Testimony of the Center for Social Housing and Public Investment before the District of Columbia

Testimony of The Center for Social Housing and Public Investment, Inc. – Deputy Mayor for Economic Development Oversight Hearing, 2.20.26

Good afternoon, Chairperson and members of the Committee.

My name is Will Merrifield, and I am Director of the Center for Social Housing and Public Investment, Inc.. Thank you for the opportunity to testify today.

I am here to make a straightforward argument: the private real estate industry, operating under its current incentives, is structurally incapable of solving the District’s affordable housing crisis. If we are serious about delivering housing that working-class residents can afford, government agencies—particularly the Deputy Mayor for Planning and Economic Development—must play a far more direct and strategic role in housing production, ownership, and financing.

For decades, the District has relied primarily on a market-led model. We provide subsidies, tax abatements, density bonuses, publicly owned land at reduced cost, and low-interest financing. In exchange, we receive a limited number of income-restricted units—typically affordable at 60% or 80% of Area Median Income.

This model has produced some units, yes—but it has not produced affordability at scale, and it has not stemmed displacement. That is not because individual developers are uniquely malicious. It is because they are operating exactly as the system requires them to operate: to maximize return on investment.

Private equity, real estate investment trusts, and even mission-oriented developers all face the same constraint. Their projects must generate sufficient revenue to cover high land costs, construction costs, financing costs, and investor returns. When those costs rise—as they have significantly over the past five years—the rents must rise as well. No amount of goodwill can overcome a financial model that depends on high rents and asset inflation to make the numbers work.

Meanwhile, public need continues to grow. Rent-burdened households are not concentrated at 80% of AMI. They are concentrated at 30%, 40%, and 50% of AMI. Yet we continue to structure our production programs around what the private market can tolerate rather than what residents can afford.

This is why the District must expand its capacity for social housing—permanently affordable, publicly owned or publicly controlled housing that is not driven by speculative return. Social housing is not simply “subsidized private housing.” It is housing where the public retains an ownership stake, where rents are set based on cost rather than profit, and where affordability is preserved permanently.

DMPED, in particular, has a powerful but underutilized tool: public land. When the District owns the land and retains ownership, it can dramatically reduce development costs. If that land is paired with low-cost public financing—rather than conventional high-interest private debt—the economics shift significantly.

Over time, a revolving public housing production fund could be built. Construction financing could be refinanced with long-term, low-cost public debt once projects stabilize. Rental income would cover operations, maintenance, and debt service, while surpluses could be recycled into new projects. This model does not eliminate the need for subsidy, especially for extremely low-income households—but it stretches public dollars further and builds public assets rather than transferring value to private investors.

Importantly, this approach also reduces long-term fiscal pressure. Instead of paying ever-increasing vouchers to private landlords, the District would be investing in assets that generate stable, predictable revenue while delivering permanent affordability.

There are precedents for this model. Montgomery County has begun taking ownership stakes in mixed-income housing. Internationally, cities like Vienna have demonstrated that large-scale social housing can stabilize rents across an entire metropolitan region. The District has the financial capacity, and the land assets, to build something similar here—if we choose to.

The alternative is clear. If we continue to rely primarily on private capital, we will continue to produce too few deeply affordable units at too high a public cost, while market-rate development continues to push rents upward. We will remain reactive rather than proactive—plugging holes rather than building a durable system.

The affordable housing crisis is not simply a supply problem. It is a structural problem rooted in how housing is financed, owned, and valued. Treating housing solely as a commodity will continue to produce commodified outcomes.

The District can lead the nation by demonstrating that housing is infrastructure. Like schools, libraries, and transit, it is a public good that requires long-term public investment and stewardship.

I urge this Committee to push DMPED beyond a facilitation role and toward a direct development and ownership role. Expand public land disposition for social housing. Capitalize a revolving production fund. Use the District’s borrowing power strategically. And measure success not simply by unit counts, but by permanent affordability and long-term public return.

We cannot subsidize our way out of a system designed to inflate rents. But we can build a new model—one that aligns public investment with public need.

Thank you for your time, and I welcome any questions.