B26-0700: Reservoir District Tax Exemption Amendment Act of 2026

June 3, 2026

Nyasha Smith, Secretary Council of the District of Columbia 1350 Pennsylvania Avenue, NW Washington, D.C. 20004

Dear Secretary Smith,

Today, I am introducing the “Reservoir District Tax Exemption Amendment Act of 2026.” Please see enclosed signed copy of the legislation. This legislation is identical in substance to emergency and temporary versions of this bill that were adopted by the Council on May 5, 2026 and June 2, 2026.

The Reservoir District is a mixed-use urban community that exemplifies the District’s public- private partnership model, transforming underutilized land into a vibrant residential and commercial neighborhood. Section §47–4683 of the District of Columbia Official Code provides a tax exemption for Reservoir District Parcels 2 and 4, a critical component of the project’s financing; however, an issue has arisen with the way that language was drafted: The project’s Tax Abatement Financial Analysis (“TAFA”) was structured using the 80 Percent Income Limit Category of the Multifamily Tax Subsidy Project Income Limits established annually by the United States Department of Housing and Urban Development (“HUD”) as the basis for projected residential revenue. The Inclusionary Zoning (“IZ”) rates published by the District of Columbia Department of Housing and Community Development in February 2026 do not match HUD’s Multifamily Tax Subsidy Project Income Limits.

Requiring the project to operate under the current IZ rates rather than HUD’s Multifamily Tax Subsidy Project Income Limits would impact the project’s economic feasibility, delaying or potentially preventing the delivery of the planned housing and associated community benefits. Those beneifts include new affordable housing units as well as a long-promised and much needed grocer tenant. This legislation provides a tailored correction that would allow the project to operate using 80 Percent Income Limit Category of the Multifamily Tax Subsidy Project Income Limits established annually by HUD, as contemplated in its TAFA.

2 Please feel free to reach out to me or my Legislative Director, Neferteria Brown, with any questions or for additional information.

Sincerely,

Zachary Parker Ward 5 Councilmember Chair, Committee on Youth Affairs

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1 _____________________________ 2 Councilmember Zachary Parker 3 4 5 A BILL 6 7 _________________________ 8 9 IN THE COUNCIL OF THE DISTRICT OF COLUMBIA 10 11 _________________________ 12 13 14 To amend, on an emergency basis, Chapter 46 of Title 47 of the District of Columba 15 Official Code to designate the property as affordable housing for which Fair Market Rents, as 16 calculated by the US Department of Housing and Urban Development, apply. 17 18 BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this 19 Act may be cited as the “Reservoir District Tax Exemption Amendment Act of 2026”. 20 Sec. 2. § 47–4683 is amended as follows: 21 (a) Section 47-4683(b)(2) is amended to read as follows: 22 “(2) Set aside 1/3 of the operating rental housing units in the Property as 23 affordable as defined by 26 U.S. Code § 42(g)(2)(A). The units designated as affordable will be 24 available to households qualifying for the 80 Percent Income Limit Category of the Multifamily 25 Tax Subsidy Project Income Limits for the Washington-Arlington-Alexandria, DC-VA-MD 26 HUD Metro Fair Market Rent Area as reported annually by the US Department of Housing and 27 Urban Development and made in a manner consistent with I.R.C. § 142(d)(2)(B). 28 Sec. 3. Fiscal impact statement. 29 The Council adopts the fiscal impact statement of the Budget Director as the fiscal impact 30 statement required by section 4a of the General Legislative Procedures Act of 1975, approved 31 October 16, 2006 (120 Stat. 2038; D.C. Official Code § 1-301.47a). 32

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