The renovated living room of 1452 Euclid St. NW, a rowhouse long owned by the D.C. Housing Authority that was recently sold for $920,000.
Marketed as a “stunning renovation,” a rowhouse at 14th and Euclid streets NW sold in August for $920,000, down slightly from its asking price. That the 2,260-square foot, four-bedroom home was able to fetch that price in Columbia Heights isn’t surprising. Neither is the $703,000 that a smaller rowhouse — also fully renovated — at 13th and Emerald streets NE sold for late last month.
But what is surprising is who's selling these homes, and many more like them: the D.C. Housing Authority, the independent city agency charged with operating, maintaining and building public housing throughout the city.
In recent months, the Housing Authority has been renovating and selling off single-family homes in some of the city’s hottest neighborhoods. The renovations — most costing hundreds of thousands of dollars — feature many high-end flourishes more closely associated with luxury than public housing: marble countertops, new hardwood floors, and stainless steel appliances.
All told, 26 houses have been — or will be — listed at prices that reflect D.C.'s booming real estate market and the fast-changing neighborhoods they are located in.
These are homes that the Housing Authority, and the D.C. government before it, has owned for decades. Once purchased for the purpose of housing low-income families in regular city neighborhoods — instead of isolating them in massive public housing complexes — the Housing Authority is now finishing off a decades-long sale of hundreds of the single-family homes.
The hope is that the sales' proceeds will cycle back into the preservation of existing public housing and help create new affordable housing units. In an era of declining federal support for public housing, Housing Authority officials say the money from the sales is vital to its mission.
But critics contend that the agency is only furthering gentrification by selling off the homes — some of which stood vacant for years — at top dollar.
A new way to house the poor
The two houses that sold last month are part of D.C.’s stock of what are known as “scattered sites” — single-family homes owned by cities or their public housing agencies and used as an alternative to traditional public housing.
Scattered sites came into vogue across the country in the 1950s and 1960s, after local and federal officials determined that the massive public housing complexes of the day did a better job of concentrating problems associated with poverty rather than help resolve them. The idea of the scattered-site program was to house the poor in middle-class neighborhoods, where they could be better integrated into the daily flow of city life.
In D.C., the scattered sites also served a secondary purpose.
After the devastating 1968 riots, the government could cheaply buy the homes and move in low- and moderate-income families as a means to help spur revitalization and redevelopment. The houses were purchased by the D.C. Redevelopment Land Agency, which had been created decades prior to help eliminate slums citywide.
At its peak, D.C. owned more than 320 single-family homes in neighborhoods hit hard by the riots — Columbia Heights, H Street NE and U Street. (Ward 1 had 42 percent of the homes, Ward 6 had 16 percent and Ward 2 had 13 percent.) In some of those neighborhoods, large swaths of residential blocks were government-owned. On 13th and E streets NE, for one, D.C. owned the homes located at 1326, 1340, 1344, 1364 and 1372; on nearby Emerald Street, it owned 1304, 1323, 1330, 1337, 1345, 1357, 1362 and 1372.
1452 Euclid Street NW was purchased by D.C. in 1972. It eventually fell into disrepair, as seen in this undated image from Google Street View. It was renovated and sold last month for $920,000.
But as the years went on, what started as a well-intentioned housing policy for the city’s low-income families was plagued by mismanagement. The city couldn’t adequately keep track of the homes, much less provide basic maintenance.
“The families didn’t have the means to maintain the properties, there weren’t the supports, and they quickly became run down,” recalls Lynn French, who for close to 15 years worked at the D.C. Department of Housing and Community Development on a program to take abandoned and blighted homes — including scattered sites — and turn them over to first-time homebuyers.
By the late 1980s, civic activists had identified dozens of scattered-site houses in Columbia Heights alone that were run down and had become havens for drugs and crime, worsening the blight the program was supposed to help resolve. In some cases, not even police were aware that the homes — long known for being eyesores and magnets for crime — were owned by the same city that employed them.
“Perhaps it could have worked, if it had been done in a more thoughtful manner, but it didn’t,” French says.
By the mid-1990s, a federally appointed board charged with salvaging D.C.’s finances decided to start selling off the scattered sites, first by transferring ownership of them to the newly created — and fully independent — D.C. Housing Authority and then working with nonprofit developers to sell them.
“We had to commit to selling them to low- and moderate-income families,” recalls Dave Wiley, a co-founder of Mi Casa, one of the nonprofits that received — free of charge — scattered-site homes to resell.
“I thought it was a really good idea,” Wiley says. He credits the program with not only offering low- and moderate-income families pathways to home ownership, but also for laying the groundwork for the revitalization that has taken place over the last decade.
“If you think about the state of Columbia Heights back then, you make the case that these houses helped prime the pump for what has happened in Columbia Heights since then,” Wiley says.
A hot market — and an opportunity
By 2012, the D.C. Housing Authority had disposed of 259 scattered-site houses, leaving just 52 in its portfolio. (See the 2014 list of homes here.) Housing agencies across the country had or were actively selling their scattered sites.
In early 2013, the Housing Authority submitted an application to the U.S. Department of Housing and Urban Development to sell 26 of the remaining homes. (Since the agency is overwhelmingly funded with federal dollars, HUD has to approve the sale or demolition of any public housing units.)
Agency officials say that years of deferred maintenance had made the homes too expensive to fix up and use for low-income residents. In its application, the agency said the homes “all have significant structural, code compliance, design deficiencies and other problems which make it untenable to attempt renovation within the public housing program.”
