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Looks like a Zoning Commission hearing this evening on Eastbanc’s plan for the West End Library and Firehouse is going to be more exciting than normal, with folks from Occupy D.C. and other assorted activists on hand to protest “the arbitrary suspension of existing zoning rules in the interest of multinational corporations.” As part of its application for more density on the two sites, Eastbanc is requesting a waiver of the “inclusionary zoning” rule that requires developers to set aside 8 percent of their units for people making less than the area median income, which activists are decrying as a shameless giveaway of affordable housing.

Of course, the real story is more complicated. The BizJo explained most of it back in June, when the zoning application was originally submitted. I’ll try to condense.

The project is composed of two buildings: What’s now the squat West End Library at 24th and L Street NW, and the firehouse at 23rd and M. The former will incorporate a new library into a fancy building with 164 high-end condos. The latter will be a more modest 52 rental units above a new firehouse. Both Eastbanc and the city always wanted to make the firehouse building 100 percent affordable, but there wasn’t enough land value left over after building the new public facilities to make that happen.

Originally, the plan had been to fund the gap with a combination of low income housing tax credits, government bonds, and up-front cash to be paid off by additional tax revenue the development would generate over time. But when the proposal came before the D.C. Council for approval, the city’s finances had gotten shaky, and that last piece wouldn’t fit under the District’s debt cap. Now, the city has until April 2012 to figure out how—-or whether—-it can finance those affordable units above the firehouse (8 percent of which will be affordable anyway, since Eastbanc is planning to abide by inclusionary zoning for that building). If it doesn’t, that’s the city’s fault, not Eastbanc’s.

The inclusionary zoning waiver on the library building is a different matter altogether. According to an Eastbanc staffer speaking on background, that was part of the deal all along—-there’s no bait and switch.

That’s not crystal clear from the 2009 land disposition agreement, in which the Office of the Deputy Mayor for Planning and Economic Development determined that “the affordable housing that may be required under applicable laws and regulations…should be placed on the [firehouse] land rather than on the [library] land.” But that’s how Eastbanc remembers it, and the people at the city who made the deal aren’t around anymore, and the people who are in office now support the waiver request, saying that requiring any affordable housing on the library parcel would make it impossible to deliver the two public facilities without a subsidy.

Even the Coalition for Smarter Growth, which fought to get inclusionary zoning passed in the first place, thinks this deal smells okay, because it comes with a library and a firehouse. “We fear a weakening of affordable housing on public land—like in Southwest Waterfront or Parcel 42,” writes policy director Cheryl Cort, who’ll be testifying in favor of the project. “The West End Library is different than a site like parcel 42 where there’s no other public benefit offered.”

If the city can’t come up with the money to make the firehouse building totally affordable, Cort would like to see the units that would have been affordable in the higher-end library building, if it had complied with inclusionary zoning, transferred to the firehouse, so at least the same number of people will have access to below-market-rate housing.

Instead of attacking Eastbanc, maybe Occupy D.C. should attack the debt cap, which makes these sorts of public investments in a more equitable city more difficult. Which, since the debt cap is largely a function of the bond markets, would bring things full circle back to Wall Street.