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Testimony

Testimony of Claire Zippel, Housing Policy Analyst, At the Public Hearing on B21-688, The Displacement Prevention Amendment Act of 2016

Chairwoman Bonds, Chairman Evans, and members of the committees, thank you for the opportunity to testify today. My name is Claire Zippel, and I am the Housing Policy Analyst at the DC Fiscal Policy Institute. DCFPI promotes budget and policy choices to expand economic opportunity for DC residents through independent research and policy recommendations.

I am here today to express support for Bill 21-668, the Displacement Prevention Amendment Act of 2016. The bill would increase the amount of the Schedule H tax credit available to residents of selected “displacement risk” areas, and would create a fund to provide legal services, tenant organizing, and foreclosure prevention in these areas. The bill designates Congress Heights, the neighborhood of the future Washington Wizards practice facility, as the first displacement risk area.

In recent years, city-supported economic development projects and real estate deals have created economic benefits for the city and have brought new investment to under-served neighborhoods. Yet such projects inevitably lead to rising property values, which in turn can led to rising property taxes for homeowners and rising rents for tenants in the surrounding neighborhood. Without adequate support and protections for low-income residents, rising housing costs risk displacing low-income residents from their homes – and from the jobs, amenities, and other opportunities created by the project.

This bill is an important step toward ensuring that city-supported economic development projects, especially those in low-income communities, include proactive efforts to prevent residential displacement. The bill would increase the amount of Schedule H tax credit for residents in selected neighborhoods with city-funded development projects. Schedule H currently provides up to $1,000 for lower-income families with substantial property tax or rent burdens. The bill would increase the maximum Schedule H credit to $2,000, which would help offset the impact of rising property values and housing prices on low-income residents. Research on other refundable tax credits suggest that the families who receive the boosted Schedule H would use it to make ends meet, pay bills and pay down debt (such as back rent or utilities), save, and invest in education or child enrichment[1] – all of which are related to better financial and residential stability.

In addition, the proposed Displacement Prevention Assistance Fund will 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.[2]

We encourage the city to follow the example of this 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. This can be accomplished by providing financial assistance to landlords to allow them to improve housing conditions, in return for extended subsidy or affordability periods. It also can be accomplished by utilizing the District Opportunity to Purchase Act to buy affordable rental buildings that come up for sale.

Thank you, and I am happy to answer any questions.

 

[1] Center on Budget and Policy Priorities, “EITC and Child Tax Credit Promote Work, Reduce Poverty, and Support Children’s Development, Research Finds,” 2015. http://www.cbpp.org/research/federal-tax/eitc-and-child-tax-credit-promote-work-reduce-poverty-and-support-childrens

[2] Matthew Desmond, “Evicted: Poverty and Profit in the American City,” Crown Publishing, 2016.