As the Economy Recovers, Mayor Gray’s proposed FY 2012 Budget Leaves Little Room for Affordable Housing

April 20th, 2011 | by Jenny Reed

All this week, the District’s Dime blog will feature entries that highlight program areas experiencing significant cuts in Mayor Gray’s proposed budget.  Stay tuned next week for a rundown of key revenue initiatives. 

One of the areas hardest hit by Mayor Gray’s proposed FY 2012 budget is affordable housing.  Despite the fact that rents in DC have risen faster than in most major cities — and faster than the incomes of most DC households — and that many families are still reeling in the wake of the Great Recession, Mayor Gray’s proposed budget would make significant reductions and changes to some of DC’s main affordable housing programs.  The result would be to significantly weaken the District’s capacity to respond to the affordable housing needs of DC’s low- and moderate-income residents.     

The District has created a variety of affordable housing tools, each serving a specific purpose and each critical to make housing available all along the continuum of affordable housing needs — from homelessness to homeownership — for DC’s low- and moderate-income residents.  

These tools include: 

  • The Housing Production Trust Fund which finances affordable housing construction and renovation, and also provides financial support to tenants who want to purchase their building when it goes up for sale.   
  • The Local Rent Supplement Program which provides a rental subsidy to help very low-income residents, those making less than $30,000 a year — live in affordable homes.   
  • The Permanent Supportive Housing Program which provides supportive housing for chronically homeless individuals and families.  

Because DC’s coffers have been hit hard over the last four years, the city’s affordable housing tools have been largely dormant and funding has been used to maintain most programs at their prior-year levels.  The exception is the Housing Production Trust Fund —  supported by 15 percent of DC’s deed recordation and transfer taxes — where resources fell significantly when the recession hit and have remained low for some time.  In FY 2012, as a result of several large commercial property sales and an increase in single family home sales, total resources for the HPTF would jump higher.  However, this expected increase would be wiped out by the Mayor’s proposed FY 2012 and in future years, and would leave the HPTF with almost very little funding for its core purposes — affordable housing construction, renovation, and tenant purchase.    

Furthermore, the proposed budget would use funding for some parts of the housing continuum to fulfill another program’s purpose.  In fact, the Mayor’s FY 2012 budget proposes to use all of increased funds flowing into the HPTF to replace existing funding for the Local Rent Supplement Program (LRSP).  In addition, LRSP and federal vouchers would be used under Gray’s budget to cover part of the existing expenses of Permanent Supportive Housing Program.  

Lastly, the budget proposes to phase out the practice of providing housing vouchers to low-income families, by not allowing new families to participate once a family leaves.  This would remove one of the main tools the District has to move people off of the DC Housing Authority’s waitlist — currently at 28,000 households. 

The result of these cuts and changes is to weaken the robust set of tools DC has to respond to the affordable housing needs of the District’s low-income residents.  To learn more about these cuts and changes, see DCFPI’s in-depth analysis of the FY 2012 budget for affordable housing. 

And affordable housing is not the only area of concern for District residents facing homelessness. Stay tuned tomorrow for a look at cuts in the Mayor’s budget to interim disability assistance . . .

4 Responses to “As the Economy Recovers, Mayor Gray’s proposed FY 2012 Budget Leaves Little Room for Affordable Housing”

  1. [...] | DC Fiscal Policy Institute takes an close look at the deep cuts to affordable housing in Mayor Gray’s proposed FY 2012 budget. In a city where the cost of rent seems to be [...]

  2. [...] We have an overpopulation of the homeless already, so what’s going to happen when they close all the shelters for singles, when they end programs like IDA (Interim Disability Assistance) and stop building affordable housing? [...]

  3. [...] wait to end the culture of dependence: they just want poor people to get out of town. They’re defunding affordable housing, they’re decreasing housing production, they’re shutting down shelters, breaking down [...]

  4. [...] it again this year, when he tried to make a further cut in the Production Trust Fund and to let the Local Rent Supplement Program, [...]