FOR IMMEDIATE RELEASE
March 22, 2017
Cheryl Cort, Policy Director
Tomorrow’s affordable housing crisis can be avoided with a permanent affordability commitment today
Washington, DC — Today the Coalition for Smarter Growth released a report [PDF] demonstrating how the District of Columbia could stretch its investments in affordable housing and avoid future crises in expiring use restrictions by establishing an in perpetuity affordability commitment in exchange for public dollars.
“The city of Boston has been doing this successfully for decades. It requires that any city investment in affordable rental housing comes with a commitment to make that affordability permanent. DC has similar opportunities since it too is a high cost, strong market city,” said Cheryl Cort, Policy Director at the Coalition for Smarter Growth, and author of the report.
The report recommends that the District applies a permanent affordability requirement in exchange for public subsidies provided for affordable housing developments. The report shows how a permanent affordability requirement is a practical tool that DC could use to get ahead of tomorrow’s crisis of expiring use restrictions on affordable housing. For many years, another high-cost city, Boston, has successfully implemented a policy that requires that city funds used to create or rehabilitate affordable rental homes come with the commitment of in-perpetuity affordability.
“We commend DC Department of Housing and Community Development’s big step in this direction with the draft plan for funding allocation. Just as Boston did, DC is now incentivizing applicants to commit to an in perpetuity use restriction for their housing developments. Like Boston, we expect that DC will be able to attract proposals that take advantage of the incentive and make the permanent commitment to affordability,” Cort said.
The report addresses the main concerns that are often raised about very long term and permanent affordability – acceptance by investors, and uncertainty about attracting recapitalization funds at the end of the useful life of buildings and their systems. Boston has experienced no problems attracting investors. The city also ensures that an aging building receives the recapitalization it needs. Experts cite the similarity between Boston’s strong housing market and DC’s as the basis for attracting investors in affordable housing deals that require permanent affordability.
“This is a tool for high-cost areas,” said Leslie Steen, Senior Advisor, Wesley Housing Development Corporation, a local affordable housing developer. Steen continued, “Permanent affordability is a critical tool we need in DC to be able to keep our affordable housing stock serving low-income residents for the long term. Without it, we’ll lose more and more subsidized housing to high-priced market rates as the restrictions expire.”
Permanent affordability also helps more low-income residents become homeowners. Permanent affordability has emerged as a solution to preserve affordable for-sale homes and expand the opportunity for more lower income residents to buy. One of the key challenges in affordable homeownership program is balancing wealth creation for the homeowner while preserving affordability.
“Programs have managed to find a way to balance the legitimate desire of allowing people to get some equity while also allowing for preservation of affordability,” said Brett Theodos, Urban Institute.
Jim Steck, City First Homes, a DC-based permanently affordable homeownership organization said, “Over the course of the last several decades, the District has changed dramatically. Tools previously needed to combat disinvestment and the city’s need for growth and economic development need to be updated to respond to this reality. Permanent affordability is an important tool that can help encourage equitable development and mitigate the potential displacement of long-term residents as a result of the city’s uneven economic expansion.”
The report identified the need for the District to establish a clear shared equity policy for publicly-subsidized homeownership that balances the desire to provide the assisted homeowner with wealth-building opportunity while preserving the subsidy in the unit for the next assisted homebuyer.
“DC has the opportunity to build on solid experience from Boston, and community land trusts around the country and right here in DC. Our high-cost market demands better solutions for preserving our investments in affordable homes for low-income DC families. Bringing a permanent affordability policy to all our public investments is a practical and foresighted approach,” Cort said.
The proposed incentives for the Qualified Allocation Plan by DHCD for in perpetuity affordability terms follows the recent action by the DC Council to require in perpetuity affordability for all affordable housing built as a part of public land dispositions, and the DC Zoning Commission’s earlier ruling that requires all affordable inclusionary zoning units be affordable for the life of building.
About the Coalition for Smarter Growth
The Coalition for Smarter Growth is the leading organization in the Washington DC region dedicated to making the case for smart growth. Its mission is to promote walkable, inclusive, and transit-oriented communities, and the land use and transportation policies and investments needed to make those communities flourish. Learn more at smartergrowth.net.