How to Ensure DC’s Housing Investments Reach the Most Vulnerable Residents

Most of the DC renters facing severe affordable housing challenges are extremely low-income, yet only 15 percent of new rental housing awarded Housing Production Trust Fund dollars in 2016 will serve families with incomes this low. This continues a mismatch between housing needs and use of DC’s housing resources that DCFPI identified in a report last year. There are steps the District can take to better target housing resources to the families most in need, and those should be put in place as soon as possible.

The District is required by law to devote at least 40 percent of the resources from its main affordable housing tool, the Housing Production Trust Fund, to help extremely low-income households (those with incomes below 30 percent of the area median or $32,000 for a family of four). These are the families facing the worst affordable housing problems: most spend at least half their income for rent each month.

Yet the Trust Fund has fallen short of this goal in recent years,[1] and is anticipated to fall short again this and next fiscal year, too.[2] In 2017, for example, only 22 percent of Housing Production Trust Fund resources will reach extremely low-income households.

Not meeting the housing needs of DC’s lowest-income families has serious consequences. Paying more than half of household income for rent leaves low-income families financially on the edge, at high risk of being evicted, moving frequently, or becoming homeless. Often, these residents face hard choices between paying rent and buying enough food for their family.

So why has the Housing Production Trust Fund not met its mandate to serve the households most at risk of severe housing problems?

The answer lies partially in the difficulty of balancing DC’s many housing priorities. The Department of Housing and Community Development (DHCD) has recently prioritized the Trust Fund to preserve existing affordable housing, most of which serves low- to moderate-income levels. This is laudable, but with limited resources in the Trust Fund, it’s difficult to intensify preservation efforts while also creating a significant amount of new housing for extremely low-income households.

This points to the need to expand the number of tools in DC’s affordable housing toolbox. The Mayor’s Housing Preservation Strike Force recommended creating a public-private fund entirely dedicated to acquiring, rehabilitating, and preserving affordable homes. DCFPI encourages DHCD to move this idea forward in 2017, and we also encourage the Mayor and Council to provide any set-up funding that may be needed in fiscal year 2018. This will free up some of the Housing Production Trust Fund to focus on building new housing.

Yet this doesn’t solve the problem, since only 15 percent of the new rental housing awarded Trust Fund dollars in 2016 will be affordable to extremely low-income households.[3] To improve this, DHCD should change its selection criteria to prioritize extremely low-income housing better. And to make sure that those projects pencil out, it’s critical that they have access to ongoing operating assistance through the Local Rent Supplement Program(LRSP). That’s why the Mayor and Council need to expand the Local Rent Supplement Program in fiscal year 2018. Ultimately, the impact of DC’s record high investments in affordable housing won’t be maximized if those resources don’t reach the families most in need.

DCFPI testified about this issue this week. You can read the full testimony here.

[1] Housing Production Trust Fund annual reports.

[2] DHCD performance oversight pre-hearing responses, 2017.

[3] DCFPI analysis of the DHCD Development Finance Division pipeline report.