The Rise at Temple Courts exemplifies the failing D.C. Housing Authority
By Jeffrey Anderson
There’s little traffic out front of The Rise Building at Temple Courts on an overcast Friday, save for an occasional polished sedan with darkened windows rolling by.
Two men, maybe in their 40s, are hanging out along the single westbound lane of L Street NW; one is leaning on the front of a parked car, the other is sitting in the driver’s seat with the door hanging open.
“You all live here?” District Dig asks, of the 6-story, gun-metal gray steel building with yellow trim around its entrance. “How are the units?”
“They ok, not as nice as the ones over there,” says one of the men, a resident of The Rise, gesturing toward the amenity-laden Banner Lane Apartments, up a landscaped grade just across the street.
The buildings make for an odd pairing:
In the lobby of The Rise, an affordable housing complex at 2 L Street NW, a uniformed security guard sits behind a small desk; at Banner Lane, a rental agent bounds forth with the enthusiasm of a hotel manager.
Banner Lane, consisting of four, privately-financed, 9-story “luxury” apartment buildings, offers a glossy folder that displays the property layout and a roadmap of nearby restaurants, shops, attractions and transportation options; its amenities include spin, cardio and fitness/weight rooms, a cabana, a hospitality lounge, a yoga studio, a promenade, and a rooftop terrace with both a “sky lounge” and a pool.
The Rise, built with public subsidies on dirt cheap city land, has a price sheet on plain white paper that details residential qualification guidelines, credit worthiness, income/employment requirements and criminal background check procedures.
The contrast is further reflected in the rents: Banner Lane’s are higher than rents at The Rise, in some instances by more than $1,500 per month.
“That’s because we’re a luxury property,” the rental agent boasts.
This neighborhood, known as Sursum Corda, was supposed to be redeveloped by now. Yet a block away from The Rise, abandoned satellite dishes and obsolete power cables hang from the last boarded-up, two- and three-story townhouses on the former site of the Turnkey residences.
A weathered sign hovers over graffiti-tagged courtyards and announces you are “Now Entering A Weed and Seed Community,” referring to Operation Weed and Seed, a George W. Bush-era initiative to counter street-level drug trafficking with community restoration and development.
Former residents of the various dwellings that once made up a community might say that they are the ones who got weeded out, and that the city seeded the land for private mixed-use and mixed-income development.
At a glance, there is no cohesion to this neighborhood–no plan as it were– with subsidized housing like The Rise in the shadow of the luxury Banner Lane, both complexes surrounded by boarded up townhouses, empty parcels of land, under-used parking lots, and holes in the ground waiting for what is supposed to be replacement housing for extremely low-income residents who were displaced more than a decade ago.
But instead of hope or promise that a greater community could take root anytime soon, a couple blocks to the north, along First Place NW, behind remnants of the Sursum Corda Cooperative Apartments, small groups of men linger each day amidst the blight, standing around, sitting on camping chairs and upturned buckets, and smoking weed.
Third-term Mayor Muriel Bowser has poured hundreds of millions of dollars into affordable housing, yet somehow multiple neighborhoods throughout the city tell a similar story: A leveraging of vast acreage of city-owned land for the private, subsidized development of not-so-affordable buildings, amid parcels of undeveloped lots and blighted tear-downs that thousands of Washingtonians once called home.
The Rise is but one example of how patronage, opportunism and neglect has led to a politically-rigged system of land giveaways and wasted taxpayer money; and how a corrupt public housing voucher system has created conditions ripe for low-level rent scams at the D.C. Housing Authority.
Yet to hear Bowser and her people tell it, The Rise and its surrounding environs are delivering on promises of stable, affordable living conditions from which long-gone communities will re-emerge and thrive one day.
That is, unless subsidized housing gets marred by poor planning decisions that are gentrifying away a city’s problems.
