On December 4, the DC Council moved to divert an estimated $20 million in new tax funds it had pledged for homeless programs to instead reduce the property tax rate for commercial entities valued at $10 million or more. That money could have funded permanent supportive housing for about 730 people, or have provided long-term housing vouchers to about 1,000 very low-income families, says Jesse Rabinowitz, Advocacy and Campaign Manager at Miriam's Kitchen, a DC nonprofit working to end homelessness.
There aren’t enough homes in the District for all the people who want to live here, and most existing homes are not affordable for low-income people. Zillow estimates that the median home value in the District in November of this year was $575,800. The average rents for one- and two-bedroom apartments are $1,996 and $2,532, respectively, which is way out of reach for those making the city’s median household income—$77,649.
The city’s contribution to low-income housing production, though important, is insufficient to solve the problem, let alone put a serious dent in it. That's why housing advocates are so frustrated with this move.
DC had decided to use half of online purchase revenue to fund housing
In 2013 there was chatter that the government would finally allow states to tax purchases made online. In preparation for that possibility, the District included a section in the Fiscal Year 2014 Budget Support Act of 2013 detailing what it would do with the new tax receipts if online taxation were permitted.
The bill stipulated that 50% of the revenue—at the time an estimated at $20 million—would be used to tackle homelessness in the city. In June of this year, the Supreme Court ruled that states (and the District of Columbia) can collect sales tax on on purchases made by their residents.
A month later, two councilmembers, Jack Evans and Phil Mendelson, quietly introduced a bill (The Internet Sales Tax Amendment Act) to amend how the city will spend its tax receipts for internet sales. Instead of subsidizing developers to build low-income housing or providing more rent vouchers for low-income residents, the bill amends the original 2013 act so the money is now used for a tax break for owners of commercial properties valued at $10 million or more.
Ostensibly, the move was to appease commercial interests who were unhappy with an earlier tax hike on commercial properties. Councilmembers David Grosso, Brianne Nadeau, Elissa Silverman, and Trayon White voted against the bill.
Lots of people in our region desperately need homes
In 2013 when the 2014 budget act was initiated, there were approximately 800 residents in the city’s family homeless shelter (the former DC General), more than half of whom were children. The plight of the city’s homeless families, and the shelter’s inability to meet their needs, would come to painful light in early 2014 when Relisha Rudd, a 9-year-old who lived in the shelter with her mother, went missing.
When the mayor first promised to close DC General, she said that she would replace it with several smaller shelters located across the city’s eight wards. Flash forward five years. On November 1, the Mayor formally shuttered DC General, but only two of those replacement shelters have been built.
While homelessness among families has dropped nearly 40% since its height in 2016, it remains a persistent problem in DC. This January, the city estimated that there were 924 families experiencing homelessness in the District, compared to 1,491 families counted in 2016. However, DC actually saw its percentage of homeless families increase 142.7% over the past decade. While the numbers may be down from 2016, they are not where they were before the 2008 recession.
The city likes to say the declining numbers are due in large part to its efforts to better serve homeless families. This is undoubtedly true, but there’s still much work to be done. To provide a path to stability, DC's homeless families also need affordable housing, not just shelters.
As Ed Lazere and Scott Schenkelberg argue in the Washington Post, budget choices are also moral ones. If DC is serious about being truly inclusive, it needs to build space for people of all incomes.