Last week, we learned about some very serious problems with how DC runs its Housing Production Trust Fund (HPTF), a financial tool used to create and preserve affordable homes across the District. That's bad news no matter how you slice it. The good news, though, is that these issues might not be as pervasive as they first seem, and that the problems that do exist are fixable.
From landlords overcharging tenants for subsidized apartments because of lax government oversight to developers not building the affordable units they promised, it’s infuriating to see money wasted when it was meant to support struggling residents and families.
But there’s no reason to give up on the HPTF. As DHCD, the agency in charge of administering the HPTF, pointed out in its response to the audit, “since its implementation 15 years ago, 12,000 affordable housing units have been produced or preserved—and 30,000 residents have a safe and affordable place to call home.”
Not only that, DHCD has been actively working to address a number of the issues revealed in the audit since January 2015. It’s critical to note that because the 14 properties investigated in the audit are all from before that year.
The Housing Production Trust Fund is DC’s main affordable housing tool, so it’s disconcerting that a recent DC Auditor report revealed that improvements are needed in how Trust Fund projects are overseen. As DC steps up its investment in the Trust Fund, it’s important to get this housing tool right. The good news is that problems identified in the audit are fixable. The Bowser Administration should move quickly to address these problems, which may predate the mayor’s term, but are now her responsibility.
The audit found several lapses in the Department of Housing and Community Development’s (DHCD) oversight in a sample of 14 affordable housing projects that received loans from the Housing Production Trust Fund. Among the findings:
Projects didn’t share a consistent method of certifying that residents had qualifying incomes, and they sometimes charged rents above the maximum allowed. Some property managers weren’t clear on what the rules were, and some seemed to have disregarded them. DHCD didn’t catch these instances of non-compliance.
DHCD didn’t keep its own records on Trust Fund project payments and outstanding balances. Instead, it counted on a contractor who wasn’t always reliable. As a result, DHCD didn’t fully collect funds from several projects that were behind on their loans.
With so many DC residents struggling to pay to keep a roof overhead, every dollar dedicated to affordable housing counts. It’s troubling that projects that received public dollars were able to slip through the cracks and not provide affordable housing in accordance with the rules.
There problems are very serious, yet there’s reason to believe they may not be widespread: the audit notes that the 14 projects sampled are “higher risk” because they did not also receive federal funds or housing tax credits, as many Trust Fund projects do. Federal funding and tax credits come with clear and well-established monitoring procedures. That, of course, does not lessen the urgency to address the issues at projects that receive only Trust Fund assistance.
DHCD should implement the audit’s recommendations, including providing clear instructions about certifying incomes and setting rents, and holding projects accountable through more rigorous monitoring and enforcement. DHCD has indicated it’ll start to use the procedures that are applied to federally funded projects as a template to revamp its oversight of Trust Fund projects. That’s a great start.
In addition to implementing the auditor’s recommendations, DCFPI also encourages DHCD to dedicate more staff to tracking and monitoring Trust Fund investments. The audit repeatedly cites inadequate staffing levels as a factor in why projects slipped through the cracks. Mayor Bowser should include any needed additional funding in her fiscal year 2018 budget.
We should absolutely make sure our agencies are good stewards of the money dedicated to supporting affordable homes. We should also continue to support the effective use of the Housing Production Trust Fund.