While there was sustained drama regarding tax cuts for businesses and wealthy homeowners on Tuesday within the Wilson Building, District lawmakers seamlessly approved millions of dollars of funding for various programs designed to tackle affordable housing and homelessness as part of D.C.’s next annual budget. After a second vote, the $13.8 billion budget will take effect on Oct. 1.
Below are highlights related to housing and economic development from the Council’s tentatively approved funds for fiscal year 2018. The 13-member body will vote again on the budget June 13. Local taxes support almost three-fourths of the appropriations and federal taxes support the rest.
“We can celebrate our spending plan, but it is equally important that these tax dollars be spent wisely,” Council Chairman Phil Mendelson said in a statement. “Throwing more at problems does not necessarily solve them, and spending carefully and effectively does mean each dollar goes farther. It is on us, the Council, through our oversight powers, to press for careful and effective spending.”
The Council approved Mayor Muriel Bowser‘s continued investment of $100 million annually in the District’s Housing Production Trust Fund, the main source of government-provided funding for development projects that include affordable housing. The Council also approved a separate $10 million fund proposed by Bowser that will focus on preserving existing units of affordable housing within D.C. These investments follow a report released by the Office of the D.C. Auditor in March that determined the District has not consistently managed the fund since it launched in 2001.
Cash Assistance for Low-Income Families
Based on the recommendations of a working group composed of beneficiaries, advocates, service providers, and District officials, lawmakers voted to institute reforms to the Temporary Assistance for Needy Families (or TANF) program, which offers low-income families cash, job training, and childcare. Despite that TANF helps more than 15,000 residents pay rent and other bills, an eligibility “cliff” after five years of enrollment would have cut off nearly 6,000 families—including over 10,000 children—from these benefits as of Oct. 1, 2017. Before the cliff takes effect, the typical average payout for TANF benefits is nearly $400 a month.
The Council chose to eliminate the cut-off after advocates criticized it as arbitrary. Following the guidance of experts, it also divided TANF benefits into child and parent portions comprising 80 and 20 percent of the entire benefit, respectively. The purpose of this distribution is to incentivize parents to comply with work requirements in the program, while aiming not to harm their children. In sum, advocates claim, TANF helps families remain in stable housing and avoid homelessness.
The second-ever youth-homelessness census conducted by the District in fall 2016 counted 385 homeless youth, an increase of eight percent over the previous year, and more than 200 “housing insecure” youth. D.C. seeks to end youth homelessness by 2022.
To do so, the Council increased the number of emergency shelter beds, transitional housing units, permanent supportive housing units, and reunification/aftercare spots for youth relative to the mayor’s original proposed budget. The budget also now contains $500,000 in funding to house youth transitioning out of foster care, which amounts to roughly 100 additional housing vouchers, and $250,000 in funding for tutoring services.
The Council enhanced Bowser’s proposed investments in adult-homeless services by more than $12 million. $3.4 million of that raise is going to D.C.’s Local Rent Supplement Program, which is administered by the Housing Authority and provides subsidies to families who make less than 30 percent of the area median income, or about $33,000 for a family of four. This will provide at least 200 extra units of housing for low-income families. The FY 2018 budget also includes increases in funding for permanent supportive housing and targeted affordable housing for both individuals and families. These offer case-management services coupled with long-term housing vouchers.
The District identified almost 7,500 homeless people in a snapshot-survey performed in January, an overall decrease of 10.5 percent and a family decrease of 21.8 percent as compared to 2016.
To help bankroll the increases in permanent supportive housing and targeted affordable housing for families, the Council reallocated $3 million that Bowser had placed toward the troubled Rapid Rehousing program. “Rapid Rehousing can be an effective tool for stabilizing some families, but it is not an appropriate intervention for all families,” a Council report on the budget reads, echoing concerns voiced recently by advocates and housing specialists. “The placement rarely takes into account the family’s ability to secure decent, safe housing with a Rapid Rehousing voucher,” which usually terminates after a year.
