City Paper is not for tourists
Since announcing it in February, Mayor Muriel Bowser and her administration have been at pains to persuade residents across the District and lawmakers in the Wilson Building that her plan to close the D.C. General family homeless shelter is cost-effective.
The plan calls for smaller, ward-based sites replete with services that could accommodate nearly 250 families total—the number now living at D.C. General—on a short-term basis. They would have between 30 and 50 units each, costing hundreds of millions.
Under Bowser’s proposal, most of the sites would be leased, meaning D.C. would be on the hook for rent and real-estate taxes. As critics of the plan have noted, that framework doesn’t provide a permanent solution, insofar as developers could sell their land at the ends of the leases. It would also be pricier than owning sites, according to an analysis by the Office of the Budget Director.
But on Monday, the D.C. Council circulated a revised version of Bowser’s original proposal, requiring that the District own all the sites that would replace D.C. General. Councilmembers will vote on it for the first time today. Here’s how it differs from before:
To own or not to own?
Rent no more: The legislation mandates that the administration own all the shelters. Only the Ward 7 and 8 sites that Bowser had proposed (located at 5004 D St. SE and 4200 6th St. SE, respectively) are owned by D.C. The rest belong to developers.
“It is in the best interest of the District to construct these new temporary-shelter facilities on District-owned land, to avoid the disruption to the provision of services in the continuum of care that can be expected to accompany the eventual expiration of a lease,” the Council’s revision explains.
Are specific sites shifting?
Here’s where it gets interesting: Under the Council’s bill, the sites in Wards 3, 5, and 6 would have to change from those in the mayor’s proposed plan. The Ward 1 site would remain the same; however, the District would have to purchase it from its current owners, or—failing that—exercise eminent domain. The Ward 4 site could remain the same or change to land D.C. already owns.
Ward 1: 2105–2107 10th St. NW and 933 V St. NW (no change)
Ward 3: 3320 Idaho Ave. NW (change from 2619 Wisconsin Ave. NW)
Ward 4: 5505 5th St. NW (no change) or 8th and Kennedy streets NW
Ward 5: 326 R St. NE or 1700 Rhode Island Ave. NE (change from 2266 25th Place NE)
Ward 6: Second and K streets NW (change from 700 Delaware Ave. SW)
How much is owning the sites expected to save taxpayers?
Some $165 million over the terms of the proposed leases (or $89 million in present value), according to a budget report. The Office of the Budget Director derived those figures based on the letters of intent for the proposed sites as well as other factors:
“Facilities costs are higher in the ownership structure because it will be incumbent upon the District to bear 100 percent of the costs of maintenance at the District-owned facilities,” the budget report notes. “Under the leasing proposal the District will not own the properties and will have to pay real property taxes to itself, where there will not be any taxes owed on a District owned asset. Debt service will be higher under the ownership structure because the District will be borrowing General Obligation debt to pay for the costs of construction for all the sites.”
But wait: Won’t buying and constructing the sites cost more money upfront?
Of course. But the Council plans to pay for it—$105 million total, in land-acquisition and construction costs—by reallocating that amount within the fiscal year 2017 capital budget. The price tag includes $17 million in contingency funds for any cost variances:
Alright, what’s the catch?
The District had already allocated $40 million toward the shelter plan last year. So to produce the remaining $65 million needed for the capital costs associated with owning the sites, lawmakers pulled roughly $50 million from funds intended for modernizing Coolidge High School in Ward 4.
How come? Because the project isn’t “shovel ready,” according to the Council’s Committee on Education, and the money will likely go unspent in fiscal year 2017. “The Council recognizes that identifying the source of these funds requires making difficult choices and trade-offs between competing priorities,” a report says, adding that funds for Coolidge’s modernization will become available in fiscal years 2018 and 2019. (You can get into the weeds on the reallocation of those funds starting on page 13 here.)
How bad were the original deals anyway?
The sites Bowser had proposed for Wards 1, 3, and 6 were significantly overvalued under the letters of intent outlining the leases, Integra Realty Resources found in an analysis ordered by the Council. In all, D.C. would have spent $23 million over market value:
“Not only are the rents for several of the proposed sites above-market, and not only does the District plan to pay for construction (e.g., Ward 1) with the effect of enhancing the value of the asset, but then the city has nothing to show for its investment at the end of the leases,” a committee report on Bowser’s original plan says. (You can read the full analysis beginning on page 8 here.)
Is Bowser happy with the changes?
It doesn’t seem like it. John Falcicchio, the mayor’s chief of staff, told the Post on Monday that the Council’s changes may “delay the closing of D.C. General by at least a year or more,” thus missing the expected fall 2018 deadline the administration imposed. He also told WAMU that the District “shouldn’t have to choose” between school modernization and constructing the replacement shelters for homeless families. (A Bowser spokesperson didn’t respond to City Desk’s request for comment yesterday afternoon.)
What about individual Councilmembers?
Wilson Building watchers will find out for sure on Tuesday, when the Committee of the Whole is scheduled to mark-up the draft revision before an additional legislative meeting and first vote. Bowser’s allies could seek to limit the extent of the COW’s changes to her initial proposal. Still, at a press conference on Monday, Council Chairman Phil Mendelson appeared pleased that the draft print addresses many of the issues regarding the plan that residents have raised concerns about: cost, permanency, and zoning.
“Given where we are today, if the Council did nothing, the executive could not meet their schedule of fall 2018,” he told reporters. “With the changes that we’ve been working out, it reduces the friction with regards to zoning approval,” making the 2018 closure of D.C. General “possible” rather than “doubtful.” (Several of Bowser’s proposed shelter sites would’ve required zoning variances.)
So what’s next?
The Council is set to convene at 10 a.m. Ultimately, though, replacing D.C. General won’t solve the District’s homelessness crisis.
“Closure of D.C. General is an important step, and while this plan addresses one crucial area of need within the homeless services system, many pressing issues remain to be addressed at great expense,” a Council committee report explains. “Though this plan will ensure that D.C. General is closed, it does not address the hundreds of families that remain sheltered in motel rooms in the District and elsewhere or additional investments will be needed to address deficiencies in the single adult shelter system. Nor does this plan address the costs necessary to continue to move ahead to address the District’s affordable housing crisis.”