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Priced out of DC on a firefighter's salary? Mayor aims for $20M for 'workforce housing'

Fund not likely to target specific professions – teachers, police, nurses – unlike similar programs.
Credit: Jordan Fischer, WUSA9

WASHINGTON — The Department of Housing and Community Development offered a few new details Wednesday about a proposed $20 million Workforce Housing Fund meant to increase affordable housing at moderate income levels.

The new fund is part of a $103 million proposal to fund new housing investments from Mayor Muriel Bowser. To find that $103 million, Bowser has proposed making permanent the $1.89 commercial property tax, and increasing the deed and recordation tax on commercial properties over $2 million from 1.45% to 2.5%.

In a roundtable discussion with reporters, DHCD Director Polly Donaldson said the increased tax revenue would primarily be directed into three buckets: $37 million for the mayor’s Eliminating Homelessness program; $30 million for the Housing Production Trust Fund (HPTP) and $5 million for the Housing Preservation Fund; and $20 million for a new Workforce Housing Fund.

Donaldson said the Workforce Housing Fund would be used to increase housing affordable to individuals and families that fall within 60-120% of median family income – which, for D.C., would be approximately $70,000 to $140,000 for a family of four.

Like the Housing Production Trust Fund and Housing Preservation Fund, the Workforce Housing Fund is expected to be used as a leveraged fund – meaning the District will essentially use it to "seed" development. Private dollars would then fund the remainder of the development, as they have with Preservation Fund projects.

RELATED: Salvadoran families use Preservation Fund to save affordable housing

Donaldson said the exact form of the fund was still being discussed – and still pending council approval – but said the city was looking at a number of models around the country. She did say she believed the District wanted its program to reach a “broad spectrum” of occupations, rather than focusing on targeted occupations like Fairfax County’s Magnet Housing Program, which provides two-year rental leases at affordable prices for teachers, bus drivers, nurses and other health professionals, and fire, police and sheriff’s officers who work in the county.

Currently, the District offers 0% interest loans and matching fund grants through the Employer-Assisted Housing Program (EAHP) for eligible city government employees looking to buy a home, but much of the money allocated for affordable housing preservation and production has been targeted for families with incomes at 50% or less of the area median. DHCD says 90% of recent Housing Production Trust Fund monies have gone to households making no more than $59,000.

Bowser’s budget also asks for an additional $5 million for the Housing Preservation Fund, which was created two years ago to help tenants exercise their rights under the Tenant Opportunity to Purchase Act (TOPA). The fund announced its first three projects in December to preserve more than 70 units of affordable housing. On Thursday, Donaldson said the fund has since grown to 432 units preserved in Wards 1, 4, 7 and 8, with another 508 units waiting to be closed on in Wards 4 and 8.

The mayor’s proposals – which Donaldson called an “unprecedented” investment in housing – hinge on the D.C. Council approving her Fiscal Year 2020 budget, which has come under fire by her own auditor, who called it “not sustainable.”

Last week, D.C. Auditor Kathy Patterson said the Fiscal Year 2020 budget asks for an 8.2% increase in spending, while D.C. is only expected to see revenue growth of around 3%.

"Raising taxes to have a balanced budget this year means that spending is part of the base," Patterson said. "We have to raise taxes again to keep that level going. It's something that can't be sustained over time."

READ MORE: D.C. Auditor: Mayor Bowser’s budget proposal ‘not sustainable’

Mayor Bowser’s administration has pushed back on Patterson’s criticisms, saying city leaders will adjust future budgets accordingly based on what each year brings in.

"The District of Columbia's economy is still very healthy and even though our revenues might be slowing down, our need to improve schools isn't. Our need to create more affordable housing isn't," said Jenny Reed, the mayor’s director of budget and performance management.

MORE BUDGET COVERAGE

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