Elimination of the Workforce Housing Fund Will Hurt Middle-Income Families Trying to Keep Up with Influx of Highly-Paid Workers

(Washington, DC) – As part of her budget, Mayor Bowser proposed an innovative Workforce Housing Fund to support the production of new homes that would be affordable to working families, teachers, social workers, first responders, etc. (households earning between 60% and 120% of the Area Median Income or approximately $50,000 to $99,000 for a single-person household and $70,000 to $141,000 for a family of four). On May 14, 2019, the Council eliminated the $20 million dedicated fund and proposed replacing it with a $2.8 million tax abatement for private developers. While Mayor Bowser’s proposal can lock developers into 40-year affordability covenants, the Council’s proposal allows developers to set the policy on affordability.

In response to the cuts, Mayor Bowser released the following statement:

“As we continue to make big investments in programs to support our most vulnerable residents, we must also think seriously about how we insulate middle-income workers, seniors, and families who make a decent salary but are already struggling to make ends meet. With more highly-paid workers coming into the region, an effective housing strategy must consider families across the income spectrum and it cannot be short-sighted – our plan for working families must consider long-time affordability.”

A tax abatement is no substitute for a dedicated fund for Workforce Housing. Without a dedicated fund to assist in the acquisition, construction, and rehab of workforce housing, a tax abatement is ineffective. Housing developments need upfront investments that a tax abatement alone simply does not provide.

Overall, the Council Chairman cut the Mayor’s housing affordability investments by $45 million:

• Decreased the Housing Production Trust Fund ($10 Million), affecting 100 families who would have benefitted from housing that is kept affordable for 40 years.
• Eliminated entirely the Workforce Housing Fund ($20 million), preventing the District from increasing access to housing for teachers, first responders, social workers, hospitality workers, and others who serve the District.
• Eliminated entirely the Housing Preservation Fund ($15 million), putting at risk thousands of residents who are likely to get displaced and lose their affordable housing in DC.

The Council should restore this funding in its final vote on May 28.