Something missing?

Last night, Mayor Vince Gray gave a 5,700 word speech on the state of the District, laying out his priorities on public safety, sustainability, education, and fostering new and existing industries other than the federal government (especially tech). All great things!

But for someone who covers real estate, something was obviously missing: Housing. Creating more of it, and preserving the stuff we have, is critical to both keeping people here who might otherwise leave and getting people who'll take all these new jobs to actually live and pay income taxes in the District—if they can't afford it, there are plenty of new apartments in Arlington. And yet, as housing advocates point out, the word "housing" appeared only twice in the mayor's speech, in the context of talking about how many development projects we already have underway.

There are a lot of cranes in the air, that's for sure. You might wonder: Shouldn't we just make sure people have access to good jobs, improve schools, and fight crime so that people feel comfortable investing in communities all over the District, and let housing take care of itself? 

Sure. Private market response is probably the most important element here; people will buy and renovate houses where they can see a future for themselves and their families, and developers will take advantage of that demand (like W.C. Smith is in Carver Terrace).

But right now, not all of the demand is being served. With the exception of a few, mostly church-led projects, nearly all of those cranes are for high-end apartment and condo buildings—it's the most lucrative sector for a developer to finance. This week, the Coalition for Smarter Growth put together a little paper demonstrating how the greatest need is actually among those making less than half the area median income, since that measure actually includes much wealthier suburban areas as well as the city itself.

The problem is, the city says it doesn't have the money to help developers interested in city-owned parcels keep the resulting units affordable; the Deputy Mayor for Planning and Economic Development hasn't even decided yet whether to follow up on its intention to subsidize low-cost units on top of the West End firehouse. So what's the plan?

Well, there is no plan, yet. The city was due to update its five-year Comprehensive Housing Strategy Task Force report last September, after Brookings published an update over the summer showing slow progress. But according to Department of Housing and Community Development director John Hall, that's been delayed; the Deputy Mayor for Planning and Economic Development has only recently sent its nominees for people to sit on the new task force to the mayor. So there are no near term marching orders, and won't be for a while.

Meanwhile, the stuff that's already rolling will stay rolling. The city expects to issue a request for proposals for the redevelopment of Barry Farm this spring, and another for low-income housing tax credits issued by the feds. "We still have the same menu of services we've had for decades now," Hall says. The Housing Production Trust Fund is expected to come in at about $50 million in fiscal year 2013 due to higher deed recordation tax revenue [UPDATE, 4:16 p.m. – Although, as the D.C. Fiscal Policy Institute's Jenny Reed points out in the comments, an ongoing cut of $18 million and bond funding for new communities brings it back down to $12 million).

But as far as a vision? Gray hasn't laid that out yet. Even if he thinks things are going well, it would've been nice to hear him talk about why.

A good little chart from the Coalition for Smarter Growth.

And the D.C. Fiscal Policy Institute sent over this handy chart of how much the Housing Production Trust Fund is expected to get over the next few years. It's supposed to have $70 million every year.

Photo by Lydia DePillis

Found on R Street off 14th Street. Good luck, you poor schmuck.

Dan Reed at Just Up the Pike had a good piece the other day on the need for housing that's affordable to 20-somethings just starting their career—a constituency that's currently paying a huge percentage of what they earn to live someplace cool, or just going elsewhere. He brought to my attention a form of housing that seems like such a good idea I can't believe it hasn't showed up in D.C. already: Apodments, or one-room units that can be rented for much less than the more fully equipped apartments going up all over town.

The old version of this kind of housing is rooming houses—longer-term hotels that house transients and poor people. There are still a lot of them in some cities, most notably San Francisco. In D.C., single-room occupancy buildings are generally set up for formerly homeless people, like the new facility that will replace La Casa Shelter in Columbia Heights.

But small, cheap apartments needn't be flophouses or a better version of homeless shelters. Rather, think of them simply as micro-studios, with the same kind of lease as a regular apartment. Just look at the Videre in Seattle, where 46 units averaging 130 square feet go for between $495 and $650 per month, including access to communal kitchens. They're leasing so well that the landlord has since raised the rent.

