Question:
Housing Production Trust Fund (HPTF) Accountability. Audits have shown that the HPTF since 2017 is not reaching its statutory requirement for investing in deeply affordable housing. In 2021 three bills were proposed and sponsored by a majority of Council Members to address this failure, but none had a hearing and the Housing Committee now proposes instead one greatly weakened substitute bill. Although HPTF has funded projects in most wards, virtually no HPTF funds have been used in Ward 3. The Mayor’s budget proposal includes $500 million for the Trust Fund. Please describe one or two concrete actions you would take to ensure that the HPTF meets its requirement to fund housing for low and extremely low income residents and for affordable housing in Ward 3
Responses:
Erin Palmer (Council Chair):
Oversight is essential to ensure housing affordability to make sure money is spent well, agencies follow laws and regulations, and we are achieving our goals. The absence of rigorous oversight has led to the Housing Production Trust Fund – one of our primary affordable housing tools – to continuously fail to meet the requirements to fund housing for those most in need.
My DC Council Accountability Plan contains a number of proposals that would improve the Council’s ability to conduct meaningful oversight, including increased use of and engagement with the recommendations of the DC Auditor’s Office. In addition, these proposals would equip the Council to conduct better oversight over multiple agencies and across Council committees - a challenge we face in a number of respects.
Improving delivery of affordable housing via the Housing Production Trust Fund also requires additional investments in the Local Rent Supplement Program, which helps cover the ongoing costs of operating and maintaining these affordable units. These programs, however, should not be treated as zero sum, and we should not take from one to support the other. We have to continue to do both, and as a resource-rich community, we should.
I also support legislation to improve accountability for the Housing Production Trust Fund, including greater reporting requirements to publish information about applications and awardees and post-completion reports. The Council should approve the Housing Production Trust Fund Transparency Amendment Act of 2021, which would require the Mayor to submit a waiver request to the Council if the District Department of Housing and Community Development has not received sufficient housing project proposals to meet the statutory requirement for deeply affordable housing.
Anita Bonds (Council At Large):
As the author of the statutory requirement for the Housing Production Trust Fund to meet the 50% expenditure requirement on the 0-30% FMI income band, I take this issue very seriously. The transparency bills that were introduced in this Council period were substantially similar to legislation that my committee held hearings on in the previous Council period; we held a further Roundtable on the IG Report last fall, and held two rounds of public hearings that were open to the public as part of our budget oversight of DHCD and the Trust Fund this year. We received extensive input on the Trust Fund from the OIG, the Auditor, other members of Council, members of the public, and agency officials, and included on a unanimous vote of the Housing Committee, a strong, responsible subtitle in this year’s BSA, that will improve trust and transparency in the HPTF funding process. I strongly support the HPTF Transparency and Accountability subtitle included in this year’s Budget Support Act, and consider it a major accomplishment, in a year with yet another record-setting investment in the Trust Fund itself.
New disclosures required under this new law will include: a written report that indicates the proposed total amount of affordable units to be produced or preserved from the selected projects; the total number of proposals received; the total number of proposals that met threshold requirements; for projects selected, the HPTF loan amount requested; the percentage contribution of the HPTF loan compared to the projects’ total sources; the total number of affordable units per project; and the number of units at or below 30% of FMI, the number of units between 31-50% of FMI, and the number of units between 51-80% of FMI. The bill requires a written rationale for the selection of each project chosen, including any score derived from the criteria in the RFP, and an explanation of any cause for a deviation in the final selections announced by the Department from the ranking based on the criteria outlined in the RFP. Finally, the bill requires the Department to provide a report of how many units of affordable housing, by levels of affordability, are completed as a result of funding that is awarded. I believe these measures add up to extraordinary, but appropriate transparency.
I’m proud of the affordable housing we have delivered using the Trust Fund, the oversight provided by the Council, and I think we can and will do better, and achieve more in the coming years. I believe the bill that we passed this year is a strong step in a positive direction toward ensuring public trust in this critical governmental fund.
Nate Fleming (Council At Large):
While working as a Legislative Director and Committee Director on the DC Council, I penned legislation to dedicate a larger percentage of funds from the Housing Production Trust fund to very low income housing. I also witnessed this legislation stall in the Housing Committee. I am running for DC Council At-Large in part because current leadership has demonstrated an unwillingness to advance the priorities of the people of the District of Columbia. As Councilmember, I will ensure that more of the Housing Production Trust Fund goes to low-income housing by working to eliminate the ability of the mayor to waive the requirement that a certain percentage goes to very low income housing. I would also support a civic education campaign in Ward 3 and throughout the District to educate Washingtonians about the importance of affordable housing and the benefits it can bring to even the wealthiest communities in DC.
Lisa Gore (Council At Large):
I will: Work to implement legislation that restricts the discretion of DHCD’s Director to deviate from projects recommended by the financial committee if they result in less affordable housing units than proposed.
I will: Work with the Council to pass the Housing Production Trust Fund Income Targeting Accountability Amendment Act of 2021 and the Housing Production Trust Fund Transparency Amendment Act of 2021, which increase transparency and reporting requirements for already-approved projects. I would argue that the Council should get in front of the issues with the HPTF and look to enact further reforms and enforcement.
