Developers, Investors See DC As Rich Lode For Affordable Housing
Affordable housing projects are expensive to build and expensive to maintain. Just ask Polly Donaldson, director of the DC Department of Housing and Community Development, who’s been at her post for some 15 months now. Polly will be a speaker at our fifth annual Affordable Housing Forum Thursday, March 24, at the Atlas Performing Arts Center starting at 7:30am.
Thanks to a commitment made last year by DC Mayor Muriel Bowser in the FY 2016 budget, the Housing Protection Trust Fund, which Polly oversees, received $100M for new affordable housing zoning this year.
In January, the mayor announced the allocation of $82M to 12 successful RFPs received last year to preserve or create 804 units of affordable housing. (They’re now in the underwriting phase, finalizing the loan details, construction plans, zoning, etc.) Construction is expected to begin by the end of this year.
Polly says a second RFP will be issued in the spring that is going to be using Housing Production Trust Fund dollars as well as federal resources and other funds.
To that end, the Trust Fund and the deputy mayor’s office on Friday will hold a “March Madness” day to announce several new procurement and other opportunities to build more affordable housing in the District.
Not every resource that is part of an RFP is from the HPTF alone, Polly says. “It’s a subtle difference, but very real, because a lot of people think of that $100M in the HPTF as the only source of funding,” she explains. “We have other public financing tools through the federal government that help leverage private financing.”
Among Polly's other mandates—and they are numerous—is overseeing a 2014 DC law that initially was not popular with some developers. Under the law, all new multifamily developments built on DC land with 10 or more units and within a half mile of a Metro station must set aside 30% of the units for affordable housing.
They include some of the larger DC-owned properties including St. Elizabeths, Walter Reed and the McMillan Sand Filtration Plant development, as well as other parcels administered by the Deputy Mayor for Planning and Economic Development.
Polly, snapped next to Stratford Capital Group president Stephen Wilson at last year's affordable housing forum, says the development community recognizes the convergence of public policy and resources related to affordable housing “was inevitable.” DC is fortunate to have tools that many other cities don’t have, she says, to increase the amount of affordable housing through a variety of avenues.
Polly cites as an example the disposition of the 965 Florida Ave NW property, which resulted in more than the 30% minimum requirement for affordable housing.
There is an understanding, she says, that such a requirement is part of what DC is now: a growing city looking to maximize housing across all income levels.
“I think developers accept that and want to be a part of that,” she adds.
When Bisnow cited a projected need for between 20,000 and 30,000 new affordable units by 2020, Polly pointed to the upcoming release of the new DC budget proposal.
“I think Mayor Bowser—although I can’t speak officially because the budget is going to be introduced later this week—has publicly stated that her intention is for the Trust Fund to have $100M of both the dedicated revenue stream and general fund dollars each year.”
The $100M will be leveraged to raise additional private funding, she adds.
“There is a desire to invest in DC," she says. "We have the tools in place. We have the right environment. We have the financial stability and we have the bond ratings and such that it becomes a good investment,” Polly says.