Housing Complex

Affordable Housing Could Be the Big Winner in D.C.’s Budget Boom

Affordable housing properties like this could soon be rehabbed with the city's windfall surpluses.

Affordable housing properties like the Parkway Overlook could soon be rehabbed with the city's windfall surpluses.

Once again, we're rich. The D.C. government will post a $321 million surplus for the 2013 fiscal year, the city's third consecutive budget surplus, new Chief Financial Officer Jeffrey DeWitt announced today. And if we keep it up, the biggest beneficiary will be affordable housing.

Mayor Vince Gray and Councilmembers Phil Mendelson and Kenyan McDuffie worked out a system for spending surplus funds in the future. According to their agreement, half of excess surplus funds will go to the Housing Production Trust Fund, the city's primary mechanism for building and maintaining affordable housing. The remaining half will be spent on a health benefits fund and on paying down the city's debt.

But don't expect to see much of that money going to affordable housing this year. The vast majority of the surplus is going to the city's various reserves, allowing the rainy-day fund to reach an all-time high of $1.75 billion. Only $9.6 million of the surplus is considered uncommitted.

Still, the reserves are nearly full. The emergency, contingency, and fiscal stabilization funds don't need any more cash: The cash flow fund is 52 percent full, meaning it requires just under $300 million more. In future years, as the city's budget grows, so will the mandated reserve funds, since they're directly tied to the size of the budget. But if the current fiscal year brings as large a surplus as the current one, the reserves could be just about full, allowing surpluses in future years to go almost entirely toward things like the Housing Production Trust Fund.

Elizabeth Falcon of the Coalition for Nonprofit Housing and Economic Development, who oversees the Housing for All campaign, concedes that today's announcement probably won't mean much of a boost for the Trust Fund in the 2013 or 2014 fiscal years. But in future years, she says, it's likely to provide a stable funding source for the Trust Fund that could allow it to reach housing advocates' funding goal of $100 million per year, including the city's existing contribution of about half of that through deed transfer and recordation taxes.

"I think in the long term, because D.C. has to have a balanced budget, it means they can’t end the year without having leftover money," she says. "And so that allows a level of confidence that there’ll be money at the end of the year. Most years, it’ll provide over $50 million per year, in addition to what’s already dedicated to the Trust Fund, so it should bring it over $100 million per year."

Today's announcement echoes a bill McDuffie introduced earlier this month, which would have dedicated 25 percent of excess funds to the Trust Fund. The 50 percent proposal will likely supplant his bill.

"We probably won’t need Councilmember McDuffie’s bill because this covers it," says Stephanie Liotta-Atkinson, McDuffie's legislative director. "Everybody’s had a meeting of the minds that this is the right way to go."

She adds, "We just need a Council that’s supportive."

Photo by Darrow Montgomery

  • https://twitter.com/ranpuba Randall M.

    I don't think funding has been THE problem with regard to affordable housing.

    The problem also includes a lack of a cohesive plan to create density, relaxing zoning requirements to create quality housing relatively quickly. District funding only provides seed money to encourage developers to create affordable units - this will not meet demand.

    Areas within 0.5 mile radius of District Metrorail stations should have a small area density plan that focused on adding x thousands pf units. The District, working with the public, WMATA and developers can create a plan to replace the haphazard use of the current process.

  • JM

    If a city continually runs a surplus, then maybe taxes should be lowered..?

  • adam

    How about a tax cut?

  • BE FOR REAL

    hOW ABOUT REPAIRING THE METERS OR REPLACING THE BROKEN METERS SO THAT PEOPLE CAN STOP GETTING THOSE EXPENSIVE ASS TICKETS THAT DC GIVES OUT. YOU WONDER WHY YOU HAVE SUCH A SURPLUS YOU GUYS ARE ROBBING PEOPLE WITH THE TICKETS LETS BE FOR REAL.

  • pat b

    If the city is consistently running a surplus how about investing into the
    Infrastructure, and human capital.

    The H St trolley needs to be extended out across the anacostia
    and downtown.

    The city needs to invest into Solar PV for their buildings and Electric
    cars for the utility vehicle fleet.

    The city needs to educate it's citizens better.

    The city needs to fix up the parks and add more bike lanes.

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  • chris lee

    city government shouldn't be in the housing business..this is a CITY not a habitat

  • TakomaNick

    It seems like a backdoor way to spend more money. It reminds me of the proposal for the DC United stadium deal. If you think DC should spend a couple hundred million dollars a year on something then be upfront about that and propose the dollar figure in the normal appropriations process. Personally, I want to house all of the homeless but I don't think it's in DC's interest to subsidize people who can't afford market rents in DC but could afford something in the suburbs. We need to look at this with more of a regional view.

  • mona

    Years ago when Fenty was mayor and we had a surplus he lowered real estate taxes. How about that Mayor Gray?

  • Son of Washington

    First off, expecting this government to lower taxes is funny. Budget surpluses are like crack and our Council are pipe heads. They need it and they will spend it. Yes this includes our Mayor.

    Secondly, we continue to run a surplus because the Council and the Mayor are some lying sons of bitches. Many of the funds come from business taxes which had taxes which were supposed to sunset. Of course the sun has never, ever set in this city so the taxes have continued to be in place, even though they shouldn't. The first step would be for the government to keep its promises and let those provisions sunset. A great example was the baseball tax. It was supposed to be for a certain number of years and any additional money was supposed to go to pay down the debt faster. They haven't paid down the debt faster and the provision hasn't sunset.

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