HUD Approves $78M in Bonds for Affordable Housing Improvements

The District of Columbia Housing Authority will issue the bonds as part of HUD's Capital Fund Financing Program, which facilitates the upgrading of dilapidated affordable housing sites within a within a two- or three-year period, as opposed to the 10 years that would normally be required to complete such endeavors. Of DCHA's 41 public housing properties, 38 sites accounting for 6,900 units will benefit from the funds over the next three years.

"Housing costs have escalated in the District, particularly since the late 1990s, and a number of low-income neighborhoods have experienced gentrification," DC Fiscal Policy Institute policy analyst Angie Rodgers notes in a study issued by the institute earlier this year entitled, 'Squeezed Out: The Worsening Shortage of Affordable Housing for Low-Income DC Households.' The supply of low-cost housing has diminished greatly and the gap between the supply and demand for affordable housing has widened while the number of high-cost apartments and homes has risen dramatically."

According to Delta Associates' Year End 2004 Apartment & Condo Report, the average monthly rate for a class A apartment unit in the District is $2,017, while the rate for a class B apartment unit is $1,344. "The gap between the number of renter households with income below $20,000 and the number of apartments rented that would be affordable to them--$500 per month--has grown," Rodgers adds in the study. "In 2000, the gap was 13,600. By 2003, that gap grew to 23,900."

DCHA's efforts to rehabilitate many existing public housing units through HUD's program will, at least, help prevent the stable of affordable housing units from diminishing. "DCHA is joining other forward thinking housing authorities who have recently taken advantage of this innovative financial tool to raise capital for major public housing improvements," says Michael Liu, HUD assistant secretary. "Many are beginning to see that investing in public housing makes sense for cities like Washington, DC." Other metropolitan areas that have taken advantage of the program include Chicago, New Orleans, New York and Philadelphia. Lehman Brothers served as the senior manager on the DCHA transaction.