At the moment, young people headed to D.C. after college have the option of facing the terrifyingly subjective group house market via Craigslist, where only the most charming prevail, or paying through the nose to rent in a big apartment building, which are rapidly getting more expensive. (Anecdotal evidence: My friend paid $850 for an efficiency in the Woodner on 16th and Spring Street NW in 2009 and 2010. She left for a year, and when she came back, could only get a similar unit for $1,025.)

What if, instead, they could walk in and rent a small room for six months or a year until they earn enough money to get more space, if they wanted it? That could do a few things:

• Take the pressure off rowhouses that would be better used by young families who might otherwise move to the suburbs.
• Allow more people to live around metro stations and not need cars.
• Prevent people from moving to Arlington in search of cheaper apartments.

It's especially important in D.C., where height limits prevent apartment buildings from responding to as much demand as there is in popular neighborhoods. That would do a lot to help out neighborhood retail and restaurants—not just because of the additional people, but because those people would have more money to spend on sandwiches, or whatever. It might allow some of those in this troublingly immature generation to move out of their parents' houses. Of course, this kind of housing needn't be limited to young people, either; it would be equally useful for adults who've lost their apartments and want to stay off the streets, without paying for a hotel or waiting in line for city assistance.

The city could make this happen. Right now, they're piloting a program that will pay people for living near where they work. Why not instead offer tax incentives for single-room occupancy buildings near Metro stations, or sell off city land with the requirement that it be used for this purpose? Places like Parcel 42 in Shaw, Hill East, and still-empty lots in NoMa would be ideal locations. At a time when it's more difficult to make housing affordable through subsidies, apartments can at least be made affordable through size, and I guarantee they'd lease up immediately.

Unfortunately, apodments will probably run into resistance in some neighborhoods that don't even like rentals at all. If it does, it should be ignored—the need for affordable, flexible housing is too great.

Of course, like many mysteriously unused plots of land, the 13,000 square foot site has a long history. "Temperance Row/Court/Alley", as it's been variously known, housed alley dwellings until they were demolished in the 1950s. It was traded back and forth between private owners, until the Public Welfare Foundation, headquartered in the True Reformer Building on 12th Street NW, bought it in 1999. A few years later, in partnership with Manna, Inc., they tried developing 10 single family rowhouses, but the Board of Zoning Adjustment said the lots were too small for the density they wanted, despite support from community groups and city agencies. The application popped up again in 2008, but the plan never came to fruition.

Things may be looking up for the vacant parcel. In May, another U Street nonprofit—CityFirst Enterprises, which helps finance affordable housing projects—bought the lots for an amount not specified in city records. They're not quire sure what to do with it yet, but they're an experienced outfit, with access to capital to make something happen.

"We acquired the site recently with the specific intention to support CFE’s mission to create permanently affordable housing in the District and gentrification response," writes executive director Dave Wilkinson. "We are currently exploring how best to leverage this land to serve this mission."

Even if it could become a garden like Bloomingdale's Crispus Attucks Park or the Columbia Heights Green, that would be better than the useless non-space it is now.

Public housing in Ward 8. (Lydia DePillis)

Last week, the Brookings Institute came out with an update on the city's progress on a landmark set of recommendations from back in 2006 on how to deal with the affordable housing shortage. The verdict was mixed: Some laws have been enacted and homes built, but the recession whacked most of the public subsidies for the creation and preservation of reasonably priced places to live. Considering that reality, the report's authors made a new set of recommendations for how the District ought to proceed with the meager funds available.

What jumped out at me, though, was the uncertainty around how much affordable housing we even have. "It is not yet clear how the supply of affordable housing units in the District has changed since 2006," the report reads. "Some housing advocates believe the city continues to lose affordable housing, while others believe the District is making progress."

What? How can you believe different things about what should, theoretically, be a concrete number? In this case, the authors define "affordable" as a home that requires a person making less than 80 percent of the area median income to spend less than 30 percent of their income on rent or a mortgage, whether or not public funds are involved. The problem is, there's no central clearinghouse for that kind of information—which makes determining whether we've made any progress pretty much impossible.

