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Two recent votes by District lawmakers raise questions about how progressive elected officials are when it comes to development and homelessness—all in the midst of an affordability crisis.
On Nov. 7, supermajorities of the D.C. Council approved two controversial measures during a routine legislative session. The first would provide more than $82 million in subsidies for Union Market developers through an economic incentive known as tax increment financing, or TIF. The second would demand that homeless people prove District residency to access emergency shelters, including hotels where more than 600 homeless families currently stay because traditional shelters are cramped.
Before these measures can become law, the Council must approve them again in final action sometime in the coming weeks.
Both bills sparked debate that became barbed on occasion, pitting the most left-wing members of the Council against their more centrist peers. The legislation also drew intense lobbying from developers who endorse the TIF and from advocacy organizations who object to the shelter reforms.
Observers readily pointed out an irony in pols working to ensure economic certainty for some of D.C.’s most privileged businesspeople, and doing the contrary, they say, for D.C.’s most vulnerable.
“Everyone wants to claim they’re progressive and supportive of affordable housing, but they are not supporting low-income residents when they vote,” says Amber Harding, a staff attorney at the Washington Legal Clinic for the Homeless. WLCH and other organizations have expressed concerns that the proposed reforms would keep families who need shelter out of the District’s system.
Mayor Muriel Bowser’s administration has pushed for the two bills since proposing them earlier this year.
But social justice activists contend that the Union Market TIF amounts to a giveaway of precious tax dollars to developers. They and two at-large councilmembers, Elissa Silverman and David Grosso, say growth in this neighborhood would occur without the TIF, and that public funds would be better spent on housing, transit, and other needs.
On Tuesday, the Fair Budget Coalition, which is comprised of more than 60 groups dedicated to alleviating poverty in D.C., cast the Council’s decisions as “an affront to progressive values” in a blog post published on its website. “To vote to give away that sum of money to developers while claiming there is not enough money to support homeless families was a slap in the face to every single District resident who has struggled to find affordable housing,” the coalition wrote.
Under the legislation, shelter applicants would have to present one of 12 specified documents to demonstrate residency, including Social Security paperwork, a valid driver’s permit, a recent pay stub, and an eviction notice issued within the past 60 days. (Bowser had proposed requiring two such documents.) Current law provides exemptions for survivors of domestic violence, human trafficking, and sexual assault, and the bill would also exempt refugees and asylum seekers. But applying for other public assistance, or submitting a statement of a family’s residency in D.C. from a third-party, would not suffice as they do now. (Families who already receive District benefits like food stamps would qualify as residents.)
Due to an amendment successfully moved by Council Chairman Phil Mendelson, the homeless reforms also presume that shelter applicants who have “ownership interest in or [are] on a lease or occupancy agreement for safe housing” do not qualify for placement, unless those applicants can offer “credible evidence” that their housing isn’t actually safe. This standard isn’t as high as the “clear and convincing evidence” threshold in the original bill, but advocates say it’s unnecessary.
“This idea that people are faking it, that there are hoards of people in shelter who don’t need it, but are living in overcrowded, prison-like conditions anyway, is completely ridiculous,” Harding explains.
The Bowser administration has stated that 11 percent of shelter applicants from October 2016 to April 2017 were not District residents, based on their receiving benefits in other states.
Officials counted over 7,400 homeless people in January, representing a 10.5 percent decrease from 2016. Over 5,350 of them—or more than 71 percent—were living in emergency shelter. In part, that’s because District law provides a rare legal right to shelter, which applies during severe weather.
The homeless reforms under consideration are the most sweeping ones to come up since 2005. Some advocates argue that, at best, the reforms wouldn’t help struggling families, and, at worst, would harm them. Bowser and Brianne Nadeau, chair of the D.C. Council’s human services committee, answer that shelters must serve residents in crisis and must not be used to fill gaps in affordable housing.
Advocates counter that the legislation institutionalizes problems with D.C.’s rapid rehousing program, which generally provides a one-year rental subsidy to families leaving a shelter. Because the subsidy is time-limited, families face a massive increase in rent payments after the subsidy expires, and many of them boomerang back to shelter or couch surf.
On a 6-7 vote, lawmakers denied an amendment by Ward 8 Councilmember Trayon White that would have increased the time-limit to 18 months when homeless services providers aren’t able to show that a family could sustain housing without assistance. It’s unclear how much that amendment would have cost the District because White didn’t offer a fiscal impact statement when floating it.
Nadeau opposed White’s measure and told her colleagues, “I understand your compassion, but we have to draw the line somewhere.” She called it “haphazard” and said investing in longer-term subsidies would be preferable.
Moments before this discussion, the Council greenlighted the $82.4 million TIF for a core group of Union Market developers, including Gallaudet University, JBG Smith, Edens, Trammell Crow Residential, and LCOR. TIFs encourage development by allowing developers to borrow money through issuing bonds that are secured by future sales- and property-tax revenue generated by a project. The bonds can pay for infrastructure improvements needed for a project to grow, but impose budget trade-offs.
D.C. has used TIFs for anchor projects in Columbia Heights, Shaw, the Southwest Waterfront, Chinatown, and other neighborhoods. Fiscal policy experts caution that the mechanism should be employed sparingly because it adds to the city’s debt and reduces its borrowing capacity.
A common litmus test for determining whether a TIF is apt involves examining if a project would succeed without the subsidy. (Policy wonks casually refer to it as the “but-for test.”)
For Union Market, D.C.’s Chief Financial Officer found that the TIF was “not necessary for the redevelopment of the [45-acre] site to move forward,” adding that declining the TIF “would not unreasonably inhibit” the project.
Developers envision nearly 8 million square feet of mixed-use space and 20,000 new jobs once Union Market is fully built out, and $140 million per year in estimated tax revenue. To buttress that activity, they asked for $36 million of the total TIF to fund the creation of hundreds of parking spots. Agency officials, though, have said the project doesn’t need so much parking.
Silverman and Grosso sponsored an amendment to divert $18 million of that amount toward additional affordable housing at Union Market and the other $18 million toward a would-be pedestrian tunnel connecting it to the nearest Metro station. The measure was soundly defeated in an 11-2 vote, and the underlying TIF legislation passed.
Grosso says he supports Union Market’s development, but that such subsidies cut away at the District’s safety net for low-income residents. He says other developers not included in the TIF area were angry they didn’t receive public support for their projects. Grosso notes he repeatedly saw representatives of the core group canvassing city hall in the month before the vote.
“I think what’s happening here is we’re stuck in this old-school way of doing things where we’re begging developers to come to D.C.,” he posits. “The fact is, now, developers want to be here.”