DC Needs To Prioritize Displacement Prevention and Affordable Housing Preservation

Good morning, Chairperson White and members of the Committee. Thank you for the opportunity to speak today. My name is Mychal Cohen, and I am a senior policy analyst at the DC Fiscal Policy Institute (DCFPI). DCFPI is a non-profit organization that shapes racially-just tax, budget, and policy decisions by centering Black and brown communities in our research and analysis, community partnerships, and advocacy efforts to advance an antiracist, equitable future. DCFPI is a member of the Fair Budget Coalition, and we fully support their fiscal year (FY) 2026 budget priorities and recommendations.

Today, I will focus my testimony on asking the Council and this Committee to prioritize displacement prevention and affordable housing preservation by:

• Rejecting the disenfranchisement of tenants’ Tenant Opportunity to Purchase Act (TOPA) rights through the Budget Support Act (BSA);
• Investing in consistent funding for preserving affordable housing; and
• Developing a tenant-focused response to the issue of high rates of arrears.

Reject the Disenfranchisement of Tenants’ TOPA Rights Through the BSA

The Council is currently considering significant changes to one of the District’s core tools for preservation, TOPA, which gives tenants a seat at the table when their buildings go up for sale. Tenants living in a building going up for a sale are able to either purchase their buildings or assign their rights to a developer of their choice. Even if residents do not organize to purchase their building, TOPA allows them to negotiate with their existing or incoming landlord to ensure their units remain affordable, secure needed repairs, or even ensure some portion of new units are affordable. Provisions in the mayor’s proposed bill, Rebalancing Expectations for Neighbors, Tenants and Landlords (RENTAL Act), which is also included in the BSA, would severely limit the scope of TOPA, exempting significant numbers of buildings that are newly constructed, substantially rehabilitated, and/or have affordable covenants. This sort of reduction in the rights of tenants should not be ushered through as part of the budget process. It deserves more substantial conversation and nuanced lawmaking.

While the hearing held by the Committee on Housing on May 28^th began this conversation, the timing and length of the hearing meant that the Council heard little from tenants with direct experience with the TOPA process and the housing conditions that TOPA helped them negotiate to improve. Instead, the Council heard largely from landlords, their representatives, and advocates who have jobs that allow them to be present for a 14-hour hearing. The Council should take steps to more directly seek input from the many tenants that the RENTAL Act seeks to strip of their rights.

Invest in Consistent and Predictable Funding for Preserving Affordable Housing

TOPA preserves affordable housing. The latest comprehensive information the District has about the impact of TOPA comes from a Council-commissioned study by the Coalition (formerly the Coalition for Nonprofit Housing and Economic Development) that found between 2006 and 2020, there were 19,170 units where tenant associations were able to successfully negotiate a rental or ownership outcome. Of those units, 16,244 were either made or preserved as affordable.^[1] The study found that successful TOPA projects often involved the two most-used federal affordable housing programs; over 7,000 Low-Income Housing Tax Credit units and over 3,000 Project-Based Section 8 units were preserved through TOPA.^[2] Much of the dialogue around the proposed changes to TOPA have focused on the threats to the “affordable housing ecosystem.” However, these conversations haven’t touched on one of the most significant threats to affordable housing in the lack of consistent preservation funding.

Reinstate, expand, and fund the First Right to Purchase Program

Even when tenant associations are able to act on their TOPA rights, associations and their chosen developers struggle to find financing to purchase, renovate, and preserve the buildings as either affordable rental units or to create limited equity co-operative housing (cooperatively owned buildings that remain affordable). The District should expand and fund the First Right to Purchase Program (FRPP), a program that offered many tenants with low and moderate incomes, the majority of whom are Black or brown, their first opportunity for homeownership by providing low-interest loans to tenant groups or their chosen developers.

The Department of Housing and Community Development (DHCD), the agency that administers FRPP, has not accepted applications for this program in more than five years, and it is no longer funded. As the TOPA study commissioned by the Council recommends, FRPP should be funded and expanded to offer financing to multi-family properties with characteristics that make it hard for them to find other financing options due to deferred maintenance or high costs of acquisition and renovation that would require a purchaser to significantly raise rents, displacing tenants with low incomes.^[3] FRPP, which would be available year round, can be used in conjunction with HPTF funding to acquire properties for preservation (which might later apply for HPTF funding when it becomes available through a Notice of Funding Availability).

Ensure that the Housing Production Trust Fund sets aside funds for preservation

DCFPI applauds the mayor for funding the Housing Production Trust Fund (HPTF) at $100 million in the FY 2026 budget. Given the mayor and Council’s focus on the current crisis within the affordable housing market, DCFPI hopes to see that number increased in future years. In order to match the purchasing power of the initial $100 million investment in 2015, the HPTF would need to be funded at $135.6 million.

The criteria that DHCD uses to select projects make it difficult for preservation projects to compete with new production. DHCD should make preservation a core priority when making selections for HPTF allocations. By setting aside a portion of the HTPF for preservation, the District can ensure more of these projects move forward, and that those projects are financially viable, while increasing housing stability for residents in buildings in need of repair.

Develop a Tenant-Focused Response to the Issue of High Rates of Arrears

In testimony given to the Committee on Housing on May 28th, DHCD Director Colleen Green discussed restoring the “social contract between renters and landlords” while referencing the issue of rental arrears. The Council has taken steps to support landlords to who are owned rent, including making changes to emergency rental assistance, proposed exemptions to TOPA, and proposed changes that would make evictions faster and easier. However, the mayor and the Council have done nothing to help renters struggling with the high cost of rent. Indeed, this budget features drastic cuts to the Emergency Rental Assistance Program (ERAP), no new Local Rent Supplement Program (LRSP) Vouchers, and several anti-tenant provisions in the BSA. ERAP is DC’s primary source of emergency funds for renters and LRSP is the Districts local housing voucher program.

These choices fly in the face of consistent evidence that this housing crisis is one of unaffordable rents and shrinking incomes. Renters in DC, much like renters across the country, are increasingly burdened by the high cost of living.^[4] Households living at lower income levels feel this burden deeply: 69 percent of renters making less than 30 percent of the area median income (in DC, this is $56,920 or less for a family of four), are paying more than 50 percent of their income in rent (this is considered extreme rent burden).^[5] Many of these renters are paying significantly more than 50 percent of their income just to afford a place to stay. This leaves households making impossible choices between rent and feeding their family or rent and needed health expenses.^[6]

If the Council truly seeks a balanced approach to the housing ecosystem, then they must find a way to directly support renters in the FY 2026 budget. The Council can allocate funding to ERAP and LRSP. And they can require that DHCD forgive or reduce existing rental arrears for all affordable housing projects where they provide stabilization and repair funds.

Thank you for the opportunity to testify. I look forward to discussing these recommendations with you further.