D.C.'s 'Green New Deal for Housing' Is Doomed Before It Begins

Social housing supporters hope that the city can get city-owned, city-operated housing right with a new office, a more expansive mission, and different branding.

Just a couple months after federal investigators found shambolic management and appalling conditions at thousands of public housing units in Washington, D.C, district politicians and activists want to expand the city's housing portfolio with an ambitious "Green New Deal for Housing."

The hope is that with a new office, a more expansive mission, and different branding, the city can build and operate new "social housing" that accomplishes a wide range of social goals while avoiding the pitfalls of the public housing units it currently owns.

"The Green New Deal for housing is about confronting our housing crisis, our climate crisis, our displacement crisis with a comprehensive approach that puts both our people and our planet first," said Councilmember Janeese Lewis George, the bill's author, at a public hearing of the district council's Committee on Housing and Executive Administration last week.

Lewis George's bill would create a new Office of Social Housing Development within the city government that would purchase existing housing units or build new ones. The city would then operate these properties as mixed-income social housing where two-thirds of the units would be rented out at affordable rates to very low- and extremely low-income district residents.

These properties would theoretically be "self-funded" by the market-rate rents paid on the remaining third of residential units and ground-floor retail space. Leftover rent would be used to build more social housing. The Office of Social Housing Development would also have the authority to issue bonds not backed by the city to finance new housing.

New social housing developments would be built to the highest labor and environmental standards—meaning they'd come with net-zero emissions, include solar panels where possible, and pay prevailing (union) wages.

The proposal is sponsored by seven of D.C.'s 13 councilmembers. Councilmember-elect Zachary Parker also testified in favor of it, reports The Washington Post.

Supporters say that the Green New Deal for Housing's many grand designs are all possible if we just cut profit-maximizing landlords and developers out of the mix.

"Housing is too important to leave solely to the private market," said Lewis George at last week's hearing.

At the moment, D.C. doesn't leave housing solely to the private market. The most direct way it intervenes is through the Housing Authority's (DCHA) operation of 8,084 city-owned public housing units for low-income residents.

If the city's management of these units is any guide, social housing created by Lewis George's Green New Deal will fall well short of its lofty goals.

An October investigation of DCHA public housing conducted by the U.S. Department of Housing and Urban Development (HUD) found a quarter of public housing units were vacant—either because poor maintenance has made them uninhabitable or because DCHA failed to match them with a tenant despite having a waiting list of approximately 40,000 people. Though we can only estimate the size of D.C.'s public housing waiting list, as the HUD investigation found that DCHA hadn't updated its list in a decade.

The HUD investigation turned up a total of 82 deficiencies, including a lack of property management expertise among upper management and the DCHA board, operating costs that were far higher than other public housing agencies, and basic failures to keep track of rent payments and occupied units.

In response to the report, one D.C. councilmember described DCHA as "completely dysfunctional." A DCHA board member recommended a federal takeover of the authority.

Per the Washington Post's reporting, supporters of the social housing bill argue that better management and the inclusion of market-rate apartments and retail space provide the revenues necessary to prevent buildings from falling into decay.

But several witnesses at the 11-hour public hearing on Lewis George's social housing bill questioned how realistic that was.

Projects with such a high percentage of low-income units "do not pay for themselves under any circumstances," said Patrick McAnaney, from for-profit affordable housing developer Somerset Development Company, at the hearing.

McAnaney also noted that D.C.'s various housing agencies already do most of the things the proposed Office of Social Housing would do, including manage units, issue bonds, buy land, and more. "The real concern with this approach is will it be duplicative rather than additive," he said.

Other critical witnesses asked whether this new Office of Social Housing would be prioritized enough within the city bureaucracy to avoid the pitfalls of the DCHA's public housing units.

Further, the breadth of the bill didn't provide needed specifics for accomplishing its many goals, said some witnesses.

"This bill is trying to solve for a bunch of different things, including housing affordability, job access, sustainability, dissatisfaction with land acquisition, developer profits, capitalism are all in there," said Alex Baca of the nonprofit Greater Greater Washington.

These goals are often in tension with each other. The social housing developments envisioned in Lewis George's bill are supposed to be affordable and self-funding. But they're also supposed to be built next to amenities like Metro stops where land prices are higher. The higher labor and environmental standards raise costs more.

Meeting all those requirements means social housing dollars will build far few units than if some of those standards were relaxed. That will reduce its impact on affordability. Getting as many renters into social housing as possible, in contrast, would require some compromises on transit access or environmental design standards.

High design requirements and building in amenity-rich, transit-rich areas already contribute to sky-high affordable housing development costs elsewhere in the country.

Almost everyone testifying at last week's hearing supported the concept of a district-owned and operated social housing, even if they demanded serious revisions to the bill as written.

I've argued before that even where social housing works well, it's unnecessary.

Vienna, Austria has set the gold standard for social housing among advocates. There, a majority of city residents live in city-owned or semi-privatized mixed-income social housing developments that are reportedly both affordable and high-quality.

But even in "Red Vienna," private developers still build and own a lot of these social housing developments (with heavy government input and subsidies). That's in contrast to the D.C. Green New Deal for Housing proposal that would be solely a government-funded and operated affair.

Vienna as a whole also sees a lot more purely private per-capita development than any major American city, which keeps prices down for everyone.

One 2016 Harvard study found that Austrian tenants in market-rate housing were paying only a bit more, as a percentage of their income, for housing than tenants in below-market-rate units. The same study found that Austrian market-rate renters had lower median incomes than below-market-rate (i.e., social housing) renters. Austrian renters in all types of housing spent less of their income on housing than American renters.

All that suggests that private developers will build a lot of housing at affordable rates for even modest-income people when given the opportunity. The overall expansion of supply lowers costs for even low-income renters.

Obviously in D.C., they're not given that opportunity. The city's zoning restrictions make much of the district off-limits to development that would add serious amounts of new housing. That keeps prices higher than where they would be in a free market.

A number of supporters of Lewis George's social housing bill noted that making it a reality would require zoning reforms that would allow for dense, new housing construction without huge amounts of mandated parking.

If those zoning reforms were realized, maybe we wouldn't need social housing at all.

Lewis George's proposal has been introduced at the tail end of the current council, so it's not likely to move forward. It will likely be reintroduced next year.