We know D.C. Get our free newsletter to stay in the know.
Mayor Muriel Bowser spent the past few years casting herself as a regional leader on housing and homelessness issues. But at the first sign of a slowing economy, she’s pivoted to a full retreat.
In just about every area of housing policy, Bowser’s new budget, released Wednesday, is a bit stingier than prior proposals, according to advocates and councilmembers working on these issues. The cuts affect not only the easy targets for belt-tightening like eviction prevention measures and vouchers for the homeless, but also programs favored by the deep-pocketed developer class: the city’s main affordable housing loan fund chief among them.
Herronor’s cuts are perhaps not totally unexpected, considering that she managed some previous investments with billions in federal pandemic relief funds that are now drying up. But the reductions have nonetheless surprised budget watchers who believed these issues were priorities for her administration.
“When you just look at the public narrative, that we’re going end homelessness, create more housing, all these things, it’s just not playing out with what they’re doing,” says Daniel del Pielago, organizing director at the advocacy group Empower DC. “It’s really breaking the promises they’ve made to people.”
The change that has generated the most outrage so far is Bowser’s decision to drastically reduce spending on the District’s Emergency Rental Assistance Program, commonly known as ERAP, which is designed to keep people in their homes as they face the urgent risk of eviction due to financial difficulties. The program is seeded with $43 million in fiscal year 2023, and the city has already had to close applications in the expectation that it will run out of money by May (months earlier than ERAP normally runs dry). But rather than putting more cash into the program this year, Bowser chose to leave it flat, and then slash it down to $8.2 million in 2024.
Bowser noted Wednesday that this is essentially a move back to the program’s pre-pandemic funding level, arguing that “circumstances have changed” over the past year that have reduced the need for so much emergency relief.
“People are going back to work,” Bowser told the Council as she unveiled the budget earlier this week, citing the city’s falling unemployment rate and inspiring a round of applause from the dozens of agency heads and top officials required to attend the big event at MLK Library. “We’re not in a pandemic anymore…We have to get back to where we were in terms of true emergency assistance. We need to make sure we’re helping people who are truly in need.”
But that is a puzzling approach according to many in the housing world, who reason that there wouldn’t be so many applications to ERAP right now if people didn’t actually need help paying rent. Del Pielago notes that simply having a low-wage job isn’t a guarantee someone can pay rent (especially as tenants in rent-controlled units face some of steepest price hikes they’ve ever seen). As an organizer who works with people applying for this assistance, he finds Bowser’s insinuations about their motivations particularly upsetting.
“This has become a talking point of the administration, but also of landlords and land owners,” del Pielago says. “The idea that people are gaming the system somehow is just a racist trope that’s been around this country for a very long time, when we know people are in need.”
Bowser argued that the city’s robust rent relief efforts (juiced by federal money) in the pandemic’s first two years should’ve been enough to help people who struggled to make rent. Yet Ward 1 Councilmember Brianne Nadeau, a veteran of many ERAP fights as a past chair of the Committee on Human Services, observes to LL that there are still “people who haven’t gotten their unemployment benefits from the pandemic” who might need help.
Council Chair Phil Mendelson wrote in a statement after the mayor’s budget presentation that “current demand is double the $43 million” currently budgeted for ERAP. What’s more, a coalition of pretty much all of the city’s leading housing advocacy organizations, coordinated by del Pielago, wrote in a March 19 letter to Bowser and the Council that they’re seeing so many eviction filings in D.C. courts that they hoped to see another $50 million sent to ERAP in 2023 and $117 million in 2024.
“We simply have to meet the need,” says At-Large Councilmember Robert White, the new chair of the Council’s Committee on Housing. “It’s going to be an all-hands-on-deck approach.”
White is uncertain what funding level he may try to seek instead, saying he plans to take a “data-driven approach” to determine what the need might be. LL certainly does not envy him in that effort, as it can be a challenge for the Council to find a few million dollars here and there for pet projects after the mayor has already set her budget, let alone the tens of millions at play in this dispute.
