DC is not alone. High housing costs in most cities in the U.S. -- and in many other countries -- have become the new normal. Why are we experiencing this phenomenon? High housing costs are created by a combination of factors, including:
Market forces are the driving force in the cost of housing, with the laws of supply and demand creating the lack of affordability. More people need housing than the number of units, at least in the places most people want to live. Some DC elected officials are championing an increase in DC's population to one million residents, and the actual number of people moving to the District has increased DC's population to the highest levels since 1975. One strategy to address this problem is to build as much housing as possible, so more units are available. This places increasing pressure on DC neighborhoods and infrastructure to accept much higher density. Elected officials like the idea of more residents and buildings because they increase city revenues from income, property, and sales taxes.
Another strategy to the escalating price problem is to partially remove housing units from the free market by limiting the sale/resale price or rents of some affordable units. This can be accomplished through limited equity cooperatives and community land trusts that own land and housing and restrict their resale value. Housing in these types of ownership structures can only be resold at prices that remain affordable to the next person or family with a similar income. See this discussion of affordable housing models for more detail and other models that reshape the housing market. Similarly, caps on rents based on residents' incomes, inflation increases, or other measures can help keep rental housing affordable over the long term. What role should public subsidies play in establishing requirements for the long-term affordability of units receiving funds? How long should the affordability requirements last?
On March 15, 2018, the Cleveland Park Citizens Association hosted a public forum Banking for the Public Interest -- Not Private Profit. The presenters explored proposals for public financial institutions being explored by the DC Council, the green finance authority or "green bank" and the public bank. The five presenters include the following:
- Mary Cheh, Ward 3 DC Councilmember
- David Grosso, At-Large DC Councilmember
- Zach Weinstein, DC Reinvest coalition and DC Working Families
- Amir Kirkwood, Amalgamated Bank
- Ruth Caplan, DC Public Banking Center
On Sept. 26, 2017, Ward 3 Democrats hosted a panel discussion to explore three options to reduce climate change -- by financing the changes known to be effective. All three options are being explored at the DC Council, including a Green Finance Authority, a DC public bank, and a carbon tax, which are described in greater detail below.
Panelists included Ward 3 Councilmember Mary Cheh, DC Dept. of the Environment Director Tommy Wells, Natural Resources Defense Council's Sarah Dougherty, DC Public Banking Center's Larry Martin, and Chesapeake Climate Action Network's Mike Tidwell. The event was organized by Ward 3 Dems' Transportation and Environment Task Force and moderated by Ruth Caplan.
The DC Public Banking Center was created several years ago to advocate for establishing a public bank where municipal government revenues are deposited and loans issued to help finance affordable housing, small business and environmental sustainability. By participating with local financial institutions like Industrial Bank and City First, a public bank will help strengthen our local banks and prevent them from being gobbled up by Wall Street.
Now we have very good news to share! Thanks to initiative taken by Councilmember David Grosso, the FY18 DC budget has $200,000 to fund a feasibility study for a public bank. The funding came through the Committee on Business and Economic Development, chaired by Councilmember Kenyon McDuffie. The study will be done under the auspices of the DC Dept. of Investment, Securities and Banking (DISB).
We will be monitoring this study very closely to be sure that it covers loans for affordable housing and environmental sustainability, as well as for small business development.
Wall Street will not be happy when they see this moving forward, so it is urgent that we strengthen our base of support. Please be sure to sign our petition, urge your friends to sign, and email your contacts.
DC can lead the way!
Good news! Thanks to action by Council Member Grosso, the DC Council is funding a public bank feasibility study in the city’s budget for next year. His request went to the Committee on Business and Economic Development chaired by Council Member McDuffie. DC Public Banking Center is in full support of this initiative. Why is the Council taking action now?Read more