Why did those apartments for the poor cost D.C. more than $1 million each?

Washington Post

15-06-2025

The June 8 front-page article 'D.C. apartments for the poor exceeding $1 million to build,' which highlighted the high costs of a handful of developments financed in part with the Low-Income Housing Tax Credits program, did not reflect typical costs of developments financed by the credit program. The credit, which has been the primary federal incentive for the construction of rent-restricted apartments for low-income families since 1986, has generated construction of more than 54,000 properties containing more than 3.7 million affordable homes nationwide. The vast majority have been built at comparable costs to similar buildings serving higher-income households — even as credit-financed properties must meet a host of federal and local labor, environmental and approval requirements and achieve standards of quality and durability far beyond the typical market-rate project.
Stockton Williams, Washington
The writer is executive director of the National Council of State Housing Agencies.
Jubilee Housing appreciated the June 8 front-page article highlighting the cost of producing affordable housing in D.C. The affordable housing crisis remains one of the most pressing issues of our time, and we must harness every possible solution to meet the need.
That said, the article's focus on the cost efficiency of Ontario Place, which Jubilee Housing is developing, missed a crucial point: Cost per unit is only one part of a complex picture and often a misleading one. Ontario Place provides 52 affordable homes, and nearly half are large enough for families. A lower per-unit-cost design with mostly one-bedroom units could have yielded more smaller units — and a more typical per-unit cost — but it would have been able to house fewer people overall. Maximizing family-size units not only meets District policy goals; in this project, it was actually 10 percent less expensive per person housed than the original design with mostly one-bedrooms and studios.
We agree that in most jurisdictions, affordable housing developments are expected to achieve numerous additional policy goals. These include local hiring, higher wage scales and environmental sustainability features. Though those are worthy goals, such requirements can add 10 percent to 25 percent to project costs in D.C.
On top of this, bond financing and low-income housing tax credits, which provide more favorable rates but higher transaction fees, are inherently more expensive than market-rate financing. That is especially true for smaller projects such as Jubilee's, where the percentage of financing costs is higher. Until viable alternatives exist, these remain a cost of doing business.
Also, for decades, affordable housing was built where land was cheap, placing families far from transit, jobs, fresh food and quality schools. That strategy failed. Continuing it while expecting different outcomes is, as they say, the definition of insanity.
Yes, affordable housing in D.C. is expensive, and it is a strategic investment. Affordable housing providers must meet public policy mandates and, in doing so, create economic value across the region. More important, Jubilee delivers what D.C. needs most: high-quality, affordable, family-size homes close to amenities and resources.
Economist Raj Chetty has shown that the highest predictor of future success is the Zip code we live in, and other experts have shown that families in high-opportunity neighborhoods see long-term income gains — estimated at a combined $1.4 million over a decade for Ontario Place residents.
The on-site aquaponics farm that some commentators have focused on will generate a combined $500,000 in annual wages for the people it employs and $920,000 annually in public savings from reduced reincarceration and reduced health incidents. The project will generate nearly $10 million in long-term public benefit.
To break cycles of poverty, we must embrace innovation. We shouldn't just focus on per-unit development costs but also on how many lives can be supported by that investment.
Alex Orfinger, Arlington
The writer is chair of the board of Jubilee Housing.
The June 8 front-page article on publicly funded housing in D.C. underscored an alarming and indefensible failure in the city's approach to affordable housing. The fact that so-called affordable apartments exceed $1 million per unit to construct is not just unsustainable — it's outrageous.
This is further evidence that Democratic Mayor Muriel E. Bowser's housing strategy is completely out of touch with the lived reality of most District residents. While the city pours $100 million into the Housing Production Trust Fund, we see little oversight and even less affordability. Developers are racking up extravagant costs while D.C. taxpayers foot the bill.
There is no justifiable reason taxpayers should be asked to subsidize $1 million apartments under the false promise of affordability. We must demand an immediate audit of all Housing Production Trust Fund expenditures, freeze new luxury-affordable projects and refocus the city's housing investments toward cost-effective, community-based development.
The District needs leadership that prioritizes working families. D.C. can and must do better.
Ernest E. Johnson, Washington
The writer is a Democratic candidate in the D.C. mayoral race.
The Post's June 5 online editorial 'Eliminating the tipped minimum wage has been a disaster' shared only part of the story of D.C.'s restaurant industry after the covid-19 shutdowns.
Full-service employment, after fully recovering from the covid-19 pandemic in 2023, has remained at levels consistent with pre-pandemic employment, according to data from the Bureau of Labor Statistics. And D.C.'s food service employment has outpaced those of Maryland and Virginia.
BLS Quarterly Census of Employment and Wages data shows that the restaurant industry in D.C. is growing, including in full-service restaurants that employ tipped workers.
Wages for tipped workers have shown steady growth thanks to Initiative 82. And BLS data shows that average wages for staff in full-service restaurants rose above their pre-shutdown level.
But let me be clear: I do not want to minimize the challenges our local restaurants are experiencing. Like so many families here in the District, restaurants have been hit hard by rising food prices and federal layoffs in the wake of the Trump administration's policies. Even before President Donald Trump took office, my colleagues and I sought to spur economic opportunities for our small businesses and restaurants through legislation, including through the Restaurant Revitalization Act, which was passed last year.
Good policy must be guided by good data, and the numbers do not justify going back on our word to workers. The data shows that wages have been rising and that the number of restaurants has increased since I-82 was implemented. As a council, our responsibility is to make our economy work for everyone and not balance our budgets by rolling back wages and protections for working families.
Janeese Lewis George, Washington
The writer represents Ward 4 on the D.C. Council.
The Editorial Board is right that Initiative 82 has been bad for both D.C.'s restaurants and workers.
The BLS Quarterly Census of Employment and Wages shows D.C. has lost about 5 percent of its restaurant jobs since the law went into place. That's over four times higher than the losses seen in surrounding Maryland and Virginia counties.
The District's workers have lost over $11.8 million in earnings since the law took effect because of a loss of income from tips. With this context, it's easy to see why even the city's leadership is taking measured steps to stop the law's devastation.
Rebekah Paxton, Arlington
The writer is research director for the Employment Policies Institute.
I agree with the June 5 online editorial, 'Eliminating the tipped minimum wage has been a disaster.' Implementing Initiative 82 was a misguided effort rooted in policy frameworks that don't align with the realities of the city's hospitality industry. The policy disproportionately targets large chain restaurants with large staffs and also hurts the city's diverse food scene.
Initiative 82 has hurt local restaurants in two key ways:
First, it ignored the ripple effects of payroll hikes. Increasing base wages doesn't just affect take-home pay — it also increases payroll taxes and administrative costs. The law mandates higher operational costs within D.C. that put restaurants here at a competitive disadvantage relative to restaurants in Virginia and Maryland.
Second, under the previous law, restaurants were already required to ensure that tipped workers made at least minimum wage. If tips fell short, employers were legally obligated to make up the difference.
And, the service fees that have been introduced to cover rising costs are revenue to the restaurants that do not have to be distributed to staff. Ironically, under the new system, there is potential for some servers to earn less than they did before, with diners paying less in tips because of those service fees.
The city should return to the previous system, which minimized costs for businesses while still guaranteeing a safety net for workers. It's encouraging that The Post's Editorial Board opposed both Initiative 82 and its predecessor, Initiative 77. But many restaurant workers and diners have come to a similar conclusion far too late.
Jonathan Halperin, Washington