Mayor Muriel Bowser unveiled her proposed fiscal year 2024 budget with a grim speech on Wednesday, declaring that amid a tough economic forecast, the city must go back to “the basics.” D.C.’s days flush with federal cash, she said, have ended.

Among the largest casualties were funds for emergency rental assistance and the production of affordable housing, the latter program a signature of Bowser’s that rose to historic levels during the pandemic. 

The proposed cuts come as D.C. barrels closer toward a 2025 deadline to build 36,000 additional units of housing, one-third of those affordable. It has met 59% of that affordability target, according to a city database, buoyed in large part by the more than $1 billion D.C. has spent on the Housing Production Trust Fund since 2015.

“When the money starts drying up, you have to ask the hard questions. Do I want housing? Do I want [rental assistance]? Do I want money for schools? I mean, they’re competing, and that’s the big change,” says Yesim Sayin Taylor, executive director of local think tank D.C. Policy Center. “This is a city that has been planning for growth since 2005 or so. And in the pandemic years we didn’t have to think about it because money rained from the skies.” 

Bowser is proposing just $8 million in local funds for the Emergency Rental Assistance Program, a program that provides one-time relief for tenants behind on rental payments, that has proven critical in preventing evictions. The $8 million funding level matches what D.C. funded before the pandemic, but marks a significant decline from the $43 million the program received this year – and which ran out of funds six months early. 

In a press release responding to Bowser’s budget proposal, D.C. Council Chairman Phil Mendelson said that current demand for emergency rental assistance is “double the $43 million”; Ward 1 Councilmember Brianne Nadeau called the program “our most effective eviction prevention program.” (In response to concerns about the decline in funding for ERAP, Bowser said Wednesday that “When those increases were made we were in a pandemic. Those circumstances have changed.”)

“The fact that we have run through $43 million less than halfway through the year is really concerning, and I think actually shows us what the post-pandemic economy, post-pandemic world looks like, which is that there is still an extremely high demand for emergency rental assistance. These are folks who are in rent debt and who need support to avoid eviction,” says Eliana Golding, an analyst at the D.C. Fiscal Policy Institute. “To have [funding] back down basically to what it was pre-pandemic was really a blow.”

The Emergency Rental Assistance Program is our most effective eviction prevention program. When it’s adequately funded more residents remain in their homes. That’s why I've worked to expand it every year. We need a plan for expanding funds, not shrinking them.

— Brianne K. Nadeau (@BrianneKNadeau) March 22, 2023

Perhaps even more of a weathervane for Bowser’s thinking lies in the Housing Production Trust Fund, a signature program of the mayor’s that she has touted as one of the most significant tools in D.C.’s arsenal to build and preserve affordable housing. 

Managed by the Department of Housing and Community Development, HPTF funds are commonly used to provide gap financing for new developments. Local regulations stipulate that 40% of program money helps create what’s known as “deeply affordable” housing, or units accessible to those who make significantly below-average wages. 

Bowser proposed spending $100 million on the fund, the minimum that she has promised to allocate it and a dramatic decline from the more than $500 million it received this year. (That figure includes federal investments, which have since run out.)

But because of significant increases in construction costs over the last several years – driven by supply chain woes and inflation – even funding levels on par with allocations in past years won’t go as far.

“If our goal is to increase affordable housing, we may have to look for ways that are different from the Housing Production Trust Fund. It is very expensive to build new housing; preservation is much cheaper. And perhaps we’ll have to prioritize preservation. You can essentially say, okay, build, build, build … but that comes with its own contention. People don’t want more building. They think everything you build has to have affordability components to it,” Taylor says. “I think next year, all of these third rail issues, all of the things that are sacrosanct, that people very much value will have to be put on the table, and we have to find better ways of doing those things.”

She adds: “I mean, when you have a restricted stock [of housing], and you don’t have  unrestricted money, you’ve got to make choices.”

Some proposals in Bowser’s Budget Support Act — the package of legislative changes that accompany every budget — would allow the city government to get more creative in that way: one, the Land Purchase Partnership Act of 2023, would permit the D.C. government to buy land occupied by rental or owner-occupied housing, and enter into a ground lease with the owner or developer, presumably with the intent to underwrite an affordability covenant. (It appears similar in spirit to another D.C. law, the District Opportunity to Purchase Act, which aims to prevent rental buildings from being converted into expensive condos.)

Other proposals in Bowser’s budget include increasing affordability requirements for property owners seeking to apply for a popular tax credit program, as well as allowing the Housing Production Trust Fund to purchase affordable rental properties on the brink of conversion to market-rate. 

But cast alongside small trims and big cuts to existing programs, members of the D.C. Council and housing advocates have warned that those proposals likely won’t go far enough to mitigate the city’s housing instability. 

Mendelson decried the proposed elimination of 22 housing inspectors, for example, saying it will “set back efforts to curb slumlord conditions for tenants and prevent illegal construction.” Ditto the mayor’s proposed defunding of “baby bonds,” a council-funded program that aims to help build wealth among children born into poverty.

While these proposals are far from final – the D.C. Council will soon begin a months-long process of remaking and approving its own version of the budget – Bowser’s presentation indicates that D.C.’s days of unfettered growth might be numbered.

“We have a number of tough years waiting for us,” Taylor says.