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The Rise is part of Northwest One, one of four developments under the New Communities Initiative, a 2005 program to tear down and replace public housing units with mixed-income housing options that offer first right of return to former residents of Temple Courts, a 520-resident housing complex the city demolished in 2008.
At a December ribbon-cutting, Bowser hailed The Rise, 220 residential units–including 65 replacement units for displaced residents who want to return–as the first phase of the Northwest One community, calling it “the site that ignited the New Communities Initiative.”
Former Deputy Mayor for Planning and Economic Development John Falcicchio–who resigned recently in the face of sexual harassment allegations–praised his boss for “delivering on the promises of the past,” by redeveloping and revitalizing distressed public housing communities and bringing former residents back to be part of “vibrant, mixed-income communities.”
DCHA Executive Director Brenda Donald then praised Falcicchio’s office for helping DCHA to be “an integral component of the affordable housing ecosystem in the District,” and boasted of her office’s creation of “right-to-return” replacement housing units for residents who had spent years on an affordable housing waiting list.
But despite the hubris of Bowser and company, the truth is, as a matter of cost to the taxpayer and return on investment, The Rise was tainted from its inception and remains so today.
Back in June 2020, before a single shovel had gone into the ground at 2 L Street, The Dig wrote in detail about the Bowser administration’s award to Mid-Atlantic Realty Partners to develop the property.
As a New Communities project, The Rise qualified for a special tax credit program subsidized through DCHA’s Housing Choice Voucher Program, using funds allocated from the city’s Housing Production Trust Fund.
The previous month, DCHA’s Board of Commissioners had approved a 15-year contract that included $34 million for project-based vouchers to MRP and its partner, David Jannarone.
Project-based vouchers, or PBVs, apply to specific units for the benefit of low-income families; they also are considered to be the most valuable subsidy from a developer perspective, because they get paid up front for the full 15 years.
There was a key condition, however:
The Request for Proposal had specified that bidders were supposed to demonstrate they had exhausted other sources of public subsidies before applying for PBVs.
And while more than 30 other qualified bidders had applied for other subsidies, the MRP-Jannarone team had not; Yet it still emerged as the winner of an award from DCHA.
Approval of the $34 million contract also was dubious in that MRP prevailed over those other bidders to build just one project, a little more than a year after DCHA had awarded a $41 million contract for developers of nine separate projects.
The disparate return on investment made no sense.
“Why was there only one project awarded in this solicitation, since there were 33 projects that qualified through the initial screening process?” asked former Vice-Commissioner Bill Slover at the Board’s meeting on May 13, 2020.
Slover also had concerns with the imbalance in the value of the PBVs that DCHA was awarding:
The $41 million contract DCHA awarded in 2019, he noted, produced 146 vouchers in a 1,031-unit building; the $34 million contract to develop The Rise would produce 65 vouchers in a 220-unit building.
Slover did some back-of-the-napkin math and concluded that for $7 million less, DCHA was willing to settle for less than half the number of vouchers for the lowest earning residents and less than a quarter number of total units–for just one project as opposed to nine.
MRP and Jannarone–who, along with Falcicchio, an ex-officio member of the Board at the time, is one of Bowser’s closest friends and confidantes—benefited from another anomaly that had caught Slover’s attention:
The Board had approved the previous PBVs in February 2020, but three months later, it was being asked to vote on the latest PBVs for The Rise, not only resulting in less bang for the buck but on a quick turnaround, no less.
To Slover, it looked as if Bowser’s people were in a hurry to consummate a sweetheart deal, with DCHA paying 80 percent of what it had spent the previous year for roughly 20 percent of the deeply affordable housing units.
He voted “No,” though the award passed easily, with Falcicchio and former Chairman of the Board Neil Albert– who later resigned in a contracting scandal– leading the “Yes” votes.
***
The Rise is marred in a more systemic manner as well–one that the Bowser administration has yet to fully account for.
