Former Mayor Anthony Williams On D.C.'s Recovery Efforts, Housing Affordability
Among the many challenges D.C. leaders face as they navigate the coronavirus pandemic is the need to balance the city's budget while tax revenues are shrinking dramatically.
Few people know more about balancing D.C.'s budget than former Mayor Anthony Williams. He helped bring the city back from insolvency while serving as D.C.'s chief financial officer from 1995 to 1998, and then he continued to achieve budget surpluses throughout his two mayoral terms from 1999 to 2007.
Williams, now the CEO of the Federal City Council, was awarded last week with Urban Land Institute's Prize for Visionaries in Urban Development. With the award, ULI recognized Williams' work in revitalizing the city with new development from 14th Street and H Street to Navy Yard, his ability to achieve budget surpluses, and the work he has done with the Federal City Council, such as his work on securing dedicated funding for the Metro system.
After receiving the award, Williams spoke with Bisnow in a 30-minute Zoom interview Tuesday to discuss the lasting impact of his eight years as mayor and how he thinks the city should handle the crisis it faces today.
Williams told Bisnow the budget stability was the most important accomplishment of his administration, as it prepared D.C. to handle the current economic crisis. He also discussed how he thinks D.C. should address the housing affordability issue, including his opposition to expanded rent control, and what the pandemic could mean for the future of cities.
Below is the interview with Williams, lightly edited for length and clarity.
Bisnow: This ULI award is recognizing your leadership in revitalizing D.C. in the early 2000s. As you look back on your time as mayor, what were some of the things you did that you think have made the most impact on D.C. the way it looks today?
Williams: I think the most important foundation was establishing the faith and credit of the District, with accountability, transparency of the government and continuity of government. So that’s all about good financial management. We’ve weathered the storm now better than other cities because we had substantial surpluses built up. Well, that was a tradition that was begun in my administration with the support of everyone from the D.C. Council to the Congress to, originally, the control board.
Bisnow: I want to talk about the budget because that’s one of the challenges D.C. faces right now with revenue projections falling because of the pandemic. How would you go about handling this budget crisis right now? How do you think D.C. should manage this loss of revenue?
Williams: Well in the short term, we’ve benefited in that the stock market has performed very well. If you look at the CFO’s latest estimates we’re still doing relatively better in this fiscal year than other jurisdictions. So we’re going to actually have some funds to be applied to next year’s budget. The mayor has asked the agencies to make savings. You’ve got a reduction in projected growth for the agencies, which is going to help. And I think there are investments that we can make to keep parts of our economy to help them weather the storm. So I think there are key investments the District can make in perhaps establishing a revolving fund to help our small businesses and restaurants get through this. Key investments, savings, application of the services in the out years are just the beginning of building a solid 2021 and then a multiyear plan.
Bisnow: In terms of making investments and funding small businesses, how important is it that Congress pass another stimulus and provide more money for local governments and for businesses? Do you think D.C. could do this without Congress, or is federal help necessary?
Williams: I think without Congress, if you look at the range of scenarios that have been sketched out by the District CFO and the initial financial planning for the end of this year and looking ahead to next year, the worst scenario is an absent federal government, one in making up for the inequity of the funds we got in the original CARES Act and then without any additional federal help going forward. On a nationwide basis, I’ve heard a potential 1 to 2 million people potentially laid off by state and local governments if there isn’t that additional federal assistance. This isn’t giveaway money ... That’s why we have a federal government. That’s why they’re needed right now. The Federal Reserve is doing everything it can. It’s time for fiscal stimulus in terms of the federal government to step up.
Bisnow: And you mentioned small businesses and restaurants, a lot of people are concerned with the winter coming up and the cold weather that's going to discourage outdoor dining. We’ve seen a lot of restaurants have to close already. Do you think there are steps that can be taken to support that industry?
Williams: One is [to] help with their rent with a revolving fund. That would help with rent until we get through this, get a vaccine implemented. and get some national leadership that establishes uniform standards around science and health that we don’t have now. So if we establish those uniform standards in science and help, settle down expectations instead of all this drama every day, then began on a national basis, businesses can start planning around getting criteria with reliability and assurance. While we’re doing that and going through this period, I think that’s where efforts like the District government with a revolving fund can play a role.
