Amid funding dispute, D.C. Council votes to bankroll public housing repairs in 2020 budget

As part of the $15.5 billion District budget they passed unanimously Tuesday, D.C. legislators approved more than $25 million in funds for desperately needed public housing repairs. The money is poised to become available to the D.C. Housing Authority (DCHA) October 1, 2019, when the District’s 2020 fiscal year begins. DCHA owns and manages more than 8,000 units across the city; thousands are in serious disrepair, with tenants facing deplorable conditions.

Of the over $25 million, $24.5 million would be one-time money taken from the unrestricted reserves of Events DC, the District’s sports and entertainment authority. While Mayor Muriel Bowser’s administration did not include new funding for public housing improvements in its proposed budget, advocates flagged Events DC’s reserves—$180 million strong, according to the D.C. Auditor—as a place to mine. D.C. Council Chairman Phil Mendelson took that route, first suggesting that $30 million for public housing repairs derive from Events DC’s reserves.

But D.C.’s Chief Financial Officer Jeff DeWitt expressed concerns with the plan, writing in a May 15 letter to the Council that Events DC (on whose board he sits as an ex-officio member) is legally obligated to use its funds, including reserves, to repay its bondholders. Mendelson disagrees with DeWitt on this point, arguing that the Council wields the power of the purse over public dollars, via budgeting. Events DC is in part funded by hotel and restaurant taxes.

Ultimately, Mendelson reduced his recommendation to $24.5 million for public housing repairs funded by Events DC’s reserves, and the Council approved that amount Tuesday. (Another $24.5 million covered by money from the authority’s reserves would effectively reverse an increase in hotel taxes that Bowser had proposed.) A spokesman for DeWitt’s office says the office still stands by its view, but is “reviewing legal issues that have been raised.” The Office of the Chief Financial Officer decides whether to certify D.C.’s budget.

Another roughly $1 million to fund public housing repairs—targeted at DCHA properties located in Ward 1—is to come from revenue that would have been lost to a long-pending property-tax break for the Line Hotel in Adams Morgan. Approved by lawmakers several years ago, the tax break was contingent on the hotel project meeting certain local-hiring requirements and providing other community benefits. But a recent audit by the District found the project failed to meet the requirements. (The hotel’s developers say otherwise.)

Unlike the one-time Events DC money, this revenue provides a stream of funding for public housing repairs for the foreseeable future. DCHA is currently planning to refinance about a third of its units and is examining ways to bankroll well over $2 billion in total capital needs.

The budget now heads to Bowser for her review. Among other changes the Council advanced Tuesday: Ending fare-free service on the D.C. Circulator—one of the mayor’s 2019 initiatives.