Greater Greater Washington

Development


DC's housing affordability crisis, in 7 charts

Renting in DC is getting more and more expensive. These seven charts take a by-the-numbers look at what's causing DC's affordable housing crisis and its consequences for renters.

1. DC's population growth is driving demand for more housing

The District's population is growing. That's good for our economy, but it also means demand for housing is going up.

Since 2005, we've added almost 77,000 residents. That's much different from what happened in the 1990s, when DC lost 35,000 residents. In fact, the District hasn't been this populous since 1979.

2. New housing supply stalled during the recession and is recovering now

During the recession, housing construction stalled while DC's population increased. When there's not enough housing supply to meet the demand, prices can go up.

Housing supply increased steadily in the 10 years leading up to the recession, by an average rate of 1,300 units per year. But between 2008 and 2010, DC gained only 700 new units.

In 2011, the pace of new construction rebounded and exceeded pre-recession levels. Last year, 4,200 new units received permits. But for people renting in DC, the cost of new units is just as important as how many there are.

3. Unfortunately, new housing isn't translating to more affordability

While there are about 12,500 more rental units now than there were in 2005, units with rent higher than $1,500 per month were a big part of the increase.

In 2005, there were 20,900 rental units over $1,500. That number more than doubled by 2012, to 54,800. Meanwhile, the District went from having 65,200 units priced under $800 in 2005 to only 35,000 in 2012, a decrease of over 31,000 units.

4. DC's stock of affordable rentals is declining, and the supply of mid-range units isn't growing

Between 2002 and 2013, affordable units (those priced under $800) went from making up 40% of the rental stock to barely 20%.

Meanwhile, the share of middle-range units (between $800 and $1,400 per month) didn't grow. But the share of high-priced units (over $1,600) ballooned from under 15% of all rental units to 35%.

5. Rents have increased, but a lot of renters' ability to pay has not

While the cost of renting has increased, wages of working-class and lower-income workers (see below for full definitions of these terms) in DC has remained stagnant, leaving many of these households unable to keep up with rising rents. Over the past 16 years, wages at the 50th percentile have increased by only $6, and wages at the 20th percentile have only gone up by $2.

6. Rent in DC is rising faster than income, especially for lower-income and working-class renters

Rent is rising for DC households in the middle to lower end of the income distribution, and their incomes aren't keeping pace.

Incomes at those levels are either not growing at all or are growing far too slowly. Rent is going up for top earners as well, but so are their wages.

7. For the District's lower-income and working-class renters, the rent is "too damn high"

Rising rents, fewer low-cost units, stagnant incomes, and more expensive new rental units all amount to more burdensome housing costs for DC renters. In 2013, 41,000 District renters were severely burdened by housing costs, which is defined as spending more than half their income on housing. This is up from 27,000 renters in 2002.

Those at the middle and lower end of the income distribution are feeling the squeeze of the current situation. Over 60 percent of extremely low income, and over 30 percent of very low income renters, spend more than half their income on housing. The share of low income renters who are severely cost-burdened is up from 1% to 10%.

Such heavy housing cost burdens have serious implications. As working-class and lower-income households spend more of their income on rent, those households have less money to go toward healthcare, education, childcare, transportation, retirement savings, and other necessities.

According to the DC Fiscal Policy Institute, "low-cost private rental housing has virtually disappeared." To bridge the gap between rental housing cost and renters' ability to pay, DC needs to invest in programs that create and preserve rental housing that's affordable to working-class and lower-income households.

What's "lower income"? What's "working class"?

Throughout this post, "low-income" refers to households that made no more than 50% of Area Median Income. In 2013, that meant below $42,950 for family of two and below $53,650 for family of four.

"Working-class" refers to low income households, with incomes between 50% and 80% of Area Median Income. In 2013, that was between $42,950 and $53,400 for a family of two, and between $53,650 and $66,750 for a family of four.

These numbers come from the HUD income limits. Some local housing programs define income categories differently.

Claire Zippel is a Master of Public Policy candidate at Georgetown University's McCourt School of Public Policy and a Policy Fellow at the Coalition for Smarter Growth. She studied urban policy at New York University and interned at the transportation division of NYC's Office of City Planning. She is a fan of maps, data visualizations, and sans serif fonts. 

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Every single industry has to deal with the fact that some customers have lots of money, some customers have little money. In most industries, this results in some companies that specialize in high-end products targeting the wealthy customers (say, Mercedes or Apple) and profit off huge markups, and some companies that specialize in low-end products targeting lower-income customers (say, Kia or TIMEX) and profit off being able to keep production costs low.

Yet it is only in Washington area real estate that we are told over and over again that companies only want to sell to high-income consumers. Why should one industry in one metro area be different than every other industry anywhere else in the world?