Bisnow: Can you talk about the Federal City Council and what you have been doing this year as it relates to the pandemic, and what types of efforts the council is taking?
Williams: The efforts by the Federal City Council have really been to act as a convening for our business leadership, our community leadership. We’ve had a series of conversations, over 50 now, that we’re calling District Strong. They have been very helpful and impactful. So that’s No. 1.
And then focusing in on where we can be helpful to the government in laying out a recovery plan, where we can be helpful to the government in helping to bridge the digital divide. The COVID impact has been unequal, the economic impacts have been unequal, and one way that this has manifested is with the digital divide where a lot of kids don’t have access to the technology to allow them to succeed at pace with other students. So looking at the digital divide, what are the technology aspects, the training aspects, the culture aspects, getting people used to technology, the hardware, software and service aspects. Then where our employers can build on what we’ve already done in education by providing more meaningful options for our students, K-12 into college, between academic education, vocational education, and meaningful internships so they have the mentorship and the counseling they need to succeed in life after school. We’re getting more of our kids into college, and we need to get more of our kids out of college into successful careers. So that’s No. 2.
And then No. 3 is with our police foundation, looking at ways we can address all the issues, some of them prevail in D.C., around public safety. Looking at the right kind of partnership for police, mental health, social work, the right level of programming for those different departments and agencies as we’ve undertaken better training for our police forces, and looking at other changes in legislation that can ensure when worst comes to worst, if we’ve got bad apples and we’ve got the kind of legislation and regulation and labor agreements in place to ensure that there is disciplining and that there are consequences. So public safety, internships and pathways to success, and bridging the digital divide, looking at the recovery economy, those are the things we’re looking at now.
Bisnow: One of the other things I know you’ve worked on is the Metro system and achieving funding and reform. I’m interested in how you think public transit is being affected by this. Obviously, it’s a challenging time because people don’t want to crowd into Metro cars during a pandemic. How do you think Metro can navigate this crisis, and what do you think can be done to make sure we still have this service in the future?
Williams: Well I think in the short term it’s going to take continued subsidies to keep the basic system and the basic workforce in place. As we go out of this and we start rebuilding, even if there is in the medium term some reduction in commuting and traffic, Metro will still be there to meet basic commuting needs, as a basic part of our infrastructure, and you’ve got to recognize that Metro is getting people around not only for jobs, but for recreation. And very importantly, so we can make continued investments in transportation, particularly bus transportation, to get essential workers who are already at work and people who want to be connected to work. A big correlation to poverty is lack of transportation. There are others, but lack of transportation is a big correlation to poverty.
Bisnow: Another major challenge D.C. has faced in recent years is housing affordability. Do you think this pandemic has exacerbated that challenge? Do you think it’s created more inequality, more difficulty for people to afford housing in D.C.?
Williams: I think so, because it’s not really directly yet affected property prices. It may. So if prices are still up and incomes are down, the rent-to-income gap you could argue is even higher. But I think there are ways to address that without expanding rent control. I think rent control is the wrong tool to get at the right problem. I wouldn’t argue a clawback or pullback of the rent control we have right now in D.C. But I think it’d be counterproductive right now during a recession and otherwise to look at a big expansion in rent control, certainly when you’re talking about the potential impairment of property value and the loss of needed tax revenue.
Bisnow: I know there have been proposals before the D.C. Council to expand the rent control laws. Why do you think that would be a bad path to go down?
Williams: I think there are a number of different ways to get at a social good, and regulation and government dictate is one way to do it, but the problem with rent control is the benefits of rent control aren’t evenly distributed. They go to a few people who get the rent control, sometimes not even means-tested, and again you are impairing all of this property value that could otherwise be going to serving through social expenditures a broader range of people. So you compare the number of people that could be served with the status quo in scenario A, and if you broaden rent control and impair that tax stream, that revenue flow, and only a relatively few people benefit in scenario B, I’m going to go for scenario A.
Bisnow: What other steps do you think D.C. can take to address housing affordability? What would you pursue on that issue?