Here's what we do have: There's the American Community Survey, which gives some data about how much housing exists and how much people are paying for it. There's the Housing Authority's dchousingsearch.org, which landlords can voluntarily add their properties for rent or for sale. And there's a database maintained by the Deputy Mayor for Planning and Economic Development that's supposed to catalogue all the housing developed or preserved using District funds. But its accuracy and comprehensiveness depends on how successful DMPED staff are at harassing the various agencies who deal with housing to enter properties into the system.

"That should be the best database for us," says Brookings' Benjamin Orr, who authored the report with District research doyenne Alice Rivlin. "The problem is that it's not."

To address that problem, a couple dozen housing-related advocacy groups have started the D.C. Preservation Catalog, which is supposed to be a parallel system that also documents things like inspection scores and whether a property is at risk of losing its Section 8 contract. But ultimately, wrote advocates in their transition report for the incoming Gray administration, the District should maintain the inventory and make it publicly accessible.

That seems like as concrete and fundamental a short term goal as you can get.

While visiting the now-closed Colorado Kitchen on 14^th Street, Massey stumbled across something she’d never heard of before: A 36-unit art deco apartment building on Colorado Avenue marketing “shares” of the property, rather than individual condominiums. Massey could pay $2,000 for a cozy one-bedroom unit, and then $850 per month as a “carrying charge” to keep paying the long-term mortgage on the building, along with the costs of keeping up the building.

“That’s like homeownership!” Massey thought. Well, not exactly—buying a share is kind of like the down payment on your own house, and the carrying charge feels like rent or a condo fee. But it’s different: The building is what’s known as a limited equity cooperative, in which residents are both tenants of the corporation that owns the building, and also shareholders. There’s no landlord profit, and they exercise collective control over how the property is run.

Limited equity cooperatives arose in the 1970s, when tenants got the right of first refusal to purchase their buildings when they went up for sale. With loan assistance from the city government, even low-income tenants could go in together, and restricting the amount of equity they could build allowed the property to remain affordable for the long term.

In the mid-2000s, as housing values were again rising and developers eyed apartment buildings for investment opportunities, the Coalition for Nonprofit Housing and Economic Development did a landmark inventory of how many limited equity coops remained in the city. What they found: While 18 percent of those units had been converted into condos, and five percent had gone into foreclosure, 75 percent continued as coops, and were predominantly in good financial health. Another study done this year has found that the number remains steady, with 84 buildings comprising 3,080 units across the city (with the highest number in wards one and seven).

Maintaining a healthy coop isn’t easy—as Lea Franklin learned when she and fellow tenants bought the Colorado Avenue building back in 1995. They secured loans from the city’s Department of Housing and Community Development and Housing Finance Agency, as well as a five-year break from property taxes, in exchange for the coop’s limited-equity status and the stipulation that some units be reserved for very low-income people.

Over the years, however, after Franklin gave up her board responsibilities, the building’s finances started to deteriorate. The new board was “totally corrupt,” Franklin says, exempting themselves from rent and allowing the building to fall $30,000 behind in its gas bills. “We were at foreclosure’s doorstep,” she says. And then, “We just got busy.”

With help from the Community and Economic Development Law Clinic at the American University School of Law, Franklin worked to boot out the malefactors and put the coop back on sound financial footing. That meant hiring a competent management company to take care of facilities issues, and get as many of the shares sold as possible in order to keep current with the mortgage. There are still $300,000 worth of necessary renovations, and it’s hard to raise that money without a fully occupied building—but it’s hard to bring people in when the building looks shabby. Meanwhile, their McKinney Act loan matured last November, and the board is looking for another lender to help them cover the gap—and that’s as difficult for a limited equity coop to find as it is for anyone else.

The key to keeping a coop on the level is bringing in people you can work with. D.C. coops aren’t as insane as those in New York City, for example, where the difficulty of getting into coop buildings is legendary. But the board does have enough control to shape a trusting community, which sometimes feels more like a college dorm for adults than an apartment building.

“I brought in everyone I could,” says Massey. ““When we say we know our neighbors, we know our neighbors.”

“Once you get good people, you’re good,” agrees Franklin.

More specifically, the NLIHC calculates the "housing wage," which is the full-time hourly wage a household would need to earn in order to afford the fair market rent for an apartment, paying no more than 30 percent of their income on housing. For D.C., that's $28.10; Hawaii's is $31.08.

