October 23, 2026

The Honorable Robert White, Chair, Committee on Housing, Council of the District of Columbia John A. Wilson Building, 1350 Pennsylvania Avenue, NW, Washington, DC 20004, Email: housing@dccouncil.us

RE: Oppose IZ provisions in B26-0819 – Ownership and Wealth-building for our Neighbors (OWN) Omnibus Amendment Act of 2026 — regarding Inclusionary Zoning for-sale homes

Dear Chair White:

Please accept these comments on behalf of the Coalition for Smarter Growth. CSG advocates for walkable, bikeable, inclusive, transit-oriented communities as the most sustainable and equitable way for the DC region to grow and provide opportunities for all. 

We wish to express our opposition to the provision in B26-819, to provide a payment of the market rate appreciation to deed-restricted Inclusionary Zoning for-sale homes. This section of the bill amends Sec. 3. Section 103 of the Inclusionary Zoning Implementation Amendment Act of 2006, 75 effective March 14, 2007 (D.C. Law 16-275; D.C. Official Code § 6-1041.03).

We regret to offer this testimony in opposition to this section of the bill, but we do not believe that this proposal — however well intentioned — is the best way to support affordable homeownership for DC residents. The implications for this payment of market appreciation for the non-covenanted price, presumably by the District government, has many downsides to our efforts to broaden affordable homeownership for DC residents, and more generally, keep DC residents stably housed. 

This payment approach will divert limited housing funding. The change would undercut the premise of deed-restricted homes, where a family is able to purchase an IZ home at a below-market price, who would otherwise remain renters. The proposed approach would also be difficult to design and manage.

DC’s budget and affordable housing crisis calls for different priorities. The potentially high, though unpredictable cost of committing the District to paying a market appreciation price for an IZ unit is an inefficient use of extremely limited resources to support affordable homeownership and address DC’s affordable housing crisis in general. This proposal could divert limited funds from future homeownership assistance programs, and from the many desperately needed interventions to keep struggling residents in their homes and preserve ailing affordable housing buildings that are on the brink of foreclosure. Loss of these buildings would mean displacement of current residents, the loss of the covenants, and all the spent DC subsidy that created those affordable buildings. Topping off market appreciation for an IZ unit beyond the shared equity resale formula is not the best use of DC’s stressed budget. 

District payments of market appreciation for shared equity affordable homes carry other risks. This change carries with it other risks to the District and DHCD. Owners of rental properties developed in compliance with IZ could ask why they are not compensated for their reduced rental income from IZ units. Limited equity cooperatives have similar approaches to limited shared equity for the owner/seller while retaining the affordable unit price for the next buyer. Owners in these kinds of shared equity cooperatives might also ask why they too aren’t being subsidized to be paid the market price. One expert has raised the potential of spurring of speculation from unscrupulous lenders. This major shift opens up many questions as to how this program would work.

While some have raised concerns about the resale formula for the IZ program’s shared equity approach, this proposal does not address this. We can recommend some experts who could provide insight based on national level experience and data, as well as local knowledge, if it would be useful to assess the share equity resale formula used by the DC IZ program. 

To our knowledge, no other IZ program has such a policy in place in the country. We think that’s due to the many concerns we and others have raised. 

Thank you for the opportunity to testify.

Sincerely,

Cheryl Cort, DC and Prince George’s Policy Director