FC2 Annual Board Meeting: Housing Affordability

How can the District build more housing that is affordable across the income spectrum? The livelihoods of low- and middle-income residents depend on it. The prosperity of the region does as well. If workers cannot live close enough to where they work, they will move away. Employers may follow them.

FC2’s Annual Board meeting on Monday focused on how policymakers and housing providers can expand the housing supply and affordability more generally. The meeting was held in Ward 8 at THEARC (Town Hall Education Arts Recreation Campus), which is a combined preforming arts and community center that also houses local social service nonprofits. THEARC is under the umbrella of Building Bridges Across the River whose CEO Rahsaan Bernard welcomed us. FC2 Trustee Chris Smith and his firm WC Smith were instrumental in financing, designing and constructing THEARC.

The first panel, moderated by D.C. Policy Center’s Executive Director Yesim Taylor, reflected the policy perspective. Panelists included Director of the DC Department of Housing and Community Development (DHCD) Polly Donaldson, DC Council Chairman Phil Mendelson and the Executive Director of ULI’s Terwilliger Center for Housing Christopher Ptomey.

Polly Donaldson and Phil Mendelson both pointed out how much the DC government is doing for housing affordability. Mayor Bowser took a giant step in the right direction by committing to build 36K new units by 2025, equally distributed across the city and of which 12K units would be affordable at 30 percent AMI. Her plan is the first in the country to set explicit housing targets by community. The updated Comprehensive Plan makes expanding the housing supply an explicit goal.

Phil told us that the total amount spent on housing affordability—from vouchers and the Housing Production Trust Fund to the Homestead Tax Credit and homelessness—comes in at an impressive $840 million annually. On a per capita basis, this is more than practically any other city in the country. Nevertheless, Polly and Phil concede, it’s not enough.

Chris Ptomey held community meetings in Ward 3 this summer with national housing affordability experts to explore how more housing could be built west of Rock Creek Park. Community engagement, he said, is indispensable for generating the public will for change. Minneapolis was able to push through dramatic up-zoning of single family home neighborhoods thanks to a thorough and honest engagement process.

The second panel, moderated by FC2 Trustee and CEO and President of Horning Brothers David Roodberg, offered the provider perspective. On the panel were the Washington Housing Conservancy’s new Executive Director Kimberly Driggins, FC2 Trustee and President and CEO of Jair Lynch Real Estate Partners Jair Lynch and Director of the 11th Street Bridge Park Scott Kratz.

The problem for developers, David Roodberg told us, is that the math behind affordable housing projects simply doesn’t pencil out unless there is a large public or philanthropic subsidy. The math will be even harder in places like Ward 3 where land costs are higher. According to his calculations, achieving Mayor Bowser’s housing targets would cost $2-3 billion.

The Washington Housing Conservancy, Kimberly Driggins said, makes the math a little bit easier by focusing on preservation of rentals (rather than new construction) and on the working class segment like nurses, teachers and government workers. It is also relying on social impact investors who understand their financial return is capped at 7 percent and a new tax exemption for qualifying properties. In addition to affordability, the Conservancy will focus on community building and place making.

Jair Lynch’s company is starting its own fund to finance and manage sub-market-rate housing. Its portfolio will likely be 80 percent preservation of existing units and 20 percent new construction. He reiterated how hard it will be to hit the Mayor’s new housing unit targets in the next five years without substantially more government support.

The Douglass Community Land Trust, which is part of the larger 11th Street Bridge project effort, uses a similar strategy. It plans to acquire land in the Southeast to make it permanently affordable to the existing community and all of its decisions are being made by members of the community.

Scott rounded out the discussion by reminding us that we should have the foresight to take action today and have the patience to wait for these tools to deliver their impact. It’s often said that the best time to plant a tree was 50 years ago and the second best is now. Every dollar invested, regulation tweak and zoning change today will accumulate into big changes decades ahead.

If you would like to learn more about the Federal City Council’s involvement with the Washington Housing Conservancy, please visit the WHC website.