NEWS: HOW SHOULD D.C. DEVELOP PUBLIC LAND?

Uncreative Commons

Candidates like Robert White want to change how D.C. develops public land. Could it make a difference to the housing crisis?

By Alex Koma @AlexKomaWCP

D.C. could soon replace the distinctly retro Reeves Center in the U Street corridor with hundreds of gleaming apartments, new office space, maybe even a hotel and a public plaza—but is that really enough?

The city is weighing two pitches from developers vying to remake the old government building, and no matter which one wins, hundreds of affordable apartments and other community amenities will bring new life to the publicly owned site. But some politicians still see that outcome as a failure, and a powerful example of the District’s bigger problems in combating its housing crisis.

Why shouldn’t the city demand more from developers if they’re going to get the chance to build on such a prime piece of land, they wonder? Sure, D.C. will get some new affordable housing out of the project, but what if the city asked for much more? What if there were new homeownership opportunities, community land trusts, or even social housing built into these public land deals?

“If you look at any of the development projects on public lands, there is no difference between what they’re doing today and what we were doing 15 years ago,” says At-Large Councilmember Robert White, who is challenging Mayor Muriel Bowser in June’s Democratic primary. “It is clear the administration just will not think outside the box.”

White is probably the most prominent candidate raising these points, but he’s certainly not alone. Many Council contenders have mounted similar arguments about D.C.’s development strategies as they try to formulate some sort of policy response to rising rent prices, and the issue has become a popular talking point particularly among more progressive candidates (though even more moderate voices have joined this chorus).

“We’re giving the keys away to developers, selling land for a dollar and not getting deeply affordable housing,” says Zachary Parker, who represents Ward 5 on the State Board of Education and has claimed the left lane in the open Council race there. “Our current approach is not sustainable.”

These ideas are promising, and have pitfalls. Developers warn that too many requirements on these projects could break the fragile economics of an affordable housing deal, and believe that Bowser’s team is already doing as much as it possibly can to spur more affordable construction. And even the most enthusiastic policy wonks caution that, while the District may own plenty of prime properties, the housing crisis is so daunting that changing requirements on public land alone won’t solve it.

But if the city isn’t getting the most affordable housing it can with its own land, or using these properties for innovative experiments, then where can the government make a difference?

“We know you can’t just snap your fingers and get 100 percent affordable housing in a project,” says Eliana Golding, an analyst at the D.C. Fiscal Policy Institute. “But we can do a better job of asking developers to get on our page versus getting on theirs.”

developers say they aren’t opposed to including affordable units in these projects, per se, and it’s far from a totally alien requirement; the District requires that 30 percent of all units built via the sale of public land be affordable. In other cases, the city ground leases properties to developers (maintaining ownership of the underlying land) and doesn’t include such requirements. But officials often press for bidders to include affordability as part of their proposals to win a lease arrangement. At the Reeves Center, for instance, both potential winners want to build more than 200 affordable units there—no small thing considering the site currently has no housing on it.

The city can certainly ask for more affordable apartments on these properties (or require that the units be affordable to people at lower income levels) but builders doubt they could actually deliver on those requests. Doug Firstenberg, principal at the influential development firm Stonebridge, says the government needs to add subsidies like housing vouchers or low-interest loans if it wants to see affordability on these projects.

“Free land isn’t going to be enough to cover the gap and get you to a break-even point,” Firstenberg says. “You’re not going to get a lender, you’re not going to get the equity at a certain point.”

A valuable piece of land is a powerful bit of negotiating leverage for the District in these transactions (and it removes a huge cost for developers). But the industry is often wary of the extra costs associated with a lengthy public process, which can be far more drawn out than a private project.

“There’s no such thing as a free lunch,” says Eric Jones, a top lobbyist for the Apartment and Office Building Association of Metropolitan Washington. “The government is going to give you free land because it knows there are going to be other costs.”

Golding is sympathetic to these arguments, to a point. Developers have to turn a profit on these deals, or else they would have no reason to pursue them. But she believes that the city shouldn’t stop trying to push the envelope on affordability just because it gets pushback.

“They’re in private industry, so they want to cut costs as much as they can,” Golding says. “Any government has a responsibility to interrogate that.”

bowser officials believe they have struck a balance between these two sides. The mayor has prioritized affordable housing in city-owned land deals and even begun experimenting with making community land trusts part of these deals. At an old school property near Truxton Circle, for instance, the Douglass Community Land Trust will get the chance to build new townhomes and sell them off at affordable rates, while another developer manages the rental portion of the project. Buyers will own the houses, but the trust will maintain control of the land, a model designed to prevent real estate prices from rising over time.

“The one innovation we can do is a bigger focus on homeownership,” says John Falcicchio, Bowser’s chief of staff and deputy mayor for planning and economic development. “That’s something we’re putting more into our solicitations.”

But White believes the administration simply hasn’t moved fast enough to embrace different development models. He thinks that failure stems, in part, from Bowser’s deference to a certain class of developers that have found good business in bidding frequently on city projects while donating freely to the mayor and her allies. At Reeves alone, both teams are stocked with Bowser’s close confidants.

“It has absolutely been business as usual with respect to development, and the same people getting the contracts,” White says. “That is not the way to have a robust, competitive market here in the District … There’s just no exploration whatsoever of better opportunities or new opportunities, like social housing.”

Alex Baca, the D.C. policy director for the nonprofit Greater Greater Washington (and a former City Paper staffer), shares some of White’s frustration, noting the persistent problems with the city’s minority contracting system. But she also wonders whether politicians are ready to embrace solutions big enough for the scale of the problem.

She’s sensitive to developers’ concerns about economics, so why not just make dense projects on public land “by right,” avoiding the city’s lengthy zoning review process as a cost-cutting measure? Or maybe the city could essentially set up a “parallel housing authority” by buying up more properties using its seldom-exercised right of first refusal to buy many buildings for sale? Then the District could manage those buildings on its own and hold down rents.

But good luck convincing neighbors they can’t complain to their ANC about a new building, or that they should live in public housing given the state of such units in D.C.

“It’s all possible, but I’m just not sure the will is there to make it happen,” Baca says.

Reeves Center at 14th and U streets NW