Proposed Rental Housing Supports in the 2027 DC Budget

If enacted, the budget would invest tens of millions of dollars to preserve housing vouchers at risk of elimination, create new pathways for tenants to build their credit through on-time rent payments, incentivize the construction of affordable workforce housing, and strengthen the safety net for residents facing housing instability. These provisions are a response to worsening affordability challenges: homelessness has risen 4% since 2025 to affect more than 5,300 individuals, average rents have climbed more than 5% since 2019, and the District faces the potential loss of thousands of housing vouchers due to funding gaps and federal reductions.

The budget’s proposed investment of approximately $28.2 million in fiscal year 2027 and $142.7 million over four years would prevent the loss of housing vouchers and add new ones. Housing vouchers are government subsidies that help low-income residents pay rent. Without this funding, the District risked permanently losing up to 1,020 vouchers, leaving as many as 700 current households unable to pay rent and eliminating 320 vouchers that would otherwise be reissued to new families. The budget would fund 277 additional vouchers through the US Department of Health and Human Services (HHS), which would include 100 Targeted Affordable Housing family vouchers, 45 DC Flex family vouchers, 45 Permanent Supportive Housing family vouchers, and192 turnover vouchers through the DC Housing Authority. Turnover vouchers are those that become available when a participant leaves the program and can be reissued to a new household. The 2027 DC budget would also require HHS to refer 26 families from the Rapid Re-Housing program to the Housing Authority to receive new Local Rent Supplement Program vouchers, and to match 190 additional families to a combination of permanent supportive housing, targeted affordable housing, and flexible rent subsidies. To prevent vouchers from being lost through administrative delay, the budget would require any vacated voucher to be reissued within 60 days. 

To help tenants build their credit through the rent they already pay, the 2027 DC budget would also authorize a Rent Payment Reporting Program, managed by the Department of Housing and Community Development, under which landlords would report a tenant’s on-time rent payments to consumer credit bureaus. Tenant participation would be entirely voluntary, and tenants must authorize reporting and may withdraw at any time. Conversely, landlords receiving any financial assistance from the District could be required, as a condition of that assistance, to participate. The budget sets aside $500,000 per year in recurring funding for the program, which would include grants available to landlords to cover costs associated with the program. 

Several new tax incentive programs would spur construction and preservation of affordable rental housing. The Workforce Housing Opportunity Tax Abatement would reduce property taxes for residential developments which consist of at least 40 units in which at least 20% of units are affordable at 80% of median family income and at least 20% are affordable between 80% and 100% of median family income. Total abatements under this program would be capped at $4 million in fiscal year 2029, rising to $6 million by fiscal year 2031 and growing 5% annually thereafter. Additional abatements would be available for developments on former federal properties and near Metro stations, each requiring that at least 10% of units be affordable at 60% of median income and an additional 10% at 80%. The Downtown Building Conversion program, which encourages conversion of vacant office buildings into housing, would be streamlined by broadening the definition of “bedroom” and easing certain permitting requirements. 

The Housing Production Trust Fund, the District’s primary tool for financing affordable housing, would see important changes. The 2027 DC budget would require that at least 50% of units in newly funded construction projects serve extremely low-income households and at least 40% serve very low-income households, measured by units rather than dollars spent. In fiscal year 2027, the Mayor would be required to dedicate 15% of the fund specifically to preserving existing affordable rental housing, with preference for projects that have previously received fund commitments. Expanded annual reporting would provide the public with detailed breakdowns of affordability levels in both new construction and preservation projects. A separate provision would clarify the tax-exempt status of affordable housing developed by nonprofit organizations. 

The budget includes additional support for renters facing immediate crises. The Office of the Tenant Advocate would receive $199,000 for emergency housing assistance for tenants displaced by fires, floods, or government-ordered building closures. The Emergency Rental Assistance Program would be funded in fiscal year 2027, though the 2027 DC budget clarifies that this assistance is subject to the availability of funds and is not guaranteed entitlement. Bridge Housing capacity at the Aston Shelter would expand from 100 to 190 beds, and $1.5 million would restore extended transitional housing to prior-year levels. The budget also provides $3.5 million to restore funding for the Community Legal Education and Resources program, which offers legal services including representation in housing disputes. Complementary investments include $636,000 for the Housing Purchase Assistance Program, $500,000 for the ReMIT foreclosure-prevention program for seniors, and $271,000 for the Small Buildings Program, which finances repairs at eligible multi-family rental properties. The Inclusionary Zoning program, which requires certain new developments to set aside units at below-market rents, would be updated to allow qualified housing providers to self-administer portions of the program, subject to government oversight. 

Taken together, these provisions represent a broad effort to stabilize the District’s rental housing landscape amid rising costs, growing homelessness, and potential federal funding reductions. They span from large-scale voucher preservation and tax incentives for affordable construction to targeted tenant-level supports like credit-building, emergency aid, and legal services. All provisions described in this alert are contingent on final passage and enactment of the 2027 DC budget and may be subject to further amendment during the legislative process. 

The Real Estate and Government Relations groups at ArentFox Schiff will continue to monitor the Proposed Rental Housing Supports in the 2027 DC budget and publish follow-up legal alerts as updates roll out. If you would like to engage in a more detailed conversation about any of the above, please contact your ArentFox Schiff attorney or any of the authors of this alert.