Urban renewal on DC’s Southwest waterfront. Photo by Mr. T in DC on Flickr.
Smart Growth advocates want to make it possible for people of all income levels to benefit fully from living in an urban area. It’s helpful to know what we mean when it comes to affordable housing and how America got to where we are today.
On a day when we pause to remember a man who dedicated his life to both racial and economic justice, it is appropriate that we understand the background of today’s approaches to lifting up the least fortunate.
Two urban planners last week gave an overview of the history of affordable housing policy in the United States at a monthly meeting of Jews United for Justice’s Fair Purple Line Campaign.
The campaign supports the Purple Line’s construction as light rail, but is working to prevent low-income residents and small businesses in Langley Park from being displaced. There’s a significant risk of this, since the area is expected to add many transit-oriented developments once the line opens.
The center of Langley Park is at New Hampshire Avenue and University Boulevard. It straddles the border between Montgomery and Prince George’s Counties, and is known for being a very diverse, but lower-income community.
The planners, one of whom is an asset manager at a Bethesda-based nonprofit housing developer, explained that the need for public housing assistance arises from the fact that so many workers aren’t paid enough to be able to afford market-rate housing. This is especially severe in high-cost areas like metropolitan Washington.
An often-overlooked remedy to the underlying problem is to increase the minimum wage across the board so that working people can live off of their income without needing other assistance. But this has not been the chosen approach, for the most part, in the United States.
A historical perspective
The first federal housing programs grew out of the Great Depression and the need to house the thousands that the economic crash left on the street. In later years, these programs focused on replacing “slums”—many of which were thriving, though poor, neighborhoods.
The resulting development often took the form of high-density apartment buildings in non-urban configurations. Construction of much of the Southwest Waterfront neighborhood is the result of this urban renewal planning.
Public housing was not intended to house families indefinitely, but rather to support them to get back on their feet. The programs that eventually came to be overseen by the U.S. Department of Housing and Urban Development (HUD) were intended not only to house people, but to sustain the economy by encouraging bank lending and to support the housing industry.
In the 1970s, HUD moved from being a financier for the development of traditional public housing projects to using Section 8 of the Housing and Community Development Act of 1974 to create an alternative approach. This new approach took the form of vouchers for private housing.
Section 8 payments are made to landlords on behalf of individuals in need of housing who meet legal residency and income requirements. They may only act as a subsidy to keep prices or rents low, or they may cover most or all of the cost of rent or a mortgage. Generally, income tests mean that households must make no more than a certain percentage of the average median income for their metropolitan area.
Disappointingly, the process for qualifying for a Section 8 voucher has become long and tedious. Over 20,000 District residents currently sit on the waiting list, representing a casework backup of two years or more.
Only 7,000 people nationwide receive vouchers each year. As this 12-minute documentary from the Maine Affordable Housing Coalition illustrates, wait-listed people without stable homes face much greater challenges finding work, healthcare, childcare and other necessities, while many who have gotten vouchers have become productive members of their communities.
Governments also offer tax credits to nonprofit developers of affordable housing. This amounts to a dollar-for-dollar reduction in the developer’s tax bill, up to an annual limit of 90% of development costs for ten years.
Nonprofits—which don’t pay corporate income taxes anyway—sell these credits to banks, which then give 70 cents for each dollar of tax credit the bank can apply to its own tax bill back to the nonprofit. This helps banks comply with the Community Reinvestment Act of 1977.
More recently, state and local governments (with some HUD assistance) have worked to include minimum affordable housing set-asides in new mixed developments. Hope VI, established in the early 1990s, aimed to replace the most derelict traditional public housing with mixed-use communities. But of the nearly 70,000 public housing residents displaced under Hope VI, only 24% were able to return into the units that replaced their original homes.
Another tool local governments use is inclusionary zoning (IZ): a zoning requirement that a certain percentage of units in developments of certain sizes must be reserved for those of lesser means. In Montgomery County, this means Moderately Priced Dwelling Units (MPDUs). Montgomery had one of the country’s first inclusionary zoning ordinances. It was adopted in 1974.
Developers are generally offered enhanced incentives in exchange for their acceptance of IZ. Montgomery County has set a standard for IZ policies [PDF page 19]. A new Montgomery County policy mandates that greater percentages of units within one of the county’s nine Metro Station Policy Areas be made affordable than in other parts of the county.
The District enacted an inclusionary zoning policy about two years ago. Unfortunately, however, Prince George’s County lacks many of the policy tools that could help the residents of Langley Park stay put.
The sustained level of citizen involvement in the effort to preserve Langley Park’s cultural identity while supporting transit improvement and smarter development is encouraging. It should serve as a model for other cases where low-income communities can be disadvantaged by the types of changes that will inevitably increase in our region.
If you support the Fair Purple Line Campaign’s goals and want to see it succeed, please learn more about the Campaign.