The D.C. Council is mulling several bills to increase affordable housing, as rising rents and home prices push longtime residents out of the city.
One bill would offer tax credits to businesses or people who invest in financial institutions that put money into development projects in underserved communities. Another would convert underused office buildings into affordable homes.
“Solving the affordable housing crisis is not something that will occur overnight and is not something that can be accomplished by any one entity or organization,” said council member David Grosso, who proposed the tax credit bill. “However, through this legislation, we will add another financing tool to the arsenal and partner with the private market to expand the amount of debt capital available for affordable housing projects.”
The Community Impact Investment Tax Credit Act would establish a program for taxpayers who invest via community development financial institutions (CDFI) — essentially, banks that provide loans to low-income homebuyers and socially responsible developers.
Individuals, corporations and foundations will be eligible to claim up to 33 percent of their investments as a credit against their D.C. income taxes, unincorporated business franchise taxes or corporation franchise taxes. The exemption caps at $1 million.
Mr. Grosso, at-large independent, said the bill would give people who may not otherwise directly invest in housing a chance to play a part in making the city more affordable.
He cited as an example Enterprise Community Partners, which has raised $11 million over the year to finance the preservation and production of local affordable homes.
The Office to Affordable Housing Task Force Establishment Act would convert old office buildings into homes for low-income residents.
“The District has tons of older office buildings that are sitting mostly vacant because businesses are moving to our newer developments, like City Center and the Wharf, while at the same time we have a severe shortage of affordable housing,” said council member Robert White, the at-large Democrat who offered the legislation.
The bill would convene an 11-member task force to figure out how to create private-public partnerships with the owners of old, underused office buildings. The task force of affordable housing advocates, building owners and low-income renters would have four months to issue a report.
Mr. White said “building owners who are struggling to find commercial tenants would jump at the opportunity to work with the government to put their buildings to productive use.”
The District’s 11 percent commercial vacancy rate is a “drag on our local economy,” he said, adding that office-to-apartment retrofits are happening across the country.
Both lawmakers cited statistics on the scarcity of affordable housing in the District and nationwide. They said more needs to be done, even though Mayor Muriel Bowser has made good on her promise to invest $100 million in the city’s Housing Production Trust Fund each year.
The National Low Income Housing Coalition said in a May 2016 report that a full-time worker in America must earn at least $20.30 per hour to afford a modest two-bedroom apartment at fair market rent.
Though the District’s minimum wage, which is set to hit $15 per hour in 2020, is among the highest in the country, its rental and housing prices also are some of the nation’s highest. According to the report, a D.C. worker must earn more than $30 an hour to afford a market-rate, two-bedroom apartment and be able to pay for other necessities.
The real estate website Apartment List, which tracks market rates, shows that two-bedroom rental units in the District average about $3,000 a month. A one-bedroom apartment costs about $2,200 a month.
By comparison, the suburb of Silver Spring has average rents of $1,500 and $1,700 for one- and two-bedroom apartments, respectively.
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