It has been a busy year for Affordable Housing Advocates. Under the leadership of the Coalition for Nonprofit Housing and Economic Development, advocates are seeing their hard work and persistence pay off.
Tenant Purchase — Partial Transfer Loophole Closed
On May 3, the City Council passed a bill that gives tenants the right to
purchase their building when less than 100 percent of a building is sold within a 12 month period. This puts a stop to owners bypassing tenants’ rights by transferring a
portion (usually 95 percent) of the property in one year and then conveying the remaining portion the following year. This is a hard fought victory for tenants and tenants’ rights activists.
Property Tax Relief for Resale Restricted Properties, and Nonprofit Housing Developers
Currently, re-sale restricted homes (includes limited equity coops and
homes produced by financing from the Housing Production Trust Fund) are assessed at market rate, causing property taxes to be disproportionately high. These properties
then become unaffordable to the populations they are intended to house (low and moderate income households). In addition, nonprofit housing developers who own property are taxed at a higher rate due to the property’s classification.
The City Council recently voted to resolve these problems by including provisions in the Budget Support Act that gives the DC Office of Tax and Revenue a new way to assess these types of properties.
As a result, assessments of resale – restricted homes will be based on the actual amount paid for the property- not on market comparables which are much higher. The provisions also extends (from one to three years) the period of time a nonprofit housing developer may own property without paying property taxes on it and ensures that all housing owned by nonprofit housing developers are assessed as Class I
Property- not vacant or abandoned – property which is five times higher
than the standard rate.
While passed, these bills await funding from the Chief Financial Officer.
Housing Production Trust Fund & Securitization
The City Council approved the FY 2006 Budget Support Act which approved funding of $53.7 million for the Housing Production Trust Fund. The act also included a provision that limits securitization to $6 million annually, to be used only for Sursum Corda (Northwest One).
The mayor had initially proposed diverting $15 million annually from the Fund for the next 25 years to fund a portion of the “New Communities” initiative. Affordable Housing advocates opposed securitization because there was no plan clearly
outlining uses for the money and protections for residents.
Affordable Housing Acquisition Fund (AHAF)
The AHAF will provide expedited, low interest loans to nonprofit developers to acquire property for development as affordable housing. The city recently selected four lenders to administer and match the City’s contribution of $15 Million:
– Unitarian Universalist Affordable Housing Corporation, working with United Bank: $5 million
– The Enterprise Foundation: $5 million
– CityFirst Bank: $5 million
– Washington Area Housing Trust Fund: $1 million.