Merely building more homes in Washington, DC does not fix affordability because new construction is predominantly luxury-oriented housing that fails to meet the needs of moderate to low-income residents, while high land, construction, and regulatory costs prevent the development of truly affordable housing. Artificial scarcity, high interest rates, and localized political opposition also restrict supply.

Why Increased Supply Isn’t Enough

Luxury Focus: New construction often targets high-income earners. Because land, labor and materials costs continue to rise, and builder profits increase with luxury products, new builds are rarely priced for lower-income households.

High Development Costs: The high cost of land and construction in and around the District makes it challenging for developers to make margins work on affordable projects. This creates a necessity for public subsidies, but they–also–are insufficient.

According to the Urban Institute, public subsidies can’t keep pace with our massive affordable housing supply shortage, they’re chronically under-funded, and they battle against the same high construction costs, and regulatory barriers that limit market-rate development.

Limited Land and Zoning: Much of the District is built out, and zoning laws restrict denser development in many areas, particularly in the northwest quadrant, diminishing the amount of space available for new housing. Historic preservation and neighborhood boards create additional hurdles.

Slow Development Process: Developing affordable housing often takes three to five years from the planning stage to delivery. During that time, funding can dry up, regulations can change, and costs can rise.

“Repositioning” Affordable Units: Demolishing affordable housing to build high-end, luxury units has been a significant, ongoing trend driven by private developers and supported by government efforts to modernize the city’s housing stock. Between 2002 and 2012, this process reduced the number of affordable units (priced under $800/mo.) by 31,000 while tripling the number of high-end units. To repeat; City leaders implemented housing programs benefitting private developers that cut the number of affordable homes from 40% of the District’s rental housing stock to 20%.

It is no coincidence that homelessness in the District of Columbia experienced a significant surge in the years immediately following 2010. While national homelessness was generally declining after 2010, DC saw a nearly 30% increase between 2010 and 2016:

• 2010–2014: Homelessness in DC rose by 18%, increasing from 6,539 to 7,748 people.
• 2016: Homelessness in DC peaked in 2016 at roughly 8,350 people.
• Family Homelessness: Family homelessness increased by 50% between 2010 and 2014.
• Post-2016: Following a peak in 2016, homelessness decreased significantly, hitting a 17-year low in 2022 with 4,410 people counted

This shows direct causation between the city’s housing policies, homelessness, and the affordable housing crisis we’re now experiencing. Two former mayors contributed to the crisis, while the current mayor implemented policies to help correct it. Mayor Bowser’s “Homeward DC” plan, which focused on rapid re-housing and permanent supportive housing, supported by temporary pandemic-era funding, was effective in bringing down the homelessness rate by 47%.

Still, DC still ranks closely behind Hawaii and ahead of New York for the highest homelessness rates in the nation. While New York holds the highest total number of people experiencing homelessness, Hawaii and the District of Columbia have higher rates relative to their population size. In 2026:
Hawaii: 8.05 to 8.1 people homeless per 1,000 residents
Washington, DC: 8.0 to 8.3 people homeless per 1,000 residents
New York (State/City): 7.95 per 1,000 residents

PUD Repositioning: Developers use the Planned Unit Development (PUD) process to increase building density, sometimes resulting in the removal of existing affordable housing.

IZ Program: While the city requires “inclusionary zoning” (IZ), these new units often target households earning up to 60–80% of the Area Median Income (AMI), which can be higher than the rents of the units they replaced. The IZ program is notoriously slow, inefficient, and flawed. Enacted in 2009, it had produced only about 2,600 affordable housing units as of 2026, primarily through developer set-asides in new market-rate projects over the past decade. The program adds less than 300 units annually, the vast majority which are rental units.

DCHA Repositioning: DCHA’s redevelopment strategy often partners with private developers to convert public housing into mixed-income developments, which has resulted in a reduced number of deeply affordable units.

Structural Barriers

Artificial Scarcity: The available supply of residential housing is intentionally or structurally restricted, causing prices to rise, even though there is no natural shortage of land or construction capacity. This is manufactured through regulatory bottlenecks, investor behavior, or deliberate under-development by builders. In the District,  artificial scarcity is primarily driven by restrictive zoning laws and the replacement of affordable units with luxury housing.

These factors suppress inventory and put upward pressure on prices. With massive federal employment cuts of 2025, inventory is increasing, but due to government policies and mortgage interest rates coupled with home prices that exascerbate the ‘locked in’ effect, affordability has not meaningfully improved with supply.

Real Solutions

Our affordable housing crisis can only be addressed across multiple fronts simultaneously. There is no single or fragmented solution that will garner results. A step in the right direction may be the the 21st Century ROAD To Housing Act, which combines elements of the House-passed Housing for the 21st Century Act and the Senate’s ROAD to Housing Act of 2025.

The 21st Century ROAD (Reinvestment, Opportunity, and Access to Development) to Housing Act

Here’s how this bill addresses the affordability crisis:

• HOME Program Reform (Section 502): Reauthorizes the HOME Investment Partnerships Program and makes it more usable by increasing income eligibility for HOME-assisted homebuyers to 100% of Area Median Income (AMI) from the previous 80% cap, and simplifying CHDO (Community Housing Development Organization) board requirements.
• Higher Purchase Price Limits: The legislation allows HOME funds to be used for homes valued up to 110% of the area’s average purchase price, up from the current 95% limit, allowing buyers to select from a broader inventory.
• First-Generation and Underserved Focus: The bill prioritizes “first-generation” homebuyers, which are defined generally as individuals whose parents did not own a home or who experienced foreclosure, and those from historically disadvantaged communities.
• Increased Assistance Amount: The legislation enables higher down payment assistance (DPA) amounts to help bridge the equity gap, with provisions for up to $20,000 to $30,000 or more in grants (depending on the specific pilot program or state implementation).
• Infrastructure Financing: Allows HOME funds to be used for infrastructure improvements adjacent to housing developments, particularly in non-entitlement (rural) areas, easing the financial burden on developers.
• REVITALIZE Act/RESIDE Act: Provides funding for the conversion of vacant and abandoned buildings into affordable housing.