Of course, that's a little misleading—D.C. is the only solely urban jurisdiction in that ranking, so rents will inevitably be higher. But it's not that far off from the highest-ranked metropolitan area, Stamford-Norwalk, Conn., which comes in at $34.62. And the most instructive numbers are those comparing D.C.'s rents with the median renter's income, which is $38,210. You'd need to make $58,440 in order for the fair market rent for a two-bedroom to be considered affordable. 68 percent of D.C.'s rental population—55 percent of the entire population—doesn't meet that bar.

All of which will probably be used by the folks rallying tomorrow for affordable housing programs in D.C.'s 2012 budget.

Basement, getting redone. (Lydia DePillis)

Here's the lesson of Gibson Plaza, the 10-story Shaw behemoth housing mostly Section 8 tenants: If you suffer through bad conditions long enough, you might just be there when a fantastic upgrade comes around.

The 217-unit building hadn't had a major renovation since it was built, back in 1974, by the development arm of First Rising Mt. Zion Baptist Church. Management tried five times to get financing for a rehab, but again and again banks turned down their applications, in part–according to Deacon Harold Gilliard–because of the property's nonprofit ownership. Finally, the Department of Housing and Urban Development committed $22 million, the D.C. Housing Authority kicked in another $6.8 million, and the District Department of the Environment gave $1 million for green upgrades.

Brand new kitchen.

The process began back in July, and re-skinning of the outside is moving quickly. But the biggest changes are inside, where every unit is getting being completely redone, from floors to appliances to lighting to internal systems like HVAC and electricity. They're installing trash chutes and water on each floor–before, maintenance staff had to go down to the basement and bring water upstairs to mop. A third elevator will serve 33 units newly outfitted for handicapped use; many residents have been there since the building opened nearly 40 years ago, and now may continue to age in place.

Construction is moving from the top floors down. The basement, though, represents quite a bit of gained space. They'll add a fitness room and more storage units, as well as a computer-equipped learning center that management hopes will teach Chinese, Spanish, and English language classes (the resident population is 64 percent African American, 34 percent Asian, and 4 percent Hispanic).

Residents have had to move around the building during the renovations, while some have lived with relatives elsewhere and others have stayed in hotels paid for by management. But everyone will have the ability to return, Gilliard promises, and won't

View from the top floor. (Martin Moulton)

pay higher rents when they do: Energy efficiency retrofits make the building less expensive to run.

All in all, a nice reward for sticking around.

An old hallway.

A new hallway (Martin Moulton)

]]> http://www.washingtoncitypaper.com/blogs/housingcomplex/2011/02/11/construction-watch-gibson-plaza-made-over-inside-and-out/feed/ 3 http://www.washingtoncitypaper.com/blogs/housingcomplex/2011/02/10/houses-of-the-lord-the-biggest-producer-of-new-affordable-housing-in-d-c-god/ http://www.washingtoncitypaper.com/blogs/housingcomplex/2011/02/10/houses-of-the-lord-the-biggest-producer-of-new-affordable-housing-in-d-c-god/#comments Thu, 10 Feb 2011 13:04:51 +0000 Lydia DePillis http://www.washingtoncitypaper.com/blogs/housingcomplex/?p=17912

The Temple of Praise, this time empty. (Darrow Montgomery)

Walking into the Temple of Praise near the end of a service is like lifting the lid of a tea kettle: The energy inside the Southern Avenue SE church is so intense, with worshipers dancing and wailing and fainting in the aisles, that it seems like it could boil over at any minute. Even when the fervor subsides and worshipers trickle out, more flow back in to take their places for the next service—there are three on Sundays, each packed to the gills.

The interdenominational Temple of Praise—where Ward 8 Councilmember Marion Barry is a member—is the closest thing D.C. has to a megachurch. It’s growing fast, having already overpopulated the cavernous, mall-style building it constructed in 2003, and is looking to build another facility while turning the old one into a charter school. But the house of worship’s tremendous energy has also been channeled in other directions: With city financing, it constructed transitional housing for homeless women in 2007, will soon open a facility for female ex-offenders, and plans to break ground this year on 45 affordable townhouses on three acres behind the church.

