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City agencies, housing financiers warn unpaid rent is destabilizing affordable buildings; stabilization grants launched
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Summary
Witnesses and agency leaders agreed unpaid rent and high delinquencies threaten preservation of District-financed affordable housing. DCHFA and DHCD described a stabilization effort including a $8.6 million portfolio stabilization grant rollout and HPTF being used for bridge funding; council pressed for long-term solutions.
During a March 3 oversight hearing, developers, housing providers and agency leaders described an affordability crisis that now includes high rent delinquencies and delinquent portfolios at some District-financed properties. DCHFA and DHCD told the Committee on Housing they altered priorities in late 2024 to stabilize existing projects rather than fund as many new projects because unpaid rent and rising delinquencies make some projects at risk of foreclosure.
DCHFA Executive Director Christopher Donald described rising rental delinquency as an industry-wide shock: "We're seeing at least 15% and up to 30% in some instances across the portfolio," he told the committee, adding that properties with construction-to-permanent conversions are hard to close when delinquency reduces projected cash flow and lenders tighten requirements.
DHCD Director Colleen Green said the Housing Production Trust Fund (HPTF) is a capital tool but was used in FY 2024 to preserve projects at risk after the market deteriorated: "To preserve affordability and stabilize properties with existing district and federal investment," DHCD consolidated some 2024 allocations to prioritize distressed projects.
DCHFA launched a Portfolio Stabilization Grant (PSG) program in December 2024 to provide one-time recoverable grants to qualifying distressed properties. Donald said the agency had disbursed $8.6 million to 43 developments from the initial program funds and continues review of additional requests; DCHFA also reported it had a remaining ~$1.4M (agency funds) available for additional properties. DHCD announced a consolidated RFP in late 2024 that prioritized projects with prior District or federal investment and short-term stabilization needs.
Developers and nonprofit providers testified that the stabilization funding was necessary but insufficient. Jubilee Housing urged quicker access to recurring funding streams for returning-citizen housing and to expand eligibility to projects without prior DHCD commitments. Providers at the hearing said that while short-term bridge funding averts immediate foreclosure, a longer-term, predictable set of resources is required to preserve District-backed affordability at scale.
Ending: Committee members pressed for an evaluation of the stabilization awards and for a strategy that balances preservation of existing District investments with a pipeline for new development. DCHFA and DHCD said they will supply the committee with lists of recipients, follow-up reports on outcomes, and propose next steps for the FY26 budget process.
