Housing Complex

This D.C. Affordable Housing Program Is a Bargain. So Why’s It Underfunded?

Locations of properties purchased through the First Right Purchase Program between 2002 and 2013.

Locations of properties purchased through the First Right Purchase Program between fiscal years 2002 and 2013.

Back in February, I wrote about a funky house in Adams Morgan that had the potential to become a landmark in D.C. affordable housing. It's an old-school rooming house with a motley cast of characters who are trying to purchase the property and make it D.C.'s first tenant-owned rooming house. If successful, they'll preserve 14 units of (unconventional) affordable housing in a part of the city that's increasingly unaffordable to working-class residents, at minimal cost to the city.

That's all well and good, but better, of course, would be a citywide program to aid in this type of preservation of affordable housing. Enter the First Right Purchase Program.

Many Washingtonians are familiar with the Tenant Opportunity to Purchase Act, which allows tenants to buy their homes or buildings before they're sold to a third party. Less well known is the First Right Purchase Program, through which the Department of Housing and Community Development provides low-interest loans to help tenant associations make these purchases under TOPA.

The D.C. Fiscal Policy Institute has a paper out today that breaks down the numbers on the First Right Purchase Program. For the most part, the program looks to be a big success. And yet.

Between fiscal years 2002 and 2013, the program helped preserve 1,391 units of affordable housing, at a total cost of $129,600,000. That comes out to about $97,900 a unit, after DCFPI excluded certain small-loan outliers. That already sounds like a pretty low pricetag for affordable housing in D.C.—and of course it's much lower when you consider that the city expects to recoup most of the money it's lending out through the program. (Jenny Reed, the study's author, cautions that the loans are long-term and won't be paid back quickly.)

DCFPI cites a study by the Coalition for Nonprofit Housing and Economic Development finding that the average development costs for First Right Purchase projects were less than $165,000 per unit—lower than other types of affordable housing development (although with DHCD chipping in a higher chunk of the funding).

It's not all roses: The study finds that funding for the program has declined sharply in recent years, as the following chart shows.

Screen Shot 2013-09-24 at 1.55.02 PM

"While a high of 292 net new units were supported in FY 2008," Reed writes, "the total dropped significantly in FY 2009 and now stand at 35 for FY 2012 and 28 for FY 2013."

Reed recommends that DHCD provide more funding, partly by removing the restriction that allows no more than 49 percent of a First Right Purchase project's development costs to be paid by DHCD. Given the city's growing need for affordable housing, and the comparatively low price tag of preservation through programs like this—rather than building or buying new units—that sounds like the right idea.

Images from the DCFPI report

  • George Jones

    Northern Refugee said...

    Mr. Rational:

    I am not sure if you are joking, but that is exactly how I envision the future. Those who think blacks will inhabit prime real estate in functioning cities are nuts. Even DWLs in places like NYC are fed up with them. Hence their removal from Manhattan and now outer boroughs like Brooklyn and Queens. Even Chicago and Atlanta have seen an outflux of Negros. They will be settled in remote apartment complexes in outer burbs (I've seen this close up in my part of the country) using section 8, or they will inhabit modern day reservation a la Detroit and Memphis. DWLs are evil, not stupid.
    September 16, 2013 at 2:13 AM