The Hon. Robert White
Chairman, Housing Committee
District of Columbia Council
1350 Pennsylvania Ave. NW
Washington, DC 20004
Re: DC Housing Finance Agency Oversight Hearing:
Dear Chair White:
Please accept these comments on behalf of the Coalition for Smarter Growth, the leading non-profit organization in the D.C. region advocating 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 appreciation for the ongoing work of the Mayor, Council, agencies to leverage District and outside resources to preserve and build more quality affordable housing to ensure that all DC residents can live in a safe, comfortable home. The Housing Production Trust Fund (HPTF) has accomplished tremendous things — delivering 11,758 affordable homes since 2015. This major accomplishment is not possible without the support of the federal 4% Low Income Housing Tax Credits (LIHTC) and related private-activity bonds.
Urgent: Address bond cap which halts new rental affordable housing projects, indefinitely
We should all be alarmed that little to no new rental housing projects are being financed as of August 2023 – for an indefinite period. In August, DHCD (not HFA) announced that the District hit the federal ceiling on private-activity bond issuance, known as the “bond cap” which effectively limits the allocation of 4% Low Income Tax Credits (LIHTC). This shocking announcement brought numerous shovel-ready affordable housing projects to a sudden, abrupt halt. Now dozens of affordable housing projects – that we and thousands of DC residents and tenant associations fought for – are being sold off, defaulting, or stranded in an untenable limbo. All this costs huge sums of wasted money; it erodes our affordable housing supply, drives displacement, and shrinks the capacity to build and preserve affordable homes. It means tenants will not be able to use their TOPA rights to preserve their homes and improve and expand affordable housing options.
The DC Council, the public, and affordable housing providers have received no status update on future bond cap projections and how this affects the known pipeline demand of affordable housing projects for this financing capacity. No information or updates from DCHFA have been provided to inform the DC Council or the affordable housing sector on what happens next. Members of CNHED have done internal projections showing that no new 4% LIHTC projects will be able to move forward for at least the next two years, but it could be longer.
The DC Council must play a strong oversight role given the total lack of transparency and disastrous silence of DCHFA. We urge the Council to act to put in place the following recommendations.
Recommendations
DCHFA should track and project the availability of the District’s private activity bonds and should communicate about the bond cap issue with realistic timelines for future years. This would include:
- Updates, projections, timelines, possibly by adding to or replicating the DHCD public dashboard,
- Provide quarterly updates to the Housing Committee and public, and
- Share and track the number of deals using HUD debt or other structures where the bond cap can be recycled.
In the interim, we urgently need bridging strategies until the bond cap issue is eased. We ask the Council to work with and gain the cooperation of DCHFA, along with practitioners to determine the best way to support pipeline projects through alternative resource allocation and help to close deals so these projects can move forward to deliver affordable housing to District residents.
Thank you for the opportunity to testify.
Sincerely,
Cheryl Cort
Policy Director