It's not that developers don't want to sell housing to low-income people in DC. It's that this region has suffocating land use laws that make it impossible for them to do it. Allow property owners to develop their property, and somebody will specialize in low-income housing. Where there's demand, somebody will supply if you let them.

by Hadur on Apr 30, 2015 10:22 am • linkreport

In the time period from 2005 to the present, DC's gained 77,000 new residents vs. 12,500 new housing units. Is it any wonder the cost of housing is spiking? Given that there's still massive unmet housing demand, it's kind of disengenous to say that new housing isn't adding to affordability. We're still not building enough of it.

by JS on Apr 30, 2015 10:32 am • linkreport

Some of this is unavoidable. What I never hear spoken about but is actually the flip side of the coin is all those middle class neighborhoods in the closer in burbs that have become working class ethnic neighborhoods. The fact that DC is thriving again is good for everyone, and I'm all for increasing the density and simplifying the permitting process to allow more small time developers into the game, but DC is the center, and that's where many people want to be. In another town, they'd annex some surrounding land and even out the demographics, but in DC, the surrounding jurisdictions are not part of the politics which makes things look really skewed, when in fact, it's the normal push and pull of economics. What's really needed is a full blown construction of more metro lines, streetcars etc. Traffic is one of the main reasons the central/metro friendly hoods are going through the roof. Address that need head on instead of endlessly worrying about BRT down 16th street. Just do it already!!!

by Thayer-D on Apr 30, 2015 10:33 am • linkreport

We moved to Prince William County in 2011 partly for reasons of affordability. We found a wonderful neighborhood with a great sense of community in a good school district, parks surrounding us, ample dining in Old Town Manassas etc. Love it.

As far as bending the curve to manipulate the market to make DC, Arlington, Alexandria, and Fairfax more affordable, you can only do so much (although there is a place for this type of effort). But major dollars would be best spent improving a more substantial transportation network to make the affordable places more accessible to jobs (ie: BOTH more rounds and mass transit).

by steve_occoquan on Apr 30, 2015 10:37 am • linkreport

..."both more roads and mass transit".
A short list might include:
-VRE and MARC improvements to a level of Chicago's METRA
-BRT out 95 & 66 with true METRO stations on the medians (like mini Vienna Metros for buses, but extended out)
-2 new bridges over the Potomac. 1 between Reston and Rockville, 1 between Belvior and Route 301
-1 new bridge over the Occoquan from PW to Fairfax.

by steve_occoquan on Apr 30, 2015 10:42 am • linkreport

So, basically, if you are making over 40K there isn't a "Crisis"

People making less than that -- rental markets are taking a lot of their income. Earn more, or move someplace where you money goes further. There is zero need to live in desirable areas where you money can't get you housing.

Oh, wait, if you earn more you'll get kicked out of IZ. I guess forget that.

by charlie on Apr 30, 2015 10:44 am • linkreport

@Hadur

I would imagine modern building and safety codes have a lot to do with it. Obviously Kia has safety reqs it must meet, but intuitively I'd imagine those add a lot less to the overall cost of a car than building codes add to housing construction costs.

I think to answer the question of whether the market is able to provide modern-quality housing to low-income populations, one must look at highly-desirable cities that have avoided extreme housing costs.

Did developers in Berlin and Tokyo actually build housing that was affordable for low-income people? Did they simply build enough high/medium-income housing that the filtering effect kept older housing stock cheap? Or do the Japanese and German federal governments provide large enough housing subsidies that low-income populations can afford new-build housing that would only be available to high-income earners in the U.S.? I don't know, but my guess is that the latter is most likely to be the case.

Is there evidence that markets actually can provide new-construction housing that meets modern building codes and is affordable for low-income earners without huge government subsidies?

by beetroot on Apr 30, 2015 10:47 am • linkreport

In the time period from 2005 to the present, DC's gained 77,000 new residents vs. 12,500 new housing units.

Well, it's not like there are 50,000 new homeless people in DC. Those people found housing somewhere. The problem is not a shortage of physical space for people to live, it's a problem of the high cost of living. And many of the new people who came in are affluent, and those people want Class A or B housing. So that's where the demand lies.

by Scoot on Apr 30, 2015 11:04 am • linkreport

one must look at highly-desirable cities that have avoided extreme housing costs.

I can't think of any very desirable city (either in the U.S. or abroad) where the cost of living isn't extremely high where people actually desire to live. Tokyo is not an inexpensive city to live in -- it's just a bit less expensive than peer cities like Paris, New York or London. It may be twice as affordable as SF but that's not saying much.

http://www.demographia.com/dhi.pdf

by Scoot on Apr 30, 2015 11:15 am • linkreport

@Hadur: +1
@JS: +1
@Thayer-D: +1
@steve_occoquan: +1

@beetroot: Have you ever been to an "Affordable" apartment in Tokyo? They're crammed in and certainly can't afford a lot of space. That said, "modern building and safety codes" haven't kept them from building at a far faster pace in New York City, Boston, Dallas, Houston, etc, etc. This is all about NIMBYism and government regulation. I mean, we've reached the point of historic parking lots of driveways... If we're going to move this region into the 21st Century, we need real solutions, which include 21st Century buildings at 21st Century scale in 21st Century neighborhoods.

by RailGuy on Apr 30, 2015 11:15 am • linkreport

Hadur, it's clearly a zoning issue in DC. Supply is completely constrained which it usually isn't in a free market.

by BTA on Apr 30, 2015 11:15 am • linkreport

@Scoot, yes people have found housing, but that doesn't mean they have as much space as they reasonable expect or are living in a location they actually want to be in. But yes, the housing stock doesn't meet demand, and all DC is doing about it is regulating and regulating, which is driving up prices in the District and driving people to Silver Spring, Bethesda, Tysons, Merrifield, Arlington, etc.

by RailGuy on Apr 30, 2015 11:18 am • linkreport

Is there evidence that markets actually can provide new-construction housing that meets modern building codes and is affordable for low-income earners without huge government subsidies?

