As D.C. voters prepare to select their first new mayor in more than a decade, the high cost of housing and the slowing development pipeline have become prominent issues in the race.
The winner of the June 16 Democratic primary is likely to win the general election in the heavily blue city, and polls show the top two candidates are D.C. Councilmember Janeese Lewis George and former Councilmember Kenyan McDuffie.
The front-runners have said they want to build more housing and released policy agendas to spur development. McDuffie participated in a 30-minute Zoom interview with Bisnow late last month. Lewis George’s campaign has declined several requests for an interview.
McDuffie, who has received more support from the real estate industry in the form of campaign contributions and endorsements, described a wide range of problems with D.C.’s housing system that he hopes to solve.
Courtesy of the Kenyan McDuffie campaign
Mayoral candidate Kenyan McDuffie
He said new affordable housing costs too much to build, and owners of existing affordable housing are struggling to stay afloat financially. He said delays in the permitting process have made developing in D.C. less predictable and more costly. And he said the city’s policies have led outside investors to avoid funding D.C. housing projects.
“People feel like a line has been drawn around Washington, D.C., and capital is going elsewhere and not being invested to build housing that is sorely needed in our city right now,” he said.
In each of the last two years, fewer than 2,000 multifamily units have begun construction in D.C., well below the 2022 peak of 9,441 units, according to the Washington DC Economic Partnership.
His solutions to these problems include creating a “cut-the-cost task force” and reforming the city’s key Housing Production Trust Fund to prioritize projects with lower costs per unit. He also wants to improve coordination across agencies to create a “fast lane” for permitting new housing projects. And he wants to allow more dense housing development in the next version of the comprehensive plan than Mayor Muriel Bowser‘s administration has proposed.
The following interview has been edited for length and clarity.
Bisnow: Where does housing rank among the biggest issues that people are concerned about, and how big of a priority is it for you?
McDuffie: So, in talking to thousands of District of Columbia residents over the course of this campaign, as well as the thousands that I’ve talked to over the course of my career in public service on the council, the top issues that I’m hearing about are public safety and affordability, and within that affordability category, one of the top issues is housing.
We have had a lot of fits and starts in terms of how we’ve approached housing over the last couple of decades. More recently, pre-pandemic, [we had] a lot of investment resources in our Housing Production Trust Fund. Not as much these days. We’ve built housing to try to match incomes, but we still are challenged about that.
This market, right now, though, is unlike one I’ve seen in quite some time, where investors don’t have confidence in Washington, D.C., right now for any number of reasons, but it has led to an environment where people feel like a line has been drawn around Washington, D.C., and capital is going elsewhere and not being invested to build housing that is sorely needed in our city right now.
Bisnow: You’ve talked about how one of your priorities surrounding housing development is to streamline and expedite the permitting process. How would you undertake that effort?
McDuffie: When I think about the ways that the government can help really create a better environment and the tools that we actually control, we have to think about the challenges that people face. D.C. has been spending at least $100M a year on the Housing Production Trust Fund. Yet projects are costing anywhere from $650K, $700K to $1M per unit for affordable units.
We have to cut the cost, and I’m going to create a cut-the-cost task force to reform the Housing Production Trust Fund, really scoring for more units per dollar and thinking about issues that providers face, minimum private equity share, standardized underwriting timelines.
Mission-driven housing providers really aren’t seeing these days the financial tools that they need to stay viable long-term, and we don’t want to lose the affordability that would otherwise be invested in the assets that they have. So we need some real, serious, targeted tax abatements with enforceable community benefits and annual public reporting so that we both are getting the resources to those mission-driven providers to be able to build housing that we need without being driven as much by profit, but also having the public reporting so that D.C. residents can understand in a way that is more transparent how we’re spending their tax dollars and the return, importantly, that they’re seeing on the investment.
Courtesy of the Kenyan McDuffie campaign
Mayoral candidate Kenyan McDuffie
Bisnow: Yeah, and we want to go back and touch on the HPTF, but I wanted to hone in on the permitting process specifically. How exactly would you go about expediting it?
