Conflict over funding for public housing repairs steers DC budget toward an impasse

The D.C. budget is poised for a standstill after CFO Jeffrey S. DeWitt refused to approve it until a provision to transfer $49 million of reserve funds from Events D.C. is removed. The budget had called for half of the funds taken from the reserves going for public housing repairs, seen by many as long-overdue and a key step toward accomplishing the Homeward D.C. initiative. 

According to the D.C. Housing Authority, 2,610 units are in need of repairs that must be made by the end of the year and 4,445 units are in “critical condition.” The agency places the total cost of repairs over the next 17 years at $2.2 billion.   

[Read More: On May 28, the FY2020 budget bill was passed, and Chairman Mendelson said the Chief Financial Officer was in support of his motion to repurpose money from Events D.C. reserve funds.]

D.C. Council Chairman Phil Mendelson insists that diverting a portion of the $180 million unused reserve fund would not hamper bond payments. DeWitt, however, argued that the city made a pledge to direct all excess revenue toward repaying bondholders and that pledge must be upheld. 

“Our word is our credit,” DeWitt wrote last month in a letter to the Council. “If we break our promises to investors, we not only lose our credit but also our credibility and reputation.” 

Councilmembers Brianne Nadeau and Elissa Silverman identified another source of funding, though its impact would be limited in scope. They say that the D.C. Line Hotel, located in Ward 1, has not met the requirements to receive a $46 million tax abatement and they proposed  that funds initially targeted to that tax abatement should instead be made available to the Council on an incremental basis for public housing repairs in Ward 1. 

Councilmember Nadeau released the following statement: “… the terms of [the Line Hotel’s] $46 million abatement were clear about how many Ward 1 residents needed to fill construction jobs. Unfortunately, they didn’t meet this requirement. This amendment is an attempt to make right the loss of opportunity for Ward 1 residents and the loss of construction jobs that were not created for them. … The Housing Authority has classified several properties in Ward 1 as being in ‘extremely urgent’ condition and in need of repair, including Garfield Terrace, Kelly Miller/LeDroit and Harvard Towers. This funding will directly help Ward 1 residents living in public housing.” 

However, the councilmembers’ proposal is not a comprehensive substitute for Chairman Mendelson’s budget plan, and he is refusing to back down. If the budget remains at an impasse, the deadlock could cause a D.C. government shutdown.