Additionally, the Council found funding to add an additional housing coordinator who specializes in domestic violence-related cases of homelessness to the District’s staff. Currently, there is only one such counselor at the Virginia Williams Family Resource Center, per the Council report, and that person only works four days a week. The 2017 homeless survey “revealed that 28 percent of adults in homeless families have experienced domestic violence” at some point—and that “12 percent of homeless families’ current episode of homelessness is related to domestic violence.”
Housing Code Inspections and Fines
After reports on atrocious housing conditions at properties owned by D.C. landlords like Sanford Capital, the Council slightly increased and reallocated funding for the Department of Consumer and Regulatory Affairs to hire four housing code and construction code inspectors. Lawmakers also doubled DCRA fines for the most egregious violations—those that threaten public safety. (All the same, the District may have a hard time litigating housing cases in local administrative court.)
Combating Housing Discrimination
The Council identified funding for five new staffers within the District’s Office of Human Rights to enforce a law approved last year that bars landlords from asking about a prospective tenant’s criminal history—whether convictions or allegations—before making a housing offer. The legislation reflects D.C.’s “ban the box” law in employment, where employers are not initially allowed to inquire about a job applicant’s criminal background.
Under this housing law, landlords can ultimately rescind a housing offer for a “legitimate reason,” such as a conviction of murder, manslaughter, arson, assault, sexual abuse, and more. The law contains penalties starting at $1,000 for landlords that OHR determines not to be in compliance, and a statute of limitations of one year after the discrimination occurred.
Although Bowser proposed cutting the District’s Emergency Rental Assistance Program by $2.75 million, the Council restored almost $770,000 of that funding to stem evictions by helping tenants pay overdue rent. “According to testimony given by the Washington Legal Clinic, even before the reductions, ERAP did not come close to meeting the full needs of the community,” the Council report states.
In the FY 2018 budget, the Council also put $4.5 million toward a pilot program to provide low-income tenants guaranteed legal representation in eviction cases, a form of what’s known as “Civil Gideon” after the landmark Supreme Court ruling that established the same right for criminal cases. There were roughly 33,000 eviction cases in D.C. last year, and these showed a huge imbalance: 90 percent of landlords had lawyers, while fewer than 10 percent of tenants did.
In the same vein, the Council allocated funding for two “attorney advisors” to be housed within the little-known Office of the Tenant Advocate. They are to assist renters in landlord-tenant court.
Tracking Rent-Controlled Units
Advocates and officials say one of D.C.’s main mechanisms for preserving affordable housing is rent control, which generally limits annual rent increases (subject to a few exemptions landlords can apply for—and sneaky tactics) to two percent plus inflation. And yet, the District government admits that it isn’t sure how many rent-controlled units exist under the program (it’s been around since 1985). A 2011 study by the Urban Institute did find that almost 80,000 units across nearly 4,800 buildings are “potentially subject to rent control,” because official records were incomplete.
Two years ago, through its budget process, the Council charged the Department of Housing and Community Development with establishing a “user-friendly, internet-accessible, [and] searchable” “rent-control clearinghouse” for the District. The Council’s housing committee says this still hasn’t been done, so it’s transferred that responsibility to OTA in the FY 2018 budget, through $500,000.
First-Time Homebuyer Tax Breaks
Although the Council’s decision to raise the threshold for exemptions to D.C.’s estate tax from $2 million to $5.5 million met controversy, new tax cuts for first-time homebuyers that it unanimously approved late last year did not. In fact, the law has been on the books since April. But because it entailed a loss of projected revenue—an estimated $51 million over the next four years—it had to be compensated for in the budget. In part to accomplish this, the Council made the legislation a lot more progressive: It now sets a purchase-price limit of $625,000 on “primary residences” that first-time homebuyers acquire, whereas before there was no limit on a property’s purchase price.
Per the budget, deed-recordation taxes will soon be set at 0.725 percent of a home’s price for eligible homebuyers. Currently, they’re set at 1.1 percent for homes selling for less than $400,000 and 1.45 percent for homes selling for more than $400,000. After the Council passed the bill last year, Bowser returned it unsigned, expressing concerns that the tax breaks would divert revenue from D.C.’s affordable housing fund and be redundant with other first-time homebuyer incentives.