jonetta rose barras: Is DC serious about producing and preserving enough affordable housing?

Ask that question of most DC tenants and the answer is sure to be a resounding no — although last week Mayor Muriel Bowser kicked off her annual feast for developers to entice more affordable housing projects. Using federal and local tax dollars, and with the approval of the DC Council, her administration could spend as much as $400 million from the city’s Housing Production Trust Fund (HPTF) to construct and preserve affordable housing. 

Despite that historic investment, few believe the money ultimately will help those who are at the extremely low-income level. “It’s a game; it’s almost a scam,” said Robert Leardo, co-chair of TENAC, a citywide tenant advocacy organization that has been at the forefront of affordable housing issues in DC for more than two decades. 

“Their modus operandi is that they say they are going to do affordable housing and then they fill [those units] with wealthy people,” added Leardo. He and many others recognize that not only is most affordable housing seldom made available for people with extremely low incomes; units originally designated as affordable housing end up in the hands of more affluent residents sooner or later. 

The lack of affordable housing, combined with other economic problems, frequently results in residents becoming homeless — or being pushed out of the city. Nevertheless, the District’s principal focus has been on construction — rather than preservation — even though Richard Livingstone, a spokesperson for the Department of Housing and Community Development (DHCD), told me via email there is plenty of money available for the latter. 

An aggressive and significant effort to preserve existing low-cost housing could serve as the buffer against uncontrolled gentrification and the displacement it instigates.

Speaking last week, Bowser reiterated her goal of building 36,000 new housing units — 12,000 of which would be affordable. The deadline the mayor set is 2025. Her administration isn’t even close to achieving those numbers, however. Since January 2019, when the mayor laid out her goal at the start of her second term, the city has completed only 3,758 affordable units. 

What’s more, Bowser is still looking to secure 1,900 units in neighborhoods west of Rock Creek Park. She and her deputy mayor for planning and economic development, John Falcicchio, dismissed a proposal submitted by residents that involved buying the former Wardman Hotel that could have helped the administration meet its mark. 

Truth be told, affordability is relative. For years, DC’s affordable housing efforts have seemed to cater to those between 50% and 80% of area median income (AMI), which for the Washington metropolitan region is $117,200 for a family of four. Advocates have pushed for more attention to those at or below the 30% level. After all, that is what the law requires. 

Who follows the law in DC these days? 

Polly Donaldson, the former director of DHCD, which has oversight of the HPTF, acknowledged that the agency hasn’t served enough extremely low-income residents. She made that confession during last week’s kickoff and in response to a recent audit by DC Inspector General Daniel Lucas’ office.

“As I have acknowledged to the DC Council and the general public, we know we need to do more to coordinate HPTF investment at extremely low levels, i.e., 30% median family income or AMI,” she said at last Thursday’s event

Donaldson argued, however, that the “HPTF doesn’t operate in a silo.” Serving low-income residents requires “ongoing financial support,” she added. 

So, let me get that straight: Providing low-interest loans to developers isn’t enough. Donaldson thinks they need and/or deserve deeper subsidies. That would be supplemented by low-income residents bringing government-funded housing vouchers, providing even larger sums of money for landlords and owners.

Isn’t it enough that DHCD failed to conduct compliance reviews? As a result, there were cases where the agency did not identify when HPTF-funded projects failed to “produce or preserve affordable units as required under various loan agreements,” the IG noted in his audit, which confirmed concerns expressed by Leardo and other advocates.

Who, exactly, is the city’s affordable housing program designed to benefit?

The IG found that Donaldson misdirected nearly $82 million in HPTF investments that by law should have gone to producing units for people with extremely low incomes; the money went instead to projects with units intended for residents earning up to 80% of the AMI. The DHCD, under Donaldson, also disbursed $14.2 million to projects beyond their proposed budgets; meanwhile, there’s $10 million in past-due loans that remains unpaid without the agency having begun collection activity. 

Those findings echo similar fiscal and programmatic mismanagement reported by DC Auditor Kathy Patterson in 2019, 2018, 2017 and 2016 — yes, in four separate audits. 

Nothing much has changed. Don’t think low-income residents are the only people suffering. All DC taxpayers carry the burden of government incompetence.

“The result is missed opportunities for the development of much needed housing, such as at the Wardman Hotel,” said Reginald Black, a leader of the Wardman Hotel Strategy Team, in a prepared statement released by his group after public disclosure of the IG’s report.

“If you add up all the millions that they have misdirected, mismanaged or just plain lost, they have wasted most of the cost of buying the Wardman, where we could have provided hundreds of mixed income affordable units, including family-size units.

