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Testimony of Richard A. Monteilh
Director, Department of Housing and Community Development, on the FY 2000 Baseline Budget
Council of the District of Columbia, Committee on Economic Development
March 31, 1999




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Good morning, Chairperson Jarvis, Councilmembers, and Council staff.

I am Richard Monteilh, Director of the Department of Housing and Community Development.

The members of the DHCD staff who are at the table to assist in responding to your questions are:

  • Melvin Waldrop, Chief Operating Officer
  • Henry Mosley, Chief Financial Officer, Business and Economic Development ,
  • Pamela Vaughn-Cooke, Acting Chief, Division of Development Finance, and
  • Mary Hammond, Chief, Division of Residential and Community Based Services
  • Lynn French, Homestead Program Administrator

In my remarks this morning I will be discussing:

  • DHCD's FY2000 Baseline Gross Budget
  • Capital Budget, and
  • Budget Enhancement requests

as well as outlining some of the major activities currently underway at the Department.

[Baseline Gross Budget]

DHCD requests approval of its gross budget for FY2000. The FY2000 Gross Budget request is $57,939,000 and 132 full time equivalent (FTE) positions an increase of $1,230,000 and a decrease of 32 FTE positions from FY1999.

The total Baseline Gross Budget includes four different sources of funds:

  1. Local (appropriated funds)
  2. Intra-District
  3. Private/other, and
  4. Federal (Consolidated Action Plan Entitlement funds)

[Local Funds]

The local appropriated funds are $3,889,000 and 7 full time positions -- an increase of $266,000 and a decrease of 1 full time position from FYl999.

The local funds provide financial assistance to District residents who do not qualify for federal grant funds, because their incomes exceed federal guidelines. Therefore, these funds serve as a catalyst to help attract middle income and working families to the District.

[Intra-District Funds]

The Intra-District fund budget for FY2000 is $ 1,200,000 and no FTEs, which is consistent with the FY1999 budget. The $1.2 million represents the authority used when DHCD is a selling agent for Intra-District funds.

[Private/Other Funds]

Private/Other funds total $4,462,000 and no FTEs, which is also consistent with the level in the FY1999 budget. These funds will be used for the HPAP, Multi-family Residential Rehabilitation, and the Housing Production Trust Fund programs and will generate 270 housing units.

[Federal Funds]

Federal funds total $48,388,000 and 125 full time positions an increase of $964,000 and a decrease of 32 full time positions from FY1999. In FY2000 the District will be in the fifth, and last, year of its 5-year; FY1996 to FY2000 Consolidated Plan. The FY2000 Action Plan requires a separate approval resolution by the City Council and is due to HUD by mid August.

There are four HUD entitlement grant programs included in the FY2000 Action Plan. They are:

  • Community Development Block Grant Program (CDBG)
  • HOME Investment Partnerships Program (HOME)
  • Emergency Shelter Grants Program (ESG), and
  • Housing Opportunities for Persons with AIDS Program (HOPWA)

HUD Entitlement Grant Funding FY1999-2000

HUD Entitlement Program FY1999 Budget (CD-24) FY2000 Budget (CD-25) Change
CDBG Grant 23,175,000 23,317,000 +142,000
CDBG Prg. Income 13,916,000 17,324,100 +3,408,100
CDBG Total 37,091,000 40,641,100 +3,550,100
HOME 6,409,000 6,920,000 +511,000
ESG 901,000 827,000 -74,000
HOPWA 3,294,180 3,724,000 +429,820
Total 47,695,180 52,112,100 +4,416,920
  • In FY2000 the CDBG budget increased by about $3.5 million to $40.6 million an increase of 9.5 percent. The nearly $41 million CDBG budget consists of $23.5 million in FY2000 entitlement grant monies and an additional estimated $17.3 million in CDBG program income funds.
  • The HOME program increased by about $500,000 to $6.9 million an increase of 8 percent.
  • The ESG program decreased by $74,000 to $827,000 a reduction of about 8 percent.
  • The HOPWA program increased by $235,600 to $3.7 million — an increase of 7 percent. This program is administered by the Department of Health and is not included in DHCD's gross budget.

