Chairperson Schwartz and members of the Committee, thank you for the opportunity to speak today. My name is Angie Rodgers, and I am a policy analyst with the DC Fiscal Policy Institute. DCFPI engages in research and public education on the fiscal and economic health of the District of Columbia, with a particular emphasis on policies that affect low- and moderate-income residents.
DCFPI supports an affordability requirement when developing housing on public land. The District should be as aggressive as possible in crafting a policy to guide these dispositions. As we have attested before this Council in the past, the District loses thousands of units of affordable housing every year. These numbers point to the need for immediate implementation of aggressive policies to stem this tide of loss.
Bill 17-112 is a step in the right direction. I believe that the bill can be strengthened, however, to become a more powerful tool for the development of affordable housing by increasing the set aside from the 20 percent in the current bill to 30 percent. This is consistent with the other current requirement for housing developed on public land ‘ the Anacostia Waterfront requirement. The Mayor has also recently expressed the 30 percent set aside as a desired policy for his administration.
The bill can also be strengthened by ensuring that the lowest possible levels of affordability be achieved by first using the value of the public land being disposed.
Further, because we would be giving up the value of our public land in this scenario, the bill should maximize use of this public subsidy by requiring 15 percent of the rental units be made affordable to households with income under 60 percent of the area median and 15 percent be made affordable to households with income under 30 percent of the area median. The current bill would benefit households with income up to 80 percent of the area median in rental units. I believe, along with our coalition partners from the Affordable Housing Alliance, that an eligibility threshold as low as 60 percent of the area median is achievable in rental housing, particularly if developers are allowed to use the value of the land.
We recommend a different threshold be set for home ownership because of the difficulty achieving affordable ownership under 50 percent of the area median. We recommend that 15 percent of owner-occupied units go to households with income below 60 percent of the area median and 15 percent go to households below 80 percent of the area median. Certainly organizations like DC Habitat for Humanity, however, can and are doing home ownership for households below even 30 percent of the area median. I would recommend preferencing such organizations in the disposition process to make sure those projects get done.
The legislation should require the development of a fair and competitive process for disposing of the land and should specifically require that such a process include a preferencing structure for developers offering the lowest levels of affordability.
Finally, I want to encourage permanent affordability on the units developed under this requirement. Once again, we are giving up the value of our public land. If we lose those units down the line we either lose that housing as affordable or face having to contribute additional subsidy if we wish to make the housing affordable to the next low-income household.
Permanent affordability has become almost par for the course in our conversations about rental housing. Home ownership remains an issue, however, because in order to make homes affordable to the next low-income owner without additional subsidy, the owner looking to sell would need to share some of their equity gain.
The Coalition for Nonprofit Housing and Economic Development recently hosted a community forum on this issue and one thing was clear ‘ almost no one in the room argued in favor of extreme cases where the owner gets all of the equity or the owner gets no equity at all when they sell. There is a huge gray area in between the two extremes, though, and there should be a bigger conversation about that gray area. I think everyone wants low-income households who receive public subsidy to be able to use their homes in the same way that unsubsidized owners use their homes. I want to make the point today, though, that you can have both permanent affordability and equity gain for homeowners wishing to sell. DCFPI has looked at this issue and a paper we published last year demonstrates the potential gains. It is attached to this testimony. Other organizations like Manna have looked at other models, which I’m sure they will share. I think we will reach a compromise on the details of equity sharing, but I recommend that we not allow the fact that we have not reached an agreement about those details deter us from ensuring permanent affordability on our public land in this legislation.
Thank you for the opportunity to speak and I am happy to answer any questions you may have.