McDuffie Bill Would Dedicate Surplus Funds to Affordable Housing
Kenyan McDuffie is on something of an affordable-housing tear. The Ward 5 councilmember introduced a bill last summer to provide clearer definitions of "affordable housing" on a project-by-project basis, given that housing classified as affordable can have an income threshold of 80 percent of area median income, which for a family of four is over $85,000 a year. In December, he followed that up with legislation to require affordable housing in new residential developments built on public land. Both bills are under consideration in committee.
Now he's about to complete the trifecta. Next Tuesday, McDuffie plans to introduce a third bill to boost affordable housing in the city. The legislation would require the city to dedicate a portion of its budget surplus to the Housing Production Trust Fund, the District's main tool for building and maintaining affordable housing.
If the bill becomes law, 25 percent of the city's unreserved budget surplus in any given year will automatically go to the Trust Fund coffers. "When you talk about dedicating 25 percent of the city's excess funds to the Housing Production Trust Fund, it helps to take part of the politics out of the process," McDuffie says.
But the key word is "unreserved." The Trust Fund would get a quarter of what's left of the surplus once the various emergency and contingency reserve funds are set aside. There actually hasn't been any unreserved surplus since fiscal year 2008. In fiscal year 2012, the latest year for which figures have been released, the city's cumulative surplus was $1.5 billion, but all of that money was classified as reserved for debt service or emergency funds or some other purpose. The last time the city had unreserved surplus funds—$86.7 million of them—was in fiscal year 2008, before the recession took its toll.
Still, McDuffie's hopeful that if the good economic times continue to roll, the legislation will give a big boost to the Trust Fund. "When the city does well, we're going to make this investment into the Housing Production Trust Fund."
Nearly a year ago, Mayor Vince Gray announced a one-time, $100 million investment in affordable housing. Housing advocates are hoping that the Trust Fund could eventually reach an annual level approaching that amount. Funding for the Trust Fund comes mainly from deed recordation and transfer taxes, but if McDuffie's legislation takes effect and the economy continues to grow, dedicated surplus funding could potentially be just as important a source. First, though, we'll need unreserved surplus funds to dip into.
Photo by Darrow Montgomery