Mayor Bowser Proposes Boost To Housing Fund Despite Budget Concerns

After diverting money last year from a fund that typically produces affordable housing to instead stabilize struggling properties, D.C.'s mayor is now looking to return to funding new developments. 

Mayor Muriel Bowser is proposing $100M in her fiscal year 2026 budget for the Affordable Housing Production Trust Fund, she announced Wednesday. That represents an increase from the $80M that went to the fund in the current fiscal year, which ends Sept. 30. 

The mayor has yet to release her full budget proposal, which is expected to include reductions in some areas due to the local impacts of the federal workforce cuts, but Bowser said that isn't stopping her from increasing affordable housing funding. 

"The proposal we will send to the council will rightsize some spending based on where we are in the economy, but it will also make some big, bold aggressive investments in our growth," she said Wednesday at the ribbon cutting of a senior affordable housing project at 307 Riggs Road NE.

"It will continue to help us create affordable homes," she added. 

The mayor's budget release is coming later than its typical early April timeframe, a delay she attributes to the $1B shortfall Congress created for this year's budget that has yet to be resolved. Council members have criticized the delay and called on Bowser to release a full budget proposal by May 15.

If approved, the funding won't necessarily go toward the production of new housing. The $80M allocated to HPTF this year was diverted to stabilize existing affordable properties that faced distress due to high levels of unpaid rent. 

Deputy Mayor Nina Albert said that in order to use all of the HPTF money for new production, the city will need to see policies change that ensure the stabilization of the existing housing stock — specifically, she said the council must pass the RENTAL Act that Bowser proposed in February.

The wide-ranging RENTAL Act aims to accelerate the eviction process in order to bring down rent delinquencies. It would also reform the Tenant Opportunity to Purchase Act — a longstanding law that real estate developers say makes investors shy away from the city — that would exempt all market-rate buildings from going through TOPA.

"Without making the fixes we've proposed, new construction will continue to slow, and housing prices will increase as a result," Albert said at Wednesday's event. 

The city has seen a dramatic reduction in housing starts over the last year. D.C. had 932 total rental units start construction in 2024, a 79% drop from the prior year and the only year in the last decade that starts were under 4,000, according to the Washington D.C. Economic Partnership. 

The slowdown was caused in part by macroeconomic pressures like high interest rates and construction cost inflation, but D.C.’s drop in construction starts has been far sharper than the national average of 25%.

Local developers and officials said this is in part because investors have pulled back from the city due to its tenant-friendly policies and the high levels of unpaid rent in its apartments. 

The average unit in D.C. has unpaid rent of $2,207, more than twice the national average, according to a D.C. Council committee report last month. This has led some properties to go into foreclosure, with landlords warning that more will come. A foreclosure could strip affordable housing properties of their income restriction covenants.  

The Department of Housing and Community Development, which administers the HPTF, distributed $144M in bridge funding to stabilize 69 properties totaling nearly 8,000 units that had received District subsidies but were deemed at financial risk.

That funding includes all $80M that was allocated to HPTF for this fiscal year plus money that hadn’t been spent from prior years. 

"When we saw the need in the market, we looked to get out in front of this year, so we hope this stopgap measure will be really fruitful in terms of preserving homes for people," DHCD Director Colleen Green said at an event in February. 

The HPTF has received over $1B in city funding since Bowser took office in 2015 — typically at least $100M per year — and it has been a primary tool that affordable housing developers use to finance projects in D.C.

The program has funded more than 8,000 units across more than 100 buildings, according to a D.C. Policy Center report last month. That includes $25M toward the 93-unit Riggs Crossing Senior Residences from True Ground Housing Partners and EYA, where the ribbon cutting was held.