Chairman Evans and members of the Committee, thank you for the opportunity to testify today. My name is Jenny Reed, and I am the Policy Director of the DC Fiscal Policy Institute. DCFPI engages in research and public education on the fiscal and economic health of the District of Columbia, with a particular emphasis on policies that affect low- and moderate-income residents.
I am here to testify in support of B20-369, the “Truth in Affordability Reporting Act of 2013.” The bill would help the public and policy makers have a clearer understanding of what “affordability” actually means in the District’s affordable housing programs. It also will help policy makers understand how affordable housing that is pegged to the median income for the Washington region would impact residents living in DC.
One important change the bill proposes is to ensure both developers and the District use actual income levels when identifying for whom their housing will be affordable. Often, affordability is expressed in terms of a percentage of area median income (AMI), such as units affordable to someone making 30 percent of area median income. But many people do not have a sense of what these terms mean. It would be clearer to note that this means the housing would be affordable to a family of four earning $32,200 (see Table 1). Reporting both the percentage of area median income and the actual income level can help the public better understand what affordable to whom means.
One suggestion DCFPI has is to require affordability to be reported using one family size as a point of reference. The AMI is typically expressed in terms of income for a family of four, but as Table 1 highlights, the income limits vary based on household size. If DC were to choose one family size it may want to consider using a three-person households, given that the average family size in DC in 2012 was 3.25 persons according to the Census Bureau.
Another important change the proposed bill makes it to help the public and policy makers better understand how affordable housing that is pegged to an area median income relates to the actual incomes of residents in DC. The bill proposes that subsidized affordable housing in the soon-to-be-developed Affordable Housing Database, led by the Deputy Mayor for Planning and Economic Development, reflect affordability relative to both area median income and DC median income levels. This information also would be reported, when relevant, in Tax Abatement Financial Analyses (TAFA’s) for projects that involve affordable housing.
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