Nadeau knows that struggle well from her years tussling with Bowser over voucher funding. And she argues that the D.C. government “has never been realistic about how much is needed for ERAP” in her time in politics, so it is not exactly surprising that this would become a budget flashpoint—recall Bowser moving in 2018 to redirect money from ERAP to fund the collection of stop-and-frisk data mandated by the NEAR Act, a move that managed to piss off two different sets of advocates.
It’s a bit more notable to see Bowser pulling back on efforts to build more affordable housing, given her very public construction goals that come with a 2025 deadline (and the fact that so many of her developer pals stand to benefit from these efforts). She managed to keep $100 million in the Housing Production Trust Fund for 2024, matching a campaign promise from several years back, but that’s a far cry from the roughly $450 million she sent to HPTF last year.
That number was a bit artificially high thanks to some federal funding, but she aimed higher in previous years too, budgeting $250 million in 2022 and $150 million in 2021. D.C. remains the clear regional leader in affordable housing funding, but this is a significant shift for Bowser, especially because she easily could’ve left more money in the fund. The city is required by law to move half of all tax revenues it collects above projections into the HPTF, meaning the fund was set to see nearly $220 million new money. Jenny Reed, Bowser’s budget director, told reporters Wednesday that officials chose to redirect most of that money to close holes left elsewhere in the budget.
“I imagine folks are going to be pretty concerned by that, especially affordable housing developers who have been waiting through several rounds of [loan awards] to get this money,” says Eliana Golding, a senior policy analyst focused on housing at the D.C. Fiscal Policy Institute. “The fact that the trust fund is so low is indicative of how she sees this budget year because it has been such a top priority for her.”
Bowser’s efforts to end homelessness in the city have also won praise from advocates in the past, but here, too, she seems to be pulling back. Specifically, she is curtailing funding for permanent supportive housing vouchers for individuals (which can help people on the street afford apartments where they receive a variety of support services) with a $23.6 million cut proposed for the program. That means the city won’t add PSH vouchers for the first time in Bowser’s tenure as mayor—advocates note that her own plan to end homelessness calls for the addition of 1,260 new vouchers.
Reed told lawmakers that a pause here is warranted because of the city’s well-documented problems matching vouchers to people who need them (not to mention finding homes for those people to rent once they have vouchers). She expects it will take “through FY 2024 to get through the remaining amount” of vouchers, despite loud calls from White and others to expedite the process.
“The math doesn’t add up,” del Pielago says. “I don’t see how you avoid people experiencing homelessness when there are very few resources to stop that.”
The one housing program to see a serious infusion of cash was Bowser’s effort to incentivize the conversion of downtown offices into housing via tax abatements. The effort has only just gotten off the ground, with about $2.5 million budgeted this year, but Bowser would grow that to $41 million in tax breaks by 2028. Plus, she wants to reduce the amount of affordable units that developers are required to include in these projects to win the abatements and offer a 15-year exemption from D.C.’s law allowing tenants the first rights to purchase buildings when they go up for sale. Another sweetener: an exemption from local hiring requirements for construction workers.
These are changes favored by the building industry, as well as Ward 2 Councilmember Brooke Pinto, who tells LL that “you can’t put all of our policy goals as a city into every project.” But they will face a fight from advocates like Golding, who worries that making these huge concessions to developers “sets a really bad precedent” elsewhere in the city.
“It just seems like gilding the lily for them by offering so many incentives, when we know these projects will pencil out anyway,” Golding says. “The government’s role should be to have a huge focus on affordability.”
Consider those changes an ode to John Falcicchio, who was probably the administration’s top booster of conversion tax abatements before he was exiled last week over sexual harassment allegations. He spent so much of the past few years as a prominent cheerleader for Bowser’s big ideas on housing—now, who’s left to spin these cuts in his place?