Credit: Darrow Montgomery

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Ahead of Mayor Muriel Bowser‘s release of her fiscal year 2020 budget, the DC Fiscal Policy Institute is urging her office to boost investments in affordable housing, to the tune of $200 million.

In a paper published Sunday evening, DCFPI—the leftist think tank whose director, Ed Lazere, ran an ultimately unsuccessful campaign to unseat D.C. Council Chairman Phil Mendelson last year—argues that rising construction costs have diminished the capacity of housing units produced by D.C.’s investment in affordable housing.

The author of DCFPI’s paper, Doni Crawford, estimates that D.C.’s 2015 investment of $100 million to the Housing Production Trust Fund yielded about 1,140 units. But given increases in construction and subsidy costs, Crawford estimates that a level investment would yield about one-third fewer units today than it did four years ago.

“Since 2015, the average per-unit loan amounts of new construction and preservation projects financed by DHCD have substantially increased. Construction costs have particularly skyrocketed for new construction projects, where the HPTF subsidy rose 127 percent between 2015 and 2019,” Crawford writes. “The per-unit subsidy costs for preservation projects—renovating existing housing have increased 21 percent during the same time period. The weighted average per-unit loan amount has risen 60 percent since 2015, from $72,500 to nearly $120,000.” To produce the same number of affordable units, she writes, would require a $150 million investment. And to produce sufficient deeply affordable housing that is, units affordable to those who make about 30 percent of the area’s median income Crawford estimates that D.C. would need a $230 million annual contribution to the Housing Production Trust Fund.

In November, the Washington Business Journal reported that the mayor’s office promised Amazon it would double its financial commitment to the Housing Production Trust Fund, funding it at $200 million annually, if the tech giant opened an outpost in the District. DCFPI will ask the mayor to contribute that amount despite Amazon’s decision to open a headquarters in Crystal City. “D.C.’s housing challenges require a bold solution. Doubling D.C.’s Housing Production Trust Fund to $200 million in FY 2020 would make important progress,” Crawford wrote.

Some groups, including the Office of the D.C. Auditor, have dinged the District for its use of the Housing Production Trust Fund. A March 2018 report from the auditor asserts that the agency responsible for administering the funds, D.C.’s Department of Housing and Community Development, and the Office of the Chief Financial Officer, have “obscured both the true costs of the HPTF and the Fund’s efficiency in producing affordable housing” through their checkered accounting practices. The agency could produce more affordable housing through “stronger management” of the fund, the auditor’s office wrote at the time.