McDuffie: First, we have to touch on the agencies that already exist that touch on housing and the ability of people to build more, faster — Department of Buildings, Department of Housing and Community Development, the Housing Authority — you think about all those agencies across government that touch on housing really being better coordinated and creating a fast lane for the ability to unlock those stuck deals in the District of Columbia. Having alignment across those agencies is going to be important.
I think about some of the ways that Charlotte has streamlined processes and coordinated across agencies so that there’s one-stop permitting and the ability to get what you need without government agencies pointing the finger about who’s creating the roadblock, who’s slowing down the process. And so it is creating that fast lane and interagency coordination to really be able to unlock the permanent process so that it’s not slowing down deals — it’s making government more nimble and efficient in the ability to support the private sector in making the investments and, frankly, restoring some of the investment confidence in our market.
Bisnow: You touched on how investors don’t have confidence in D.C. What specifically would you do to bring capital back to D.C. to help developers get more financing for their projects?
McDuffie: Well, we’ve got to make government work better, faster and eliminate the red tape. People want a level of predictability that they currently don’t have. And so, as a threshold matter, in a way that I’m laying out a vision of economic growth with guardrails, it is being a city that means business that really emanates a pro-growth, pro-predictability mentality in the way that we operate and restoring a culture of transparency, accountability and a culture of execution. The ability to coordinate across agencies is going to be important, but it also is making sure that we’re working to streamline processes, even in our ability to work with the federal government.
I think about the opportunity that exists for investment on underutilized federal properties, and we have to make sure that we create as little friction as possible to reduce the developer risk on utilizing and building some of those underutilized federal properties, making sure that the market understands that we want to convert those to housing and mixed-use, getting them on the tax rolls, providing as clear guidance as possible upfront so that the projects can start immediately once the sites are available to the market.
Bisnow: Last year, D.C. passed one of its biggest housing bills in years, the Rental Act, which aims to address the issues of rent delinquencies and slowed housing investment. Do you think the Rental Act did enough, or is there more to be done?
McDuffie: I voted in favor of the Rental Act, unlike my principal opponent, because I understand from working with providers over the years the crisis when it comes to delinquency in the market. And the rental delinquency crisis, it really nearly broke any number of providers and put some people out of business, and cases get dragged on for 12 to 16 months. It is making D.C. an outlier in the region, and it’s one of the reasons why we’re not seeing the capital invested.
The Rental Act was a good first step, but looking at some of the additional things that need to happen, some of them within our control as a government, some of them less so, because it requires the federal government, the president, the Senate to appoint and confirm judges for D.C. Superior Court, landlord-tenant court. But there are some things we can address around prefiling notices being shortened to 10 days.
Tenants should have a process where they can pay rent into a court registry, essentially an escrow upon a provider’s motion, so that it’s clear that they have the money and that, based on how the court rules, the money either goes back to the tenant or it goes to the housing provider, the landlord. I think it’s a fair system that could be put in place that right now, without it, again makes D.C. more of a hole in a doughnut when it comes to landlord-tenant court and how long it takes for cases to really make their way through the process.
Bisnow: We want to talk more about the Housing Production Trust Fund. Your opponent co-sponsored the Housing Production Omnibus bill in February that would overhaul the fund. Do you support that bill?
McDuffie: I’ve looked at the bill, and I’ve talked with a number of people in the industry. I’ve talked to a number of people who want housing, but the people who understand D.C.’s market, including some of those mission-driven nonprofit providers, do not support that bill. They think that it actually will add to the red tape and decrease the opportunity for D.C. to utilize HPTF in a way that facilitates building more housing faster.
I mentioned my cut-the-cost task force, and part of that is making the Housing Production Trust Fund work better and making the money go farther and reforming it in a way that really rewards scoring projects for the ones that are really giving the city more units per dollar. We need to see a better return on our investment, but we also need to see the dollars go out of the door quicker so that we can get the buildings constructed that are going to give us the housing that we need.