The Department will have available from the three entitlement programs in the federal component of its budget (CDBG, HOME, and ESG) a combined total of $48.4 million — which will be divided into five initiative funds. Some highlights of the activities included in the Action Plan for FY2000 are the following.

  • The Home Ownership Opportunity Fund will be $7.6 million. This fund will:
    • Assist 372 first time homebuyers to become homeowners (Home Purchase Assistance and Homestead Programs)
    • Return 155 blighted housing units to the city's tax roles (Homestead Program)
  • The Neighborhood Housing Preservation Fund will be $4;8 million. This fund will:
    • Rehabilitate 451 single- and multiple-family housing units (Single and Multi-family Residential Rehabilitation Programs)
    • Provide nearly $1 million to the Housing Production Trust Fund, which generates affordable housing throughout the city (CDBG and HOME funds)
  • The Community Development Opportunity Fund will be $15 million. This fund will:
    • Provide $11.3 million to the Construction Assistance Program to support new construction for multi-family and community projects and improvement efforts for the District's major gateways
  • The Community Support Service Fund will be $7 million. This fund will:
    • Provide approximately $5.8 million to local Community Based Organizations and Community Development Corporations in support of Departmental community outreach and developmental efforts Counsel over 6,000 District residents, under contract with CBOs, on issues such as home purchase, home maintenance assistance, and fair housing enforcement Acquire 100,000 square feet of abandoned commercial property for rehabilitation in deteriorated neighborhood retail strips under contracts with nonprofit developers through a neighborhood reclamation program. This program existed in previous years as the Neighborhood Initiatives Support Program (NISP) Equity Grant Fund
  • The Planning and Administration Fund will be $6.3 million. This fund will:
    • Provide for environmental and program development studies and the general administration (including administrative staff and overhead costs) of the Department's federal programs.

These and other activities of the Department planned for FY2000 will help advance DHCD's mission to improve the quality of life for District residents.

[Capital Budget]

The FY2000 Capital Budget request is $3 million to support two ongoing capital projects.

  • Fort Lincoln Utility: $1 million will be used to complete the major utility installation at Fort Lincoln.
  • Affordable Housing Infrastructure: $2 million will be used to provide public infrastructure improvements to support new construction of housing and economic development activities in neighborhoods.

[FY2000 Budget Enhancements]

In addition to its Baseline Budget, DHCD is requesting Budget Enhancements for FY2000.

  • $5.5 million from local appropriations, and
  • $10 million from the Capital Budget

[Local Appropriation Enhancements]

The $5.5 million in enhanced local appropriations will be used to invest in our neighborhoods, making them more attractive, with quality affordable housing and convenient shopping. The funds will be used to enhance two Departmental programs.

  • Home Purchase Assistance Program (HPAP) $3.5 million will create 233 middle-income homeowners at an average cost of $15,000 per family, and will generate an estimated $1.7 million in annual property and sales taxes.
  • Homestead Housing Preservation Program $2 million will reclaim 200 tax delinquent, vacant, and boarded up nuisance properties across the city.

It should be noted that DHCD's current appropriated budget is 80 percent less than it was in FY1996, when it was $16.7 million (compared with the currently proposed $3 million). The reduction of these funds has lowered the Department's ability to make affordable housing available to working families. DHCD no longer has millions of dollars of uncommitted funds in its coffers.

[Capital Budget Enhancements]

The $10 million requested in Capital Budget enhancements will also be used to fund infrastructure and streetscape improvements in neighborhood corridors, as well as help fund several housing and economic development projects located throughout the city. Some of the developments include:

  • Fort Stanton Housing Development (Ward 7)
  • Camp Simms (Ward 8)
  • Minnesota Avenue/Benning Road (Ward 7)
  • McMillan Reservoir Site (Ward 5)
  • H Street, NE (Ward 6)
  • Southwest Waterfront (Ward 2)
  • Georgia Avenue (Wards 1 and 4)

[Status of Quick Hits Projects]

Now, I am going to spend a few minutes to discuss the most salient projects the Department is currently involved in.

