The Housing Production Trust Fund (HPTF), the District’s highest profile and costliest initiative to increase affordable housing, requires “significant improvements in its management,” according to an audit conducted by the Office of the D.C. Auditor (ODCA).
“Our audit, based on a small but diverse sample of projects, demonstrates a lack of oversight on loan repayments, retaining affordable units, and compliance with program requirements,” said D.C. Auditor Kathy Patterson. “With improved monitoring, we believe that HPTF can more effectively achieve its mission of providing D.C. residents with the affordable housing they so desperately need.”
D.C. Residents, Mayor Bowser, and various organizations participate in a rally for Affordable Housing at Foundry United Methodist Church on March 18. (Photo by Mark Mahoney)
Following a random sampling of the HPTF program, researchers found it did not comply with the city’s annual spending requirements for housing projects that target extremely and very low-income households, it did not submit annual household income certifications, and neglected to record and maintain all loan agreement data. ODCA noted a lack of oversight related to repayment of loans from developers, including nine loans within the sampling that were more than $1 million, as of September 2016.
“Given that the sample is less than 10 percent of the approximately 158 multi-family projects that DHCD reported, the amount due for the entire HPTF portfolio is likely much greater and represents funds that could be used for additional projects and provide housing for more individuals and families,” Patterson told the Washington Post.
HPTF was authorized in 1988 to develop affordable housing in the District and allocated approximately $692 million from FY2001 through FY2016 for at least 218 multi-family and single family projects. And while the city housing department touts 9,588 units of affordable housing have been created in 158 multifamily projects with help from the trust fund, the audit casts doubt on the data due to “unreliable” records.
Nearly 40 percent of households in the nation’s capital spend more than one-third of their incomes on housing – with more than 47,000 families on the D.C. Housing Authority’s waiting list for public housing, and more than 7,500 people homeless. The audit was requested by Council Finance and Revenue Chair Jack Evans (D-Ward 2).
The report recommends that DHCD should: develop a compliance plan to ensure that future obligations do not deviate from the required 40 percent for both extremely and very low-income households; create a standard income certification form and include it in all loan agreements and send it annually to all HPTF borrowers; monitor sites’ compliance with requirements including tenants’ income certifications and annual re-certifications; and require properties to submit annual certifications of affordable units.
Polly Donaldson, director of the D.C. Department of Housing and Community Development (DHCD) said in a statement March 16 that DHCD has successfully implemented more than 12,000 affordable housing units for 15 years since the agency’s inception.
“DHCD is making progress in monitoring and regulating the HPTF because of the directive that the Mayor gave me as DHCD Director to do more with more, which includes improving the administration of this vital affordable housing tool,” Donaldson said. “Looking ahead, DHCD looks forward to collaboratively working with ODCA to resolve the audit findings identified by the review.”