New D.C. Mayor Proceeds With Predecessor’s Affordable Housing Plan

In January, Muriel E. Bowser assumed her new role as the mayor of D.C. Bowser’s has set out to tackle some of the pressing issues facing the state, including a shortage of affordable housing. She is expected to introduce new initiatives and resume those started by Vincent Grey.

Bowser Pleased as New Housing Projects Are Underway

Back in July, Bowser addressed the affordable housing shortage the city has been facing over the past several years. She created the  “Housing Preservation Task Force” with the goal of creating 1,000 affordable housing units. There are currently 18 people serving on this committee, which Bowser is confident will take massive steps towards addressing the problems low income residents face.

“The point of the strike force is to develop the District’s strategy on preserving the over 8,000 units that are at risk due to the expiration of affordability covenants,” Bowser told reporters. “It needs to be a much more proactive strategy than waiting to try to deal with crisis situations like Museum Square.”

WAMU 88.5 reports that Polly Donaldson, the head of the D.C. Department of Housing and Community Development, will be heading the task force. Donaldson is formulating a strategy to come up with the necessary solutions.

Bowser Working With New Developerbigstock-Property-developer-inspecting-38696887

Bowser apparently recognizes that the housing shortage is largely driven by a limited supply of private, developable land. She has pledged to sell some of the city’s land to a local developer at a large discount under the condition that the land will be used to create housing stocks for low income residents.

Bowser spoke with city officials on September 22 to seek approval for her proposal. She is confident that the council will support the measure and construction will begin near U Street corridor. Brianne K. Nadeau, one of the city council members, spoke highly of Bowser and her efforts to improve housing stocks for the city.

“That’s what this mayor does — she takes something that is good, and she makes it better,” Nadeau told The Washington Post.

If her Nadeau’s words are a reflection of the sentiments of other city council members, then they will probably back the mayor’s other attempts to improve housing inventory. Council Chairman Phil Mendelson has been a little more apprehensive about the proposal, but also stated he intended to recommend the sale.

The council is still concerned about the state of the city budget, but believes that there is more than enough money to address the housing problem. They have previously suggested that affordable housing should be one of the city’s top priorities.

Five Factors that Could Impact the D.C. Housing Market in 2015

The real estate market in Washington D.C. is finally starting to gain momentum. Brad Rozansky of Foster Real Estate stated that many real estate professionals throughout the region are pleased that demand for housing is increasing. However, they are trying to not to become overly optimistic, because a variety of factors can impact the market, which makes it difficult to predict the direction it is headed.

Factors Affecting the D.C. Housing Market

The Washington D.C. housing market is facing a number of changes in the coming year. Here is an overview of some of the variables prospective buyers and sellers should be aware of.

housing-marketInterest Rate Changes

Interest rates have been wildly unpredictable over the past year. Experts initially forecast that they would skyrocket in 2014, but unexpectedly declined. They may go much higher this year if the Federal Reserve chooses to discontinue its monetary stimulus. However, that will depend on the overall direction of the economy. A sluggish March jobs report and lower GDP forecasts have dampened the outlook, which could keep rates low for the foreseeable future. Low interest rates will be necessary to continue building demand for the housing market.

Federal Austerity Measures

The D.C. economy has been more robust than other parts of the country. The single biggest reason that the city’s economy has been so strong is the support of the federal government. However, the federal government has recently imposed a variety of austerity measures that could harm the D.C. economy. They have imposed furloughs at the IRS and other key government agencies, which will start to weigh on the regional economy if unemployment continues to rise. The demand for housing may fall sharply if the middle class job market continues to falter.

Affordable Housing Initiatives

Affordable housing has remained one of the top priorities in D.C. over the past few years. Sen. Paul Strauss recently had a heated discussion with city council members over the direction of the affordable housing plans.

The council intends to find a way to address the housing challenges that impoverished residents face. They have the support of Mayor Muriel Bowser. Bowser has pledged to invest $100 million in affordable housing.

While increasing housing stocks would be beneficial for low income people, it could be a bane for middle class homeowners, because the increased supply could cause the value of comparable houses to decline. However, affordable housing could also help the overall housing market if it eased economic uncertainty. Prospective sellers should monitor affordable housing proposals to see how they may play out.