[Sell 100 Boarded-up Buildings in 180 days]

HUD has agreed to transfer the vacant scattered site single-family houses to the city. We are working through the details of the transfer, which will allow us to sell them directly to first time homebuyers in the city, through the Homestead Housing Preservation Program.

In addition to the 100 houses to be sold through the Homestead Program, another 78 vacant, Scattered Site single-family houses have been awarded to The Homeownership Group ("THG"). THG is comprised of 8 nonprofit developers who will rehabilitate the houses and sell them. DHCD is providing rehabilitation financing, and permanent financing will be obtained at a low interest rate from Fannie Mae.

[Implement Facade Program]

DHCD is providing over $1 million of assistance to implement three (3) facade/streetscape improvement programs located in:

  1. Georgia Avenue, N.W. -- streetscape
  2. H Street, N.E. - facade, and
  3. Mount Pleasant Street, N.W. -- facade and streetscape

They are all planned to spark commercial revitalization in existing neighborhood retail areas which need sprucing up to attract more customers. These improvements are being implemented in the next 12 months.

[Improve Select Gateway Now]

The Agency is working with private owners and developers to brighten up gateway areas on Georgia Avenue at Silver Spring and New York Avenue, N.E. at North Capitol Street, N.E..

At the New York Avenue gateway to downtown, the demolition of blighted building has already started and beautification improvements in the public interest will be installed while the site is assembled and plans are completed for major redevelopment.

[Develop Three Recreation Centers]

DHCD is providing substantial financial assistance to leverage the development and revitalization of

  1. The ARC at Alabama Ave., S.E..
  2. The Wish List Tennis Center at Alabama Ave., S.E., and
  3. The Banneker Playfields in lower Georgia Ave., N. W.

All these centers are receiving significant funding assistance to accelerate their fundraising and implementation of their areawide recreational offerings, which will ultimately complement the many homeownership initiatives being promoted by the City.

[Develop Site for Tour Buses]

Thus far, 12 offering packages have been picked up for the temporary Tour Bus facility. The proposals are due April 5th. The RLA Board will select a developer/operator for the site at its meeting on April 1 5th, and at its meeting on May 5th the RLA Board will hold a public hearing on the lot's temporary disposition. The site is scheduled to open for tour bus parking on May 1 5th.

[Relieve Backlog of Home Improvement Loans/Grants in 6 Months]

The Department has a goal of eliminating a backlog of at least 55 home improvement applications (i.e., roofs, single-family rehabs, and handicapped accessibility). We are on target with meeting that goal, having already completed half that number.

[Task Force Process]

DHCD had a kick-off event for the Round 2 Task Force on January 22 The response was so overwhelming that we had to hold two sessions to accommodate the almost 600 people who attended. The Department received 176 applications on February 12, of which 123 are being submitted to the expert panel for evaluation. Thirty-one of these proposals will be presented at the session on April 10th at Gallaudet University.

[Major Development Projects]

[Columbia Heights]

On March 1, 1999, DHCD received four proposals for development of sites abutting the Columbia Heights Metrorail Station, which is scheduled to open in September 1999. Proposed developments include a grocery store, multiplex theaters, single-family sales housing, a nine story, 432,000 square foot office building, specialty and '`big box" retailers, restaurants, a health/fitness center, and various recreational uses totaling in excess of 1 million square feet.

Interviews with prospective developers will be held tomorrow, April. 1st and developer selection will be completed by the end of April 1999.

Community involvement in both the development of the offering document and the review of proposals has been extensive, and has become a benchmark for all large tract projects in the city.

Construction of a Rite Aid drug store at 14th and Irving Streets will begin in June 1999.


Request-for-Offers for the sale of the Roosevelt will be issued on April 9, 1999. Interested parties have 60 days to submit an offer, and a contract of sale will be offered to the best and highest offeror 30 days thereafter. The tenants are also being offered the opportunity to purchase the property, and have a first right of refusal to match the selected offer. Sale of the Roosevelt and start of rehabilitation will occur before the end of the year.

