Surveying The New Communities Initiative

Luxury Amenities for Affordable Housing

The New Communities Initiative aims to replace some of the most distressed DC neighborhoods and replace them with mixed-income communities, with equal ratios of market-rate, subsidized (available to residents making 30-80% median income), and deeply subsidized units (available to residents making less than 30% of median income. As proposed, it offers one-for-one replacement of deeply subsidized units and a right to return for all families living in the units to be replaced.

However, the downturn of the housing market has foiled the initial blueprint of this project. The return from market rate units was supposed to help finance some of the affordable units, but dwindling housing prices have aggravated the intended initial unit-income ratios and budget. As of four months ago, the number of market-rate units in Northwest One, one of four NCI developments, has more than doubled, leaving only 13% and 22% slotted for subsidized and deeply subsidized units respectively. There is even some recent indication that the number of deeply subsidized units will be slashed to only 12%. In addition, the cost of the project has increased by 21% since it was proposed three years ago.

This brings to light a considerable problem. While it shows that the District is committed to the project, their commitment to affordable housing remains in question. If they’re backtracking from their initial commitment of equal unit-income ratios, what else can we expect to be cut? How can they honestly expect to guarantee one-for-one replacement of affordable units when only 25%-35% of the new units will be subsidized?

The Washington Business Journal cites the East Lake project in Atlanta as a model for DC’s New Communities. It replaced a public housing site with a mixed-income community, which lured market-rate unit tenants with a nearby golf club. With the dramatically increased number of market-rate units in Northwest One, what kind of bait will the District have to provide to market-rate tenants in this soft housing market to entice them to live in NCI developments? Furthermore, is the ever-insufficient public funding too valuable to be spent on these luxury temptations? Although Mayor Fenty seems convinced that the environment NCI promotes is the necessary evolution of proper affordable housing, he’s going to have to convince the public if significant funding is used lure to market-rate renters. If NCI developments are built and priced according to the original plans, the argument in its favor is much more sustainable; on the other hand, if it requires financing a golf course, it’s going to lose a lot of public support.