Dexter Williams (Council At Large):
Separate audits by two independent city auditors - the DC Inspector General and the Office of the DC Auditor - have recently been conducted of the Department of Housing and Community Development’s HPTF. Both audits found numerous management failures that are undermining the effectiveness of DC’s most important tool for preserving and developing affordable housing. The September 2021 OIG report concluded, “Without addressing the internal control weaknesses identified, DHCD cannot ensure HPTF statutory objectives are met and yield intended benefits for the District.” It’s unconscionable. Even more unconscionable is that the problems continue to go uncorrected and the Chair of the Council’s Housing Committee has not acted in any capacity to correct the problems identified.
The Mayor’s FY ’23 budget proposal requests another $500 million for the HPTF. Are we pouring good money after bad? Should we be re-directing the money or some portion of it to more productive programs? If I am elected to the Council, I will get to the bottom of these issues. I will demand a commitment from the DHCD Director to immediately correct HPTF program weaknesses, including DHCD’s failure to meet the statutory requirement to expend half its funds annually on housing for households earning 0-30% MFI. If the problems continue uncorrected, I will work with my colleagues to redirect HPTF money to affordable housing programs that can and do pass the scrutiny of independent audits so that DC taxpayers can be assured their tax dollars are actually delivering the intended benefits.
Ben Bergmann (Ward 3 Council):
We need the Council to commit to aggressive oversight across the board, but particularly when it comes to the HPTF. I would support legislation to strengthen accountability and oversight by the Auditor and Council. I would also support legislation aimed at making the production of more deeply affordable units a top priority, measured by clear performance benchmarks.
Deirdre Brown (Ward 3 Council):
The HPTF needs increased transparency and accountability. We need to look at and implement the auditor's recommendations. We need to have regularly scheduled hearings that outline which developer is getting the funds and how the funds are being used. We need to set benchmarks so that developers are held accountable for not reaching affordability goals. HPTF can be implemented to the benefit of the residents but that will only happen when we demand it.
Tricia Duncan (Ward 3 Council):
The HPTF failing to reach its statutory investment requirement, coupled with the fact that so little of the funds have been spent in Ward 3, is infuriating. Three bills sponsored by the majority of the Council failing to receive a hearing is similarly frustrating. To ensure that the HPTF meets its goals and funds deeply affordable housing in Ward 3, we need a Councilmember who will strongly advocate for the projects. I will be unafraid to stand up to neighbors and community stakeholders and justify my strongly held belief that Ward 3 needs a massive expansion of affordable housing. Put simply, leadership is needed, and I won't shy away from that task. Additionally, rigorous oversight from the DC Council is needed to ensure that the HPTF meets its goals. The Council is a co-equal branch and it should act like it. That means demanding that the HPTF meets the statutory requirements and getting to the bottom of it if they are not doing so. Accepting the status quo of failure is not an option.
Beau Finley (Ward 3 Council):
I have already proposed that the HPTF be used to purchase units and then make them available as deeply affordable housing units, potentially via a system of master leases managed by non-profits or the District.
In addition, the HPTF should be used for creating limited-equity co-ops and building properties managed by community land trusts.
Limited-equity co-ops and community land trusts are great vehicles for low-income households to both build wealth and have an affordable place to live. Both make a lot of sense where land acquisition costs are low. Council has the authority to designate District-owned land disposition which can allow the use of public lands for limited-equity co-ops and community land trusts.
As councilmember, I would work with my colleagues on Council to request from the Mayor a comprehensive and descriptive map of District-owned land with associated land values. We would also ask for an overlay of any planned or hoped-for purchases or land swaps that would add land to the District’s properties. From this basis, I would work with affordable housing advocates to determine which sites are viable and how best to finance such projects. I would then work with DHCD and DCFHA on funding issues and explore whether the HPTF could be used to help.
In addition to comprehensively examining the District for suitable locations for limited-equity co-ops and community land trusts, I would also explore whether the HPTF could be used to help fund compensation of traditional co-op unit sellers to create limited-equity co-op units.
Matt Frumin (Ward 3 Council):
I would be a part of aggressive oversight of DHCD which requires careful oversight on these issues. I would work with stakeholders on the ground to look for sites that could be Housing Production Trust Fund sites in the Ward for housing at all income levels and support them in their effort to make such projects a reality. Indeed, while the question is accurate in citing the paucity of HPTF projects in the Ward, the one that is on track is the one I have led in trying to make a reality -- the Lisner Home. I have a track record of getting this and other things done and will do so on the Council.
Monte Monash (Ward 3 Council):
Ward 3 neighbors are ready for transformational change. I will support intentional development that has mixed income units with offerings of deeply affordable units for families, teachers and first responders. I am also a fan of limited co-op buildings to offer home ownership possibilities for families with a 50-80% profile of rent to income. We must use the tools available, stay open to innovate new program and be determined to make good on our commitments to offer deeply affordable housing throughout the District. The locations should be of mixed incomes, building amenities that are also inclusive and intentional designs to promote a safe and healthy community. We can do this. Let's get started!