[McMillan Reservoir]

The McMillan Reservoir site is a 25 acre, former sand filter water plant that the City acquired from the federal government in 1986 for planned and controlled development. The site is an historic landmark. To ensure the participation of community residents, DHCD is in the process of organizing and planning a charrette for the first week in June. Currently the Department is holding planning meetings with ANC 5C, community organizations, Catholic, Trinity, and Howard universities, Children's Hospital, Washington Hospital Center, and the Corps of Engineers. Project milestones include advertising the development RFP in October 1999, selecting a developer by April 2000, and ground breaking by spring 2001.

[Neighborhood Grocery Store Restoration Projects]

DHCD is marketing and negotiating six potential sites for supermarkets, across the city. Safeway is reviewing its options for updating its presence on Georgia Avenue; Shoppers Food Warehouse is negotiating a site at Fort Lincoln; several such bids are being entertained at the Columbia Heights Station on 14th Street, NW; two potential sites are being considered along the North Capitol Street corridor, at the McMillan Reservoir, and at the fringe parking lot at Michigan Avenue and Irving Street, NE; and several sites have been recommended east of the river, including Skyland and Camp Simms.

[Joint DHCD/Public Housing Initiatives]

Recently, there have been several joint DHCD/Public Housing community development initiatives where DHCD has provided commitment of federal CDBG and/or HOME funds to support major revitalization efforts, especially where homeownership opportunities are being created on former public housing developments. These sites include Frederick Douglass, Stanton Dwellings, Valley Green, Montana Terrace, and Fort Dupont. Additionally, we will provide assistance to Washington Interfaith Network (WIN) to provide homeownership opportunities to very low income families.

[Major Housing and Commercial Development Initiatives]

I want to give a brief update on some major developments assisted by the Department which will produce 681 housing units.

  • Old Children's Hospital Site
  • South Capitol Street Shopping Center
  • Thurgood Marshall Center
  • Union Wesley Housing Project
  • Douglas Townhomes
  • Oxon Creek Townhomes
  • Access Housing
  • Chaplin Woods Townhomes
  • Washington Partners in Homeownership
  • Upshur House
  • Parcel 76, S.W.
  • Georgia Avenue and Rittenhouse Development
  • The Old Children's Hospital site project is an all-residential development consisting of a mixture of market rate fee-simple townhouses and stacked condominium townhouse apartments. The developer's total unit count is 140 units, with 48 condos and 92 fee simple townhouses. The site plan is organized with four clusters of townhouses around parking structures. Construction is tentatively scheduled to start at the end of July 1999.
  • The South Capitol Street Shopping Center rehab project will renovate the Center with a new facade, improved lighting, and additional parking spaces. When completed it will have 23,000 square feet of office space and 25,000 square feet of retail space. Construction is expected to be completed by the end of summer 1999.
  • The Thurgood Marshall Center project involves rehabilitation of the historic Anthony Bowen YMCA into office space for nonprofit social service providers. Construction has begun and is expected to be completed within 12 months.
  • The Union Wesley Housing Project will construct 127 senior citizen apartments at Fort Lincoln New Town. Site clearance was started last fall and construction is expected to begin this summer and be completed in 15 months.
  • The Douglas Townhomes project involves the construction of 10 townhomes in northeast D.C. At least six of the units are expected to be completed by September 1999.
  • The Oxon Creek Townhomes development is located east of the river and entails the production of 210 new townhomes for low- and moderate-income homebuyers. Ten model homes are currently under construction, with a completion date of June 1999. Completion of the total project is expected within 4 years.
  • Access Housing is an east of the river veteran's service center, which will contain 20 single room occupancy units. The project is currently under construction and is expected to be ready by summer 1999.
  • The Chaplin Woods Townhomes development will provide 22 townhomes for low- and moderate-income families. It is expected to be completed by May 2000.
  • The Washington Partners in Homeownership was created with the support of DHCD in July 1998, with the mission to increase the rate of homeownership in the District by 1,000 new home buyers per year for two years. The Partnership consists of 75 organizations and individuals representing nonprofit, for-profit, housing counseling, and housing inspection organizations, as well as foundations, and real estate professionals.
  • Upshur House, a senior citizen's home, contains 45 units, plus a convenience store and-complementary services on site. It is located at 13th and Upshur Streets, NW and is expected to be completed by May 1999. This is the third of three senior housing developments we have produced at this site.
  • Parcel 76, S.W., is a market rate townhouse development with 93 units.
  • The Georgia Avenue and Rittenhouse Street development was acquired by the Department through the Homestead Housing Preservation Program, which boarded up the property, closed the liquor store, and sold the complex to the Rittenhouse Joint Venture. Rehabilitation will begin in June and will produce 17 duplex housing units — all of which have been pre-sold — and there will be commercial space on the ground floor.