• Lifting the PWI Cap (Public Welfare Investment): Section 204 of the act increases the PWI cap for banks from 15% to 20%. This allows financial institutions to invest more capital into Low-Income Housing Tax Credit (LIHTC) projects, creating a larger supply of affordable units.
• Strengthening LIHTC: The legislation leverages the existing LIHTC program, which is the primary mechanism for encouraging private investment in affordable housing. It builds upon previous increases in state tax credit allocations to ensure developers can secure funding.
• Incentives for “Targeted” Areas: The bill prioritizes projects in “Targeted Neighborhoods” by allowing higher credit percentages—often a 30% boost (known as the 9% credit for new construction or 4% for acquisition/rehab) in difficult development areas where housing is needed most.
• Streamlined Rehab/Construction: To reduce pre-construction costs for developers, the bill streamlines NEPA (environmental) reviews for small and infill housing projects (defined as infill on vacant or underutilized lots in developed areas), and small-scale construction (4 or fewer units). The primary mechanism for this is the expansion of Categorical Exclusions (CATEX). Under NEPA, projects usually require an Environmental Assessment (EA) or a more intensive Environmental Impact Statement (EIS). But activities that don’t significantly affect the environment can be “categorically excluded.” The bill expands these exclusions, allowing small, infill, and rehab projects to bypass the lengthy, costly environmental review process entirely. This reduces pre-construction costs (legal fees, environmental consultants) and cuts months or years off the development timeline, however, it could also accelerate gentrification leading to increased homelessness and higher home prices, increased stormwater runoff in Anacostia and the Potomac, and less accountability for developers in historically disinvested or environmental justice neighborhoods. There is also a real concern that these types of exemptions will result in reduced opportunities for public comment, preventing residents from having a say in how new developments affect their local environment and neighborhoods. The bill also allows HUD to transfer some of its NEPA responsibilities to local governments and authorizes HUD to treat certain federal housing assistance projects as “special projects” to simplify compliance with NEPA, removing duplicate requirements for projects funded by multiple sources.
• Rehabilitation Focus: Incentives apply not just to new construction, but to  rehabilitation of existing, aging affordable units (such as via the Rental Assistance Demonstration Program, or RAD). Renovating existing structures, which is often discouraged by complex regulatory requirements, and minor public improvements associated with these housing projects.

Zoning and permitting reform aimed at cutting red tape for new residential construction, particularly in areas where housing demand far outpaces supply.

• The bill encourages state and local governments to update restrictive land-use policies without direct federal encroachment, instead using federal funding (like CDBG) as an incentive for transparency and reform.
• Encouraging “Missing Middle” Housing: Encourages zoning that allows for more high-density single-family, multifamily, accessory dwelling units (ADUs), duplexes, and townhouses.
• Reducing Restrictions: Promotes the reduction of minimum lot sizes, setbacks, and parking minimums, which often prohibit the creation of new housing units.
• The manufactured housing modernization section of the bill updates the definition of manufactured homes to include units “without a permanent chassis,” reducing production costs and allowing them to be placed in more residential areas, which increases naturally occurring affordable housing.
• Single-Staircase Reform: Directs HUD to establish guidelines for point-access block buildings, allowing for single internal stairways “Smart Stairs” in buildings up to five stories, which lowers construction costs and improves design flexibility for smaller plots. Architects and planners say these are safe if theyfeature better, fire-rated construction, include mandatory sprinkler systems, and have shorter evacuation distances for residents compared to long corridors in conventional buildings. But firefighters and safety agencies like the International Association of Fire Fighters (IAFF), argue that single stairways remove essential redundancy. If the single stair is blocked by fire, smoke, or a violence incident, residents have no secondary escape route, and firefighters have no separate route for rescue operations. In a city like DC, this should merit close scrutiny.
• Permitting and Environmental Review Streamlining
  See above “Developer Incentives.”  Also, the Accelerating Home Building Act section of the bill provides grants to local governments to implement “pattern books” or pre-reviewed, pre-approved building designs, which dramatically cuts down permitting times.
• Coordinated Reviews: Promotes joint environmental reviews between HUD and the U.S. Department of Agriculture (USDA) for projects receiving combined funding.
• Build Now Act: Adjusts Community Development Block Grant (CDBG) allocations to reward jurisdictions that increase their housing supply faster than their prior baselines, creating a positive feedback loop for growth.
• Innovation Fund: Authorizes $200M annually for competitive grants to communities that demonstrate measurable improvements in housing supply growth and adoption of innovative, density-friendly zoning reforms.

Existing Renter Protections

The Act (Sec. 201) expands the Rental Assistance Demonstration (RAD) program by removing existing caps on the number of units that can convert to long-term Section 8 contracts. Tenants have the right to return to their homes after rehabilitation, without re-screening following conversion. Residents may also gain the right to move with a tenant-based voucher after a set period, offering more flexibility. Properties are placed under long-term (15-20 year) contracts to ensure sustained affordability.

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