Rendering of the Hill East Phase I project. The DC Council voted in favor of permanent supportive housing for the building on the left. The building on the right is currently under construction. Image by DMPED.

The DC Council approved a $3.1 million annual rental subsidy for a new 100-unit permanent supportive housing (PSH) project, known as Hill East Phase I, on Tuesday, November 19. Put simply, PSH is subsidized affordable housing that comes with supportive services. The council’s original plans from 2017 consisted of a 91-unit building with 75 committed affordable, but not necessarily PSH, units.

The building will be located on the formerly federal Reservation 13 site at the corners of 19th Street and Independence Avenue SE near RFK stadium. It’s part of a larger mixed-income, mixed-use development wrapped around the southern Stadium-Armory Metro station entrance. The building’s mass, exterior, ground-floor retail, and open space commitments will remain the same.

Several neighbors in the surrounding community objected to the change in plans, calling them too sudden and lacking the necessary public outreach. The council first learned about the plans a few days before its initially scheduled vote on November 5. These plans were the result of several years of public process. The land disposition agreement was signed with the developer in 2015 while redevelopment plans for the greater Reservation 13 site date back to the early 2000s.

The Bowser administration pushed for the plans to be approved as emergency legislation, meaning that it can skip the council’s committee consideration and the Congressional review process. The plans also represent a broader effort by the administration to end chronic homelessness in the DC, particularly after the closing of the DC General homeless shelter last year.

What is Permanent Supportive Housing anyway?

Permanent Supportive Housing (PSH) is a model of affordable housing that combines intensive resident services, such as health care or case management, with housing. It is usually targeted at people experiencing homelessness who have a mental or physical disability that prevents them from otherwise being stably housed.

In contrast to a short-term shelter, PSH provides a permanent home with an individual bathroom and kitchen. In contrast to standard subsidized affordable housing, it provides more intensive services that are usually offered on-site with around-the-clock availability. Although academic research is limited, most existing studies point to PSH being an effective model for reducing chronic homelessness. There is also some evidence that it substantially reduces public health care costs, perhaps saving government money on net.

Because many PSH residents have a disability, they often rely on a fixed and very limited income, and so cannot pay much in rent. Therefore, PSH typically requires substantial operating subsidies, such as federal Section 8 vouchers or, in the case of the Hill East project, DC’s Local Rent Supplement Program (LRSP). The total subsidy for the Hill East project totals $3,177,600 per year, which breaks down to about $2,648 per resident per month.

The DC Housing Authority used HUD Fair Market Rents for the project’s zip code to determine the subsidy amount. Although most residents will likely have little to no income, those who do have income through either work or benefits are required contribute 30% of that income towards rents. Therefore, for residents, this subsidy amount will cover most rent and utilities.

For the developers, this subsidy will help cover property operating expenses, such as property management, cleaning, maintenance, and common area utilities, as well as monthly loan payments for debt from construction. Before they can properly design, finance, and construct a PSH building, developers need have a reliable commitment of these operating subsidies. Tuesday’s vote affirms that for the Hill East project, LRSP can be combined with capital subsidies, such as the Low-Income Housing Tax Credit (LIHTC), which the Hill East project will also use for construction.

In the hearing, At-Large Councilmember Anita Bonds affirmed that the project would have 24-7 supportive services offered by a to-be-determined service provider. The DC Department of Human Services will work in close contact with the building’s owners, screening and selecting the residents for the building, who will likely come from DC shelters in the immediate vicinity.

The council is supportive, but decries the lack of public process

Although the council unanimously supported the project, they did denounce the public process as rushed. Originally scheduled on the November 5 consent agenda, Bonds postponed the vote until this Tuesday, November 19 to give more time for public input. This two-week delay allowed DMPED, DHS, and the development team to have several additional meetings with neighborhood groups, which Ward 7 Councilmember Vincent Gray praised as productive. ANC 7F voted 4-1 in favor of the project.

Despite this, ANC 6B made additional requests to delay the vote to have time for more community meetings. In regards to outreach, Councilmember Charles Allen admitted that the mayor’s team “messed this up,” but voted in favor of the proposal in spite of this because of the importance of the project. Councilmember Elissa Silverman lamented the difficulty the council had in getting clear answers from DMPED and DCHA given the large size of the subsidy.

The council also raised questions as to the possibility of the building converting to market-rate units in the future after the expiration of the 15-year subsidy contract. However, Councilmembers Allen and Bonds affirmed that the DC government would have the option to renew the contract. If they do not, the building’s affordability restrictions would revert back to the site’s zoning order, which calls for most apartments to be restricted to rents at 30% and 60% of the area median income.