[Westbank Waterfront]

DHCD is providing $275,000 in grant funds to Manna Inc., a citywide nonprofit community development organization, to prepare a development strategy for the Westbank Waterfront area west and north of the Anacostia and Potomac Rivers. Manna will engage in extensive community outreach and will hire architects, planners, and economists to identify economic development, community development, and affordable housing opportunities on key sites, as well as necessary public space and infrastructure improvement.

[East of the River Comprehensive Planning and Implementation Strategy]

Phase I of the East of the River Study involved four major commercial sites: Skyland Shopping Center, Anacostia Gateway, Anacostia Metro Station Area, and Benning Road/Minnesota Avenue Metro Station Area.

Recommendations and schematics for Phase I will be submitted to the city in mid-April. The next phase involves lower Martin L. King, Jr. Avenue, Congress Heights, Lincoln Heights, Central Northeast, Benning Heights, and Hillcrest.

[Georgia Avenue]

The Department sponsored a recently completed market study of the entire Georgia Avenue corridor with recommended plans for implementation. A comprehensive revitalization strategy is being developed in conjunction with recommendations from other sources such as the Fannie Mae-sponsored Howard University-LeDroit Park Revitalization initiative and the Gateway-Georgia Avenue Revitalization Corporation, whose focus is in and around the Gateway at Silver Spring.

[Feasibility Study for the Construction of a Metro Station at New York Avenue]

The New York Avenue Metro Station Study is completed and the final report will be submitted mid-April. The study recommends the construction of the metro station just south of New York Avenue near 1st and M Streets, NE. Preliminary construction costs are estimated at $54 million, with approximately $25 million of this cost to be provided by landowners at the site via a special assessment. The station is projected to open in the year 2004. A presentation on the results of the study was held March 22, 1999 at Gallaudet University.

[State of Management Reforms]

The Financial Authority approved 16 management reform initiatives. Of the 16 initiatives, twelve are completed. The remaining four reform initiatives include:

  • Two technology initiatives which cannot be completed until we move into our new office,
  • The re-engineering of program procedures to reduce processing time, and
  • The sale of the loan portfolio.

The four reform initiatives are scheduled to be completed this spring.

As a result of management reform, DHCD spearheaded the development of the citywide economic development strategy and is currently providing staff coordination to ensure its implementation. In addition, the Department is developing its own management performance strategy for FY2000 based on a realigned organization. The Department's management strategy will include streamlined programs, regular customer service surveys, and an integrated project management tracking system. Further, we are developing performance standards for our community-based subrecipients.

DHCD will realize an annual cost savings of $1.7 million from the streamlining of staff and other changes. These savings will be used to fund neighborhood revitalization efforts.


Let me conclude my remarks by stating that this is a good time for the housing market in DC. The city is currently experiencing a housing boom, with the tightest housing market in 20 years. We are at a point where we very badly need new housing products. One indication of this is the extent to which houses in new developments in the city are being pre- sold before they are even completed. DHCD is actively working with developers and bankers to help keep up with the increased demand for decent and affordable housing.

I invite all of the Councilmembers to attend two events involving our Round 2 Strategic Development Competition Process, to occur at Gallaudet University.

The first event, the Public Presentation for Round 2 of the Strategic Development Task Force Process, will take place beginning at 9 a.m. on Saturday, April 1 10th. Invitations have been sent to all Councilmembers.

And on Friday, April 23rd the Department will announce the selection of strategic area task force proposals for final funding consideration. These are the housing, community, and economic development proposals submitted for funding consideration for FY1999.

FY2000 DHCD budget pie chart

FY2000 budget by revenue type pie chart

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