And Bishop Glen Staples isn’t stopping there. He’s working on building a medical clinic, and wants to construct senior housing and a new community center, as well as a credit union, local retail, and restaurants—which neither the market nor the government have brought to that part of Ward 8 (even the local McDonald’s is vacant).

“There’s nothing here,” says Staples, taking a break in his dark wood and leather-trimmed inner sanctum, while the noon service thunders outside. “I don’t know if politicians are able to do anything, if they want to do anything, I don’t know, but I do know nothing’s been done. So it’s incumbent on us to try to do something.”

“Doing something” has been facilitated by contributions from the burgeoning congregation. In 2003, the church created its own community development corporation in response to the Bush administration’s faith-based initiatives program, allowing it to take advantage of federal grants. Staples also tapped people with serious legal and development expertise to run it, and now dispenses real estate advice to the 200-odd churches that have affiliated with Temple of Praise, at large conferences that have both a spiritual and very earthly curriculum.

Temple of Praise’s development program is exceptional, but it’s hardly unique. There’s a building boomlet underway in the city’s houses of worship, as congregations capitalize on increasingly valuable land they’ve been sitting on, and respond to a desperate need for affordable housing. Catholic Charities just opened a glittering new complex in Eckington. A 60-unit affordable rental building sponsored by Bible Way Church is under construction at 1st and K streets NW. Emory United Methodist Church plans senior housing, affordable rentals, and transitional housing next door to its church on Georgia Avenue. Israel Baptist Church in Brentwood is working on senior housing, a community center, and new health clinic. Matthews Memorial Baptist Church broke ground last summer on 99 affordable rentals on Martin Luther King Jr. Avenue SE, as part of the New Communities project for Barry Farm just down the hill.

There’s so much going on that At-Large Councilmember Michael Brown, who chairs the Committee on Housing and Workforce Development, is putting on an “interfaith housing summit” in late February to connect house hunters with religious groups.

The particularly important thing here: These are the kinds of building projects many neighborhoods either grumble about or reject altogether. A church’s willingness to put them in its own neighborhood demonstrates a confidence in its ability to be a positive and stabilizing influence, re-knitting an urban fabric shredded by drugs and crime, in places where private capital would never voluntarily go.

And capital, increasingly, is something that churches are equipped to marshal and deploy. “I believe the Bible also teaches not only about spirituality, but economics,” Staples says.

—-

Of course, houses of worship building actual houses isn’t a new phenomenon for Washington. Some of the biggest apartment complexes in the District are church-sponsored, like Gibson Plaza in Shaw and the Golden Rule Apartments off New Jersey Avenue NW, both built in the years following the 1968 riots.

But churches are also connected to their congregations, and some left the city in the 1980s or downsized to smaller buildings. Many buildings were bought by other religious organizations, like the Chinese Community Church’s 2006 purchase of the old Corinthian Baptist Church at 500 I St. NW (which itself was a synagogue for years). Not all of them made it back to productive use, though—Friendship Baptist Church on Delaware Avenue SW, even after being bought by an investor and being approved for residences and nonprofit office space, has yet to find a new occupant.

As land in the city became more valuable over the last decade, churches raised money for their own renovations by selling rights to developers for condos or office space, or partnering with them to build mixed-use facilities, like First Congregational’s glassy new building at 10th and H streets NW downtown, where the church will occupy the first two floors.

About four years ago, the national housing finance non-profit Enterprise Community Partners saw an opportunity being missed. After an inventory of the region’s religious institutions, it identified 747 houses of worship in D.C., comprising some 2,000 lots on 670 acres. The organization reached out to good candidates, and now have about 20 churches working with it on some aspect of developing housing, with plans to deliver hundreds of units by the end of 2012.

“The name of the game has been preservation of existing affordable stock,” explains Enterprise vice president David Bowers. “But at some point, there needs to be a productive angle on it.”

Enterprise is like a one-stop-shop for faith-based development: They’ll do an organizational capacity assessment, identifying how a church should set itself up for building projects. They’ve got predevelopment grants, a battery of real estate consultants, pro bono legal assistance, and relationships with banks willing to underwrite the whole operation. (From a lender’s perspective, churches can be both a risk—since they’re rarely willing to put up their main asset as collateral—and a reliable investment: If they’ve been in one place for 100 years, they’re not likely to pick up and leave on a moment’s notice.)