Williams: Well the things that the government is doing, that the mayor is doing with the support of the council, I strongly support. Certainly I support the Housing Production Trust Fund, since I got that going. We were the first administration to get it going with the property recordation tax. That’s one thing, and I certainly support that.
I think inclusionary zoning has a role, particularly the optics and the symbolism of having a mix of incomes on the site. You could argue you’re going to get more housing production off-site, but I think it’s important to have a mix of incomes on that site because it really is a concrete example of preservation of moderate housing and prevention of gentrification. It’s a great example of that. So I support that.
And lastly, what we’re doing with the Washington Housing Initiative, where we’re going out ahead of the real estate advance and the curve and intervening out there before prices go up and the cost of affordability is prohibitive, so you’re getting more bang for your buck that way. It’s easier to preserve 10 units of affordable housing than it is to wait until the wave hits and then try to get 10 units of affordable housing in this 100-unit development, well the prices have already gone up. So you’ve got to get out there before the prices rise.
Bisnow: What has the Washington Housing Initiative been doing this year? Has it been making investments?
Williams: Yeah, it’s continuing to make investments and get some of the first projects started. The Washington Housing Initiative has got two parts, there’s the investment part that is led by JBG Smith with other partners, and then there is the Washington Housing Conservancy which provides a wraparound social context and services to see that that housing is successful. So it’s both of those that make up the Washington Housing Initiative.
Bisnow: There’s been a lot of talk about what the pandemic could mean for the future of downtown areas and whether there will be a shift to the suburbs from residents and companies who don’t want to be in as dense of an area. Is that something that you are concerned about or something you think is likely?
Williams: I think in the short to medium term, that’s a danger because we’ve talked to analysts and scholars who have studied this, like Ed Glaeser, a professor at Harvard, and other people. In the short to medium term, you’re seeing some companies make decisions that are going to reduce commuting and the appetite for working in the city and sensitivity to density. But in the long run, especially if we get through this smartly and start putting the right protocols in place and get a vaccine widely distributed, I look at cities all the way back to Cairo through Athens, Paris, London, Beijing, ancient cities. The gravity of cities is eternal. So in the long run, people are going to want to live and work in cities. This is over changes in technology, wars, sieges, plagues.
Bisnow: When it comes to development in D.C., one neighborhood where your administration had a big impact was in Southeast, the Capitol Riverfront area, you helped bring Nationals Park down there and that has become one of the fastest-developing neighborhoods in D.C. over the last decade. What do you think of the changes that have happened there? Do you think it’s all been positive or are there any challenges?
Williams: Well the challenges that we’re facing broadly from COVID is a challenge certainly. If we aren’t able to make the continued investments in the cleanup of the Anacostia River, I think that could impair development. I mean, who wants to live next to a dirty river? I think right now people expect the river to get cleaner. It is getting cleaner but we’ve got to continue that effort. And then I think efforts like our bridges across the river and the 11th Street bridge are critical in connecting, because the original Anacostia riverfront vision was the entire waterfront, all the different quarters of the city meeting in rejuvenation of the river, environmentally, socially and economically. It’s important that everyone inclusively be part of that story.
Bisnow: You mentioned the bridges helping connect both sides of the Anacostia River. What else do you think can be done to help bring more opportunity east of the river to Ward 7 and Ward 8?
Williams: The investments the mayor has made at the Mystics site [at St Elizabeths East], all of these are telling people this is important to the city. These investments are important and I think we need to continue to do that.
I think while we’re making investments, we should continue to learn so that as we revitalize additional neighborhoods, we’re doing it better than we did before. I’m the first to admit, when I started out and when I ended, the neighborhoods we were doing in the Southeast waterfront were better in terms of displacement than when we started. The Capper Carrollsburg housing that we did was a one-for-one replacement. That’s just one project.
Things like the Washington Housing Initiative and other projects go at the economic displacement that we’ve seen, and that’s much broader than individual government projects. The number of people who have been economically displaced, as opposed to displaced because a project came in and brought them out, project displacement is minuscule compared to the economic wave. I think we’re learning how to manage that now, which I think is good.