“They told us it was too expensive to buy the Wardman, but what is really expensive is the wasted money and opportunities at DHCD,” Black added. “And now, they have been entrusted with even more of our money. Where is the true accountability?”

The one bright light: Donaldson retired from the government on Sept. 30. I want to sing hallelujah — except I am less than sanguine about the future. There’s a cheerleader in the oversight room. 

At-large Council member Anita Bonds, chair of the Committee on Housing and Executive Administration, celebrated the mayor last week, failing to chastise the administration’s abysmal low-income affordable housing production results. She also failed to raise questions about what is being done to preserve existing units.

I sent an email requesting an interview. She did not reply.

The most immediate mechanism at the government’s disposal is the Tenant Opportunity to Purchase Act (TOPA). By law, apartment owners who intend to sell their property must give tenants the first right of refusal at a fair-market sale price. Those interested in availing themselves of TOPA must have a legally recognized tenant association and take specific actions within a prescribed timeframe.

Livingstone said that in fiscal year 2022, DHCD “has $10 million in [the HPTF] set aside for TOPA acquisition, and TOPA projects may compete in the Consolidated Request for Proposals process announced last week.” 

Additionally, the Housing Preservation Fund “is funded in Mayor Bowser’s FY22 budget at $17 million that when leveraged 3:1 will make $68 million available,” Livingstone added, without addressing questions about the agency’s fiscal mismanagement problem identified by the IG.

Many tenants don’t know about that pool of preservation money, despite the fact that DHCD contracts with eight nonprofit organizations to assist renters through the process. Livingstone said those groups will receive $1 million in FY 2022. 

There are dozens of horror stories — and lawsuits — that testify to the flaws in the current system. “Those third-party nonprofits sometimes act for the benefit of landlords,” said Leardo.

My upper 16th Street NW apartment building went through a four-year ordeal, despite such assistance. The nonprofit staffer advising our tenant association never once mentioned the availability of housing preservation funds. They also weren’t very helpful when the association became entangled in litigation instigated by two different developers that were fighting the building’s owner. The case was handled by a DC Superior Court judge who knew next to nothing about TOPA.

In the end, the developer to whom we wanted to assign our TOPA rights, working in partnership to produce a high-quality renovation, exhausted his resources and had to settle the lawsuit. Without any significant assistance from either DHCD or the Office of the Attorney General, our tenant association was also forced to surrender or lose our TOPA rights all together. We are now dealing with a company we had initially rejected. We remain unhappy about the arrangement.

Johanna Shreve, director of the Office of the Tenant Advocate, said she also isn’t completely satisfied with DHCD contractors who are supposed to provide technical services. Her office has become more involved in recent years. “These tenants are not getting the advice and guidance they need. Someone needs to teach them what their rights are.

“The council gave me additional money [in the 2022 budget] for staff,” continued Shreve, adding that currently there are about 100 TOPA deals on the table.

During the pandemic, the council paused TOPA agreements that were not completed. That freeze was lifted last month. “Interest rates are low. As we get closer to January, you’re going to see even more TOPAs,” said Shreve.

There’s good reason the DHCD should be following TOPA quite closely given this volume and the potential for an extreme adverse impact on existing affordable housing if these deals fall apart — or aren’t framed right. However, during this spring’s performance hearing before the council, Donaldson revealed that her agency doesn’t follow up on TOPA agreements, before or after they take effect. She said the agency doesn’t have the time for that and isn’t mandated by law to implement such a process.

In an email to me, Livingstone said the community groups with which the agency contracts “provide post acquisition and rehabilitation board training and property management support to newly formed cooperative or condominium boards.”

There wasn’t any mention of rental property. That could mean the agency won’t change its practice despite the swell of TOPA transactions predicted by Shreve. 

At that oversight hearing, Bonds didn’t even question the hands-off policy articulated by Donaldson. I am not surprised. Last week she effusively praised the outgoing DHCD director while announcing that she would like to see a sizable portion of the HPTF’s $400 million used for homeownership.

“When people feel they can own a piece of the pie, things change and change for the better,” she said.

Wait, wait, wasn’t Bonds behind the council’s repeal of TOPA rights from residents who were renting single-family homes? Prior to that action, when owners put those houses on the market, families could negotiate a purchase price. Now, they can only pack up their things and move out.

Maybe TENAC’s Leardo is right. DC officials’ advocacy for affordable housing is a game where tenants, particularly low-income tenants, lose almost every time.

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jonetta rose barras is an author and freelance journalist, covering national and local issues including politics, childhood trauma, public education, economic development and urban public policies. She can be reached at thebarrasreport@gmail.com.