From a church’s perspective, developing housing is attractive as well. Land actively used for religious purposes isn’t taxed—you’d be hard-pressed to find any churches on the District’s tax sale list. But properties they might have acquired and allowed to sit empty are, sometimes taxed at the higher vacant property rate. Plus, once the project is built, even affordably-priced housing creates a long-term revenue stream.

That doesn’t mean it’s easy. Allen Chapel AME, on Alabama Avenue SE, decided to build 93 units of senior housing after getting a bequest earmarked for the purpose from a congregant. But it took years to clear their vacant land of liens, figure out whether the site had human remains underground, and then obtain a property tax abatement to get them out of a financial hole—all of which required learning new tricks.

That’s the hardest part for churches taking on ambitious building projects: Slow-moving, bureaucratic bodies don’t always operate at the speed of the money they need to make things happen.

“I always tell folks that people in the development community think on a quarterly timeline,” Bowers says. “People in the faith community tend to think through a timeline of eternity. The sense of urgency can be a little different.”

It's too late for Dakota Crossing.

If the word "zoning" makes your eyes glaze over, get yourself some coffee or something and try to focus for a second.

Here's the thing: For a few years now, the Office of Planning has been working on revamping the rules that govern how the city looks and feels. Regulations that dictate how many parking spaces a building needs and where they should be placed, what kind of landscaping is required, the size and dimensions of open space in and around apartment buildings, and the potential for commercial uses in residential neighborhoods are all being tweaked and modernized.

However, the slow-moving process may be completed too late to affect the wave of private sector development that's now working its way through the pipeline. If that happens, many of the progressive changes that are incorporated into the front end of development planning won't make it into new projects (although in many cases, the Zoning Commission and Board of Zoning Adjustment have already been granting exceptions to developers who want to incorporate these changes anyway).

Recognizing this, David Alpert & Co. have been pushing for one of the most critical pieces of the zoning revision–regarding large parking lots in front of commercial centers, which are easy to build and difficult to erase–to be instituted as quickly as the process allows, through a "text amendment" that patches the current code. It's already too late to fix the problem of acres of surface parking in places like Dakota Crossing. But if it sails through the Zoning Commission, it may apply to the new Aldi being built in Ward 5, and it could take a little longer and still impact the Walmart in Ward 7, which will have to be approved as a planned unit development.

There are other pieces of the zoning revision that would impact more projects if they were instituted sooner, namely the Green Area Ratio regulations, which would require a certain amount of landscape elements like vegetative roofs, tree plantings, green walls, and permeable floors. Other pieces are permissive rather than proscriptive, meaning that they will allow neighborhoods to evolve in different ways: For example, proposed rules for residential zones will allow more retail establishments in the middle of streets, which can be incorporated into existing buildings at any time.

The issue of timing, of course, recalls the whole problem with another big change that didn't come fast enough: Inclusionary Zoning for affordable housing, for which regulations weren't written until the last of the projects built before the real estate crash made it through the regulatory process. You can have the most progressive rules in the world, but they don't matter unless things are being built to be affected by them.

A good-looking addition. (Lincoln Westmoreland Housing Inc.)

It's a tentative plan, but a plan nonetheless: Lincoln Westmoreland Housing Inc. is moving forward with a 50-unit apartment complex on 7th and R Street NW, right next to the 10-story behemoth constructed right after the 1968 riots.

The new building, designed by Shalom Baranes architects, could not be more ideally located: It sits directly above the Shaw metro station (part of the land will be purchased from WMATA), and across the street from the new Shaw library. It will replace a decked-over parking lot, have retail on the ground floor, and still leave some green space for a sculpture installation.

Financing is still up in the air, which makes the actual timeline nebulous. According to a representative of the non-profit developer, some of the needed capital will come from low-income housing tax credits, which means the units would likely be priced to be affordable for people making 60 percent of the area median income. They already received some funding from the city, in the form of a Neighborhood Investment Fund grant for studies to get the project off the ground. Next stop: Advisory Neighborhood Commission 2C, and the Board of Zoning Adjustment. The Shaw development roll continues!

Full plans after the jump.