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Fight's on at the Wilson Building.

Broke, that is.

Last week in budget hearings, housing advocates warned Councilmembers that the primary pot of money used to build and renovate affordable units in the District will be completely out of money by the end of this year.

A bit of wonky background: The Housing Production Trust Fund was created in 1989, but had no dedicated source of funding until 2002, when Mayor Anthony Williams signed legislation setting aside 15 percent of deed recordation and transfer tax revenues for the fund. Between 2001 and 2008, the $204 million spent from the fund leveraged $773 million in housing development, amounting to 8,900 units either completed or in the pipeline. It’s also the key enabler of D.C.’s Tenant Opportunity to Purchase Act, since most low-income tenants associations couldn’t actually take advantage of that opportunity without the long-term, low-interest loans financed by the trust fund.

Three years ago, though, the fund’s source of revenue—real estate transactions—started slowing down, before falling off a cliff in 2008. To remedy this, at the end of 2008, the Council unanimously passed legislation that would have supplied the trust fund with $80 million every year. But the money has never actually been appropriated.

Now, according to the Department of Housing and Community Development’s own estimates, the fund will be over-obligated by $88 million by the end of the year. A competitive request for proposals hasn’t been issued since 2008—there used to be at least two per year—and no more are projected until 2012. Tenant purchases stopped getting funding about a year ago.

All this, with 28,000 people on DHCD’s waiting list for affordable units.

“Some of the housing that we would like to put on the market will be delayed by two to three years,” said Nechama Masliansky, of So Others Might Eat, at a Housing and Workforce Development committee hearing last week. “We’re ready, willing and able, but there’s a funding gap.”

Long term, the D.C. Fiscal Policy Institute has argued that the fund needs a more stable funding mechanism, like specifying an amount that ought to be dedicated from deed transfer taxes, rather than a percentage. For now, though, non-profit housing advocates have decided to ask for $10 million as a band-aid from this year’s budget.

Meanwhile, it’s hard for affordable housing folks not to get discouraged.

“If they as advocates notice that there’s no funding coming down the pike, it kind of makes it hard to organize and energize their base,” said Amy Garland, director of advocacy at the Coalition for Nonprofit Housing and Economic Development.

Councilmember-at-large Michael Brown was sympathetic, saying that the 2011 budget as submitted “continues to show a lack of compassion and a lack of focus.” But everyone’s asking for money these days, and he wasn’t making any commitments.

Image from flickr user crumj.