chicago and the overwhelming majority of these individuals are concentrated in Wards 7 and 8, where 95 percent of residents are Black.

Conversations about affordable housing and homelessness can be uncomfortable because they necessitate a broader discussion about race, wealth, class and affordability.  They also require self-reflection and a willingness to confront our own personal biases in order to improve the livelihood of all District residents. 

According to a 2013 Urban Institute study, White families on average earned about $6 for every $1 that Black and Hispanic families earned.  In dollar value, the average White family had about $632,000 in wealth as compared to $98,000 for Black families and $110,000 for Hispanic families.   Adding another layer of inequity, since 1954 the Black unemployment rate has consistently been twice that of Whites.

While these numbers account for the economic slight felt by middle-income individuals, they do not begin to capture the daily struggles faced by low-income families surrounded by poverty, low performing schools, limited transportation options, little or no employment opportunities and so much more.  For these reasons, this cannot be understated:  where affordable housing options are located matters

By concentrating the affordable housing stock in historically underserved sections of the city we are perpetuating the isolation of low-income residents and people of color—keeping them from accessing a plethora of opportunities.  Racial and residential segregation is intimately related to the concentration of poverty in urban core areas.  Sound policy encourages preserving the existing affordable units while also increasing the affordable housing stock—evenly distributing it across all wards of the District, but combating neighborhood opposition is an uphill battle.

We are all familiar with the pretext.  A new affordable housing development proposal is presented and residents report to community meetings in droves to claim, “You can’t build this here!  This will decrease my property value.”  We know what is meant.  The term “affordable” carries with it a negative connotation, plays on preconceived notions and is often met with fierce opposition, particularly from communities enjoying great economic prosperity—but what is affordable housing and to whom is it affordable? 

According to the U.S. Dept. of Housing & Urban Development, housing is “affordable,” if a family spends no more than 30 percent of their household income to live there.  This seems reasonable but 30 percent of $500,000 is far greater than 30 percent of $30,000.

The average one-bedroom rental in the District is $1,692/month.  Affording this rent would be challenging even for a single individual earning a mid-level salary as depicted below:

The reality is that across the region there is a serious lack of affordable housing and in some cases, middle-income individuals are living in the District’s low-income units.  Reframing the conversation is the first step to addressing the District’s housing challenges, because where you live greatly influences where you go to school, where you work, who your friends are, what you eat, your access to quality healthcare and so much more.

Still, while critical to effecting any positive change, confronting our biased attitudes about who is “low-income,” what is “affordable,” and where “affordable housing” is located does not address other realities.  Since 2000, the number of low-cost rental units in the city has fallen by half, and the number of lower-value homes fell by nearly three quarters.   This reality has made reinvesting in communities in a way that fosters inclusivity challenging due to the gaps in infrastructure and the disappearing housing stock—so how did this happen and where do we go from here?

Parts 2 and 3 to follow….stay tuned!

*This post is part of an ongoing series of posts by Councilmember Grosso’s staff to support professional development. All posts are approved and endorsed by Councilmember Grosso.

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