A recent exposé by Steve Thompson and Dalton Bennett of The Washington Post showed that DCHA has been overpaying landlords throughout the city by millions of dollars per year through its voucher program, because officials do not verify whether the voucher caps developers are requesting are reasonable in relation to median market rents, as local and federal regulations require.
Above-market rate rents reduce the number of voucher holders DCHA helps, the Post reported, provide incentives for landlords to rent to public housing voucher holders without the obligation to provide social services, and further drive up rents in surrounding neighborhoods.
Essentially, landlords have learned to pad their financial return through the use of vouchers, and DCHA has, until recently, enabled them.
According to the Post, DCHA started approving rent vouchers up to 180 percent of median market rate in 2009. HUD’s Housing Choice Voucher Program Guidebook says this wastes government funds, squanders limited housing subsidies, and allows building owners to inflate rents for those who do not qualify for assistance.
After reviewing 4,000 leases, the reporters found that DCHA was paying more than $1 million a month over median market rates in the neighborhoods it studied.
After first rejecting the story’s findings, Donald acknowledged that DCHA issues vouchers that have no basis in market rates, and said that the agency would stop paying above-market rents for low-income voucher holders.
In an email, DCHA’s Chief Operating Officer Rachel Molly Joseph said the prior administration had not updated rent payment standards on a unit-by-unit analysis, and indicated that the agency was conducting a “rent reasonableness” study.
“We are working with our consultants to create a plan to ensure that we have an accurate market rent study and are implementing rent reasonableness on a unit-by-unit basis,” Joseph wrote.
“Therefore we have work to do to ensure we responsibly fix our voucher/subsidy payment system.”
That course correction, however, comes too late for The Rise, where a 1-bedroom apartment rents for $1,480 per month for households that earn less than 60 percent of the Area Median Income, or AMI, according to a price sheet in the lobby.
“That’s with a housing voucher?” The Dig asks the guys in front of the building on L Street. “Shee-it, if you can get one,” says the one leaning on the car.
Contrast that with a fair market rent of $1,615 per month for a 1-bedroom apartment, according to the “Rent & Income Limit Calculator” run by Novogradac & Co., a financial consulting company that specializes in affordable housing and community development.
But if DCHA subsidizes the rent through its voucher program, the rent jumps to $2,467 per month for a 1-bedroom apartment, according to internal data obtained by The Dig.
Based on a review of the price sheet for The Rise, data compiled by Novogradac, and internal DCHA data, The Dig found a significant imbalance where vouchers are concerned.
According to the price sheet, monthly rents for such households are lower than what Novogradac calculates: $1,377 for a studio apartment; $1,480 for a 1-bedroom apartment; $1,763 for a 2-bedroom apartment; $2,031 for a 3-bedroom unit; and $2,078 for a 4-bedroom unit.
Fair market rent on a monthly basis for those same units, according to Novogradac, are:
Studio apartment, $1,539
1-bedroom, $1,615
2-bedrooms, $1,838
3-bedrooms, $2,299
4-bedrooms, $2,742
Monthly rents for voucher holders, per data obtained from DCHA, are:
Studio apartment, $2,397
1-bedroom, $2,467
2-bedrooms, $2,789
3-bedrooms, $3,668
4-bedrooms, $4,477
Joseph once again pointed to the prior administration, and said Donald’s predecessor was responsible for establishing the value of project-based vouchers. She noted that MRP is discounting the rent for households that earn less than 60 percent AMI “in order to incentivize creation of affordable housing for a mixed-income population.”
But by any measure, based on the blend of units and household incomes at The Rise, and factoring in the inflated vouchers, MRP rakes in hundreds of thousands of dollars per year in additional profit over the 15-year contract–all at taxpayer expense.
Neither the Bowser administration nor MRP responded to questions from The Dig.
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Lack of timely neighborhood planning, a gratuitous land deal and inflationary voucher practices are troubling enough, but The Rise also has proven ripe for allegations of low-level fraud by DCHA employees.
