Less Housing Won’t Make Housing More Affordable

So there’s a Southwest Waterfront project in DC that “will replace acres of parking lots and low wharf buildings with a lively, walkable district.” What’s more, there’s currently a law requiring “that the redeveloped public lands provide 30% affordable housing for families at very low incomes, protect water quality to a high standard, and include strong local hiring and workforce development.” Now, though, the developer wants to change things up and Cheryl Cort is displeased:

But at the request of the developer, the Council’s bill would cap the amount of affordable housing built in the project. The developer wants to switch some commercial development for residential and not have to meet the affordability standards for the added housing units.

Without an independent financial analysis of the developer’s reasons for asking for the rollback, the public has no way of knowing if this is necessary or a good deal. And if the Council passes this, it sets a precedent that any community benefit required by law can be renegotiated at any stage of the agreement.

In general I’m an “affordable housing” law skeptic, but note the particular oddness of the case. The developer isn’t proposing to provider fewer affordable housing units than he originally agreed to provide. He’s proposing to swap commercial space for market-rate housing, and hold affordable housing constant.


I think this case highlights the generally problematic nature of trying to subsidize low-income people’s consumption via affordability regulations for new housing. This is basically a case where the question to ask is “what if we just gave poor people more money?” Washington DC has both a progressive income tax, a regressive 10% retail sales tax, and property taxes. If vacant lots are transformed into market-rate buildings, the city’s per capita tax revenue will rise. That would allow the city to reduce sales tax rates, thus putting more money into the hands of poor people. What’s more, the increased population of non-poor people in the city will increase the job opportunities available to the poor.