So we do need to see reforms there, but what they propose is not sending confidence to people who know the District’s market and would like to be able to cut the red tape and see more resources flow to building housing that we need.
Bisnow/Jon Banister
Campaign signs for McDuffie and Lewis George have been placed throughout the city ahead of the June 16 primary.
Bisnow: You set a goal of creating 12,000 new housing units by 2030, which is significantly lower than Councilmember Lewis George’s goal of 72,000 units within five years. How did you come up with that number? And did you consider aiming higher?
McDuffie: Yeah, I mean, we certainly considered aiming higher. We are aware of the significant need in Washington, D.C., but we also understand the market forces that we’re up against. We also know from having talked to experts what we can actually achieve over the next several years, and so my plan is grounded in evidence, is grounded in facts, is grounded in market realities.
And so to lay out a goal to build 12,000 new units of housing by 2030 is highly appropriate and bold, given the circumstances, and establishing a housing ombudsman, which I’m going to do to really hold all those agencies accountable for the things that we discussed earlier: how they coordinate, how we have a one stop, a fast lane, how we’re unlocking those stuck deals.
Bisnow: I want to touch on the ongoing comprehensive plan rewrite. You released a statement saying the Office of Planning’s draft was insufficient to address the housing shortage. So, as mayor, how would you direct the Office of Planning to change the comprehensive plan?
McDuffie: Well, we need to be bolder. This is supposed to be a plan that takes us to 2050, and it just doesn’t have the boldness, doesn’t have the vision that is necessary to build the housing that we need and to build that housing faster. There needs to be more opportunities to build as a matter of right, particularly near transit. We need to be thinking about how we build more townhomes, more multifamily in high-need areas.
We need to look at how, particularly in single-family-owned areas, we can build different housing types, and I’m not talking about just totally changing radically the quality of life of people all over the city. But it is a recognition that we need a comprehensive plan that is bolder, that lays out a more aggressive vision of getting us to our housing goals that require more housing being built in the form of townhomes, in the form of multifamily, in the form of going up higher when you need transit.
Bisnow: The vision for the old RFK Stadium site includes a mixed-use district with up to 6,000 housing units. The city council opted for the standard zoning process for those units, a decision that you’ve called “death by delay.” What would you do as mayor to speed up development on that site?
McDuffie: When you have opportunities to build housing where it doesn’t currently exist, you should be able to do it faster, without delay. And I think RFK is just an example of how we fall short of building the housing that we need across D.C.
I would want to alleviate the necessity to have to go before the Zoning Commission in order to build the thousands of units of housing that we need on that site, because it also is going to give you the people and the income to support all the neighborhood-serving amenities that are needed on that site as well. I just think it really was a missed opportunity, and we’ve seen where, even under the best intentions and decent circumstances, projects can get stalled. And you can see death by delay. If not death, you can see where projects become more expensive to build and you lose opportunities to do things quickly.
Bisnow: What would the process look like without going through the Zoning Commission?
McDuffie: Well, I mean, the law is law at this point, and so what we’re going to do is work under the circumstances that we’re dealt with, but I did cite it as an opportunity that I think we missed. And so the comp plan, I don’t think it’s bold enough. The council is going to have it. The opportunity for the next mayor to really weigh in is going to be important, but RFK, I think, doesn’t need the layers of process, or even the [planned unit development] processes, and that there should be opportunities to build matter of right on the site.
Bisnow: Any last thoughts or anything we haven’t asked about?
McDuffie: I’ll just say, I think RFK is a tremendous opportunity that we still have. So I’m excited about that project for D.C.’s ability to grow. I think the expansion of Union Station is yet another example that the district has to really work with the federal government to make billions of dollars of investment in a way that creates jobs, stimulates our economy and gives us some of the economic activity that we sorely need as we see continued federal contraction.