In January, based on a tip received in December, DCHA’s independent auditor conducted an internal investigation and alleged that a “relocation specialist” had committed voucher fraud by approving childhood friends even though they were ineligible as prospective recipients, and “assigned them contracted housing units ahead of potentially qualified tenants.”
That report languished for 40 days, until repeated inquiries from The Dig prompted D.C. Inspector General Daniel Lucas, whose agency reportedly is conducting multiple investigations of DCHA, informed Donald on a Saturday evening in February that he was unaware any such report existed.
Lucas demanded that Donald release the report, and she complied. She also provided a redacted version of the report to At-Large Councilmember Robert White, who chairs the Council’s Committee on Housing.
The report determined that the DCHA employee in question used key fobs to access tenant residences for personal use, approved ineligible personal friends for vouchers, and failed to complete inspections prior to move-in.
The employee also allegedly gave preferential treatment to two ineligible tenants and used vacant units for personal reasons, the report states.
In addition, circumstantial evidence pointed to 53 out of the 65 voucher holders DCHA placed in The Rise who bypassed the voucher screening process. It remains unclear whether DCHA will have to pay back any federal dollars to the Department of Housing and Urban Development that were improperly used to pay for invalid vouchers.
And because of the inflated rent scale, occupants of those 65 units at The Rise are living in units that cost between $850 and $1,700 more per month than fair market rents, according to information obtained by The Dig.
Donald fired the alleged culprit, and so far no additional investigations or findings have come to light. In an email, Joseph denied that she and Donald sat on the report and characterized it as a “personnel matter,” claiming they referred the matter to the internal auditor “as soon as the concerns were brought to our attention.”
“DCHA has shared all relevant information with [the D.C. Office of the Inspector General] to let them decide what warrants their review,” she wrote in an email. “DCHA is cooperating with all next steps from [that office.]”
Lucas’s office has not responded to requests for information about the status of any investigations into DCHA.
***
On a hazy, muggy, Thursday in April, The Dig returned to the neighborhood where The Rise, Banner Lane and the remains of Sursum Corda co-exist in a dismal state of asymmetry.
Though 65 voucher recipients now have an affordable place to live, there are reminders of how long this neighborhood has gone without comprehensive or timely redevelopment–and how low it had sunk before anything was completed at all.
A block south, at the corner of North Capitol and K Street NW, a one-man homeless encampment is adorned with a sign warning passersby that there’s a rat infestation problem in the area; a half block west on K Street two Asian woman squat in the weeds near where they have made their own camp; jugs of water and loaves of white bread peek out from under a tarp.
On First Terrace NW, adjacent to a mostly-empty parking lot behind what’s left of the boarded up Turnkey Apartments, two women linger at a dead end next to their colorful home-cleaning vans, chatting with a gentleman with a wary eye and a tricked-out car. They decline to give their names.
The Dig presents a business card and engages in a brief conversation, during which these three express disdain for how city planning has displaced some and driven up rents for others.
Asked about the District government’s approach to development in general, the man scoffs, “The city is what the city do.”
If there’s any truth to that, this neighborhood does not speak well of the District: Up on L Street, across the street from The Rise– which has a large “For Lease” sign– paramedics are attending to a man laid out on the steps of Mt. Airy Baptist Church. A bag full of Chick-fil-A wrappers lies in the gutter.
Just steps away, groundskeepers are landscaping the plush, sloped grounds of the Banner Lane apartments; a Capital Bikeshare station out front is stocked with rentals.
It’s ironic that Banner Lane rises up and looks down upon a complex named The Rise. And it’s sad to see both of them surrounded by blighted conditions that lend themselves to loitering and perhaps worse.
It’s also hard to imagine just where all the displaced former residents of these long-ago demolished communities went, and to wonder what it might take for them to return in any significant numbers to housing they can afford, in a place they can re-make into a community.
Given D.C.’s performance to date, it’s just as difficult to envision when –or if– that day will ever come.