The living room of 1373 Emerald Street NE, which was renovated and sold by the D.C. Housing Authority in late August for $703,000.
While in the past the homes had been handed over to nonprofit developers, the Housing Authority hatched a new plan: renovate the homes and sell them at market rate, with the proceeds funneled toward fixing up existing public housing facilities.
Not only would selling the houses take them off the agency’s books — and free it from having to maintain them — but their locations in desirable neighborhoods would bring in revenue that could replace the money Congress had cut from public housing programs across the country.
“For years Congress has underfunded the public housing program, which makes it difficult to maintain public housing developments and multifamily buildings, let alone single-family homes that are scattered through the city,” says Kerry Smyser, the Housing Authority’s deputy director for development.
Smyser says that 85 cents of every dollar the agency has now comes from the federal government, down from when it was closer to 99 cents.
In its application to HUD, the Housing Authority estimated that it could take in $8.3 million from selling the 26 scattered-site homes. All that, says Smyser, will go towards renovating a 208-unit public housing complex in Ward 8.
“We’re using the proceeds at Highland Dwellings,” Smyser says. “The Housing Authority is rehabilitating 184 units and building 24 new units that are all 100 percent affordable.”
In order to get the top-dollar sales it desires, the Housing Authority hasn’t skimped on renovations. According to records obtained by WAMU 88.5, the Euclid Street house saw $281,716 worth of work done; at a house on 13th and E streets NE, it was $191,320. A four-bedroom house on Fifth Street NE just off the H Street corridor had a $358,800 renovation, and sold for $899,000 in April.
The sale of the houses has drawn criticism from some affordable-housing advocates, who say that the Housing Authority is only fueling the gentrification that has spread across D.C. in recent years.
“Here we have the agency that’s in charge of housing people in need actually acting as a house-flipper and a developer and promoting gentrification in the sense of putting housing on the market that’s at the top possible cost,” says Parisa Norouzi, executive director of Empower D.C., which advocates on behalf of low-income residents.
“Not even workforce housing, not even housing for someone of moderate income much less low income, but going to the extreme. It really calls into question the ethics of what the housing agency is doing,” Norouzi says.
Lynn French, the former D.C. housing official who now runs nonprofit housing organization Hope and a Home, agrees that the top-dollar sales are only helping push people out of neighborhoods like Columbia Heights, H Street and Shaw.
“If you’re starting off only with people who can afford a $900,000 mortgage, that’s just more of the same. That’s gentrification,” French says.
French says that a better alternative would have been to do what was done in the past: Sell the homes for low prices to qualifying families, and work with them to obtain financing to fix them up themselves.
“By doing it the way we did it, where people could design it, they could design what they could afford,” French says. “If someone else is renovating it for you, you’ll probably end up with the same thing you see in the classifieds every day with marble countertops and every fancy finish imaginable that may not be affordable to someone.”
Norouzi says that the houses could have been used by low-income families, split up into smaller units and used for individuals or converted into housing cooperatives.
But Smyser of the Housing Authority stands behind the market-rate sales.
“We believe our approach is more effective. One, we want to preserve and create more affordable housing in the District, and it's expensive to build a public housing unit. Second, we don’t want to be in the position where we put a low- or moderate-income family in a unit where they can’t afford to pay the taxes and insurance. We don’t want to set anyone up for failure,” Smyser says.
Dave Wiley, formerly of nonprofit developer Mi Casa, says he understands why the Housing Authority chose to sell the 26 houses to the highest bidders.
“If they’re selling one house and building four houses that are affordable, it may be hard to argue against that,” Wiley says. “I can appreciate someone wanting some affordable housing preserved in a neighborhood, but I can also appreciate the D.C. government wanting to expand the amount of money it has available for affordable housing by taking advantage of the appreciated value of these houses.”
Norouzi says that while the sale of the homes is what upsets her most, she’s also angry that the homes stood vacant for so long, especially during what city officials admit has been a yearslong increase in family homelessness. Additionally, she says, tens of thousands of residents remain on the waiting list for public housing and housing subsidies.
“There’s no reason why an agency that can renovate a home for luxury dwelling can’t manage a regular rental for lower-income workers, so it shows a lack of accountability and a lack of purpose for serving the poor,” she says of the Housing Authority.
But Smyser says that most of the homes were in such poor condition that they were largely uninhabitable. “These aren’t units that were in good repair. They had some deferred maintenance,” she says.
Not all the homes were unusable, though. In 2011, the Housing Authority received just over $1.9 million in stimulus funds from the federal government to fix up more than two dozen of its remaining scattered-site homes. The work was done — but many of the homes have remained vacant since. At some, the permits for the renovations remain in the windows, untouched.
Smyser says that the Housing Authority intended all along to sell the homes, and having them occupied could complicate the long process HUD requires before they can be disposed of.
“We have to have approval from HUD before we sell any of these units, and it takes anywhere from nine months to one year to submit that request and hear from HUD. It becomes a little difficult when we start occupying those units and we have requests into HUD to sell them,” Smyser says.
Norouzi doesn't buy it, and says that the homes should be used for homeless families. “There’s no greater use of these homes than to provide housing for families out of the D.C. General shelter,” she says.
Ultimately, Smyser says that with the decreases in federal funding, the D.C. Housing Authority has been forced into making tough choices.
"The hope is that yes, the coffers will open up and we’ll get more money from the federal government," Smyser says. "But right now we’re making do with what we have."