Spotlight On: The FY 2010 Budget for Affordable Housing

 This blog entry is part of a series that will highlight specific areas of the Mayor’s proposed FY 2010 budget.  For more budget analysis and information, visit our Budget Toolkit.

Affordable housing faces a tough future in the District.  While the economic downturn means even more District residents now need affordable housing, funding for it is falling at an alarming rate. The proposed local budget for affordable housing in FY 2010 is $79 million – a cut of more than one-third from the $124 million in the initial FY 2009 budget.

The lack of resources means that hundreds of affordable units that non-profit developers are ready to build won’t get started, that the wait list of nearly 26,000 people at the DC Housing Authority won’t get any shorter, and that fewer low-income families will become first-time homebuyers.

Support for DC’s Housing Production Trust Fund continues to plummet as a result of falling deed tax collections, the source of the Trust Fund’s funding.  The Trust Fund – the primary resource for affordable housing construction, renovation, and tenant purchase – will receive just $18 million in FY2010, compared with $59 million in 2007.  Many “shovel ready” projects will sit idle next year.

Other programs face problems too. HPAP, which provides home buying assistance to low-and moderate income households, will get just $19 million in 2010 – compared with $34 million originally budgeted for 2009.  The maximum HPAP loan has been reduced from $70,000 to $40,000, which may be too small to help some low-income families become homeowners.   The Local Rent Supplement Program, created in 2007 and expanded in 2008, has been frozen since then.  Without additional rent subsidies, it will be impossible to expand permanent supportive housing for the homeless or help families on the housing waiting list.

In a city where the costs of living are very high and out of reach for many residents, the reduction in affordable housing funding is troubling.   Last fall, the DC Council expressed support for more housing investment, but this was not reflected in the FY 2010 budget.  Additional funding for housing could put more families in their own homes, help kick-start the DC economy, and stop us from sliding even further behind in addressing the affordable housing needs of District residents.

For more information, see our summary of the budget for affordable housing.

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