Boosting Schedule H Tax Credit Near Economic Development Projects Will Help Low-Income Residents Stay In Their Homes
How can the city bring new investment to low-income communities, without displacing low-income residents? The DC Council is considering a bill that would take an important first step in protecting longtime residents from rising housing costs spurred by city-supported economic development projects. The Council should pass this bill, and the city should make sure that economic development projects include anti-displacement efforts, such as preserving nearby subsidized affordable housing.
In recent years, economic development projects have brought new investment to under-served neighborhoods – but have also kicked the surrounding real estate market into high gear. That risks displacing low-income residents from their homes – and from the jobs, amenities, and other opportunities created by the project.
To offset the impact of rising property values and housing prices on low-income residents, the Displacement Prevention Act would boost the amount of the Schedule H refundable tax credit available to residents of “designated displacement risk zones.” Schedule H helps low-income residents whose property taxes or rent are high compared to their income. In displacement risk zones, the bill would double the maximum Schedule H credit from $1,000 to $2,000, and would increase the share of rent that can be claimed toward the credit.
In addition, the bill would set up a Displacement Prevention Assistance Fund to help residents at risk of eviction or foreclosure know and exercise their rights through improved access to legal representation and tenant organizing resources. Access to legal assistance has been shown to reduce evictions, which are immensely harmful to families.
Yesterday, we testified that the Council should pass the Displacement Prevention Act, and to follow the example of the bill and incorporate anti-displacement efforts in every economic development project or real estate deal it supports. Additional steps to protect low-income residents could include:
- Begin each project with an equitable development plan. The 11th Street Bridge Park began with such a plan, which is now linked to a $50 million effort to build and preserve affordable housing within the future Bridge Park area.
- Preserve nearby subsidized affordable housing ahead of time, before the market pressure becomes too much. Ways to do this include providing financial assistance to improve housing conditions in return for extended subsidy or affordability periods, and utilizing the District Opportunity to Purchase Act to buy key buildings that come up for sale.
 Matthew Desmond, “Evicted: Poverty and Profit in the American City,” Crown Publishing, 2016.
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