That depends on how you define 'low income.'

However, it is clearly possible to a) meet building codes, b) develop profitably, and c) do so at lower price points if a number of conditions are met:

1: Reduce construction costs by removing expensive mandates, like parking spaces (or, ironically, IZ units).
2: Allow lots of new growth/development opportunities, particularly for small scale projects that can make use of lower-cost construction methods.

The other thing to remember is that there is a big marketplace for housing. If you build units that are affordable to the middle class, then many of those middle class renters/buyers won't bid up the price on market-rate affordable units. If there's not such a huge price premium, landlords of cheaper units won't see the benefit of trying to renovate in order to attract a wealthier tenant, thus keeping those units available to low-income tenants.

It's not as simple to say that growth alone will solve the problem, but allowing the city to grow is a necessary condition for any solution.

by Alex B. on Apr 30, 2015 11:23 am • linkreport

In every other city in the world, poor people commute from outside the high-center regional center.

You can rent a 1-bedroom apartment in Southern Towers in Alexandria for about $1,300 a month, you can commute on a one-seat ride to downtown (7Y) for $1.75 each way (presumably you'd get the regional bus pass for the same weekly price to be able to get more trips in).

http://watchdog.org/131125/north-dakota-jobs/

You can use your regional bus pass to get to TOD at Shirlington (with transfers to Tysons and Pentagon City) and shopping at Landmark Mall. This is all without ever paying a dime more than $17.50 a week on a bus pass (and I'm sure you could put in for a low-income subsidy on the bus pass).

Tell me why this doesn't work instead. Little-to-no subsidies needed.

by social darwinist on Apr 30, 2015 11:26 am • linkreport

whoops, wrong link on Southern Towers

http://www.apartments.com/southern-towers-alexandria-va/gvdqw8z/

by social darwinist on Apr 30, 2015 11:27 am • linkreport

@Scoot, yes people have found housing, but that doesn't mean they have as much space as they reasonable expect or are living in a location they actually want to be in.

Is affordable housing supposed to be defined as being able to find a housing unit that has a much room as you would like or be in a most desirable location? Seems a bit odd.

But yes, the housing stock doesn't meet demand, and all DC is doing about it is regulating and regulating,

Although there is a lot of regulation in DC (as in most major cities around the world), from my observation, the trend seems to be toward less regulation as far as the OP, BZA and DCRA are concerned.

by Scoot on Apr 30, 2015 11:30 am • linkreport

Hadur -- you're missing a key element. Land that is highly valued is generally built on in the most economically productive (a/k/a "profitable") manner.

Land at the core is the highest valued, and therefore it is in only very specific situations when it might be more financially productive to build housing there for lower income segments.

Core includes most of DC west of the river, Arlington, most of Montgomery County, Alexandria at a minimum.

At the scale of the entire metropolitan area, lower cost housing is built in some places. But they tend to be less well located a/k/a "farther out."

Or lower cost housing is uneconomic to produce. For example, since the cost of producing highly valued developments raises the cost of labor, materials, etc., for every project, rather than being priced in a locationally specific manner.

Plus, lower cost housing is hard to produce given the cost of production and that existing housing doesn't appraise at values equal to the cost of new production, making it hard to get mortgages. This is an issue east of the river in DC and in PGC.

by Richard Layman on Apr 30, 2015 11:32 am • linkreport

Well for one, $1300 is a pretty big bite for someone earning min wage, or close to it. Its almost $16,000 a year. For someone with an income of 30k a year, over minimum wage at 40hrs a week, that is over 50% of pretax income - before you even get to utilities (not included at ST, I think) or transit fares.

Basically ST is for the upper working class and lower middle class, who have have been displaced by inadequate supply. It is arguably where the poor should be able to afford to live but cannot. Instead the poor live in worse conditions in aging low rises, generally further out that, with less convenient transit.

Secondly, even that may not last much longer. The Beauregard Small Area Plan is going to improve the desirability of that whole area, including with the addition of mid rise mixed use on some of the ST parking lots - and there will be BRT style transitway to ease the rather long bus commutes. When all that happens ST will likely command higher rents.

The City of Alexandria is not willing to allow the west end of Alexandria to be the concentration spot for all the region's poor (despite a commitment to preserving AH by the City that goes beyond what almost any other suburban jurisdiction is doing) Even if it were, there is hardly room there for more poor people from DC in the existing buildings (and of course new market rate will not be affordable to the poor)

by CrossingBrooklynFerry on Apr 30, 2015 11:37 am • linkreport

"Is affordable housing supposed to be defined as being able to find a housing unit that has a much room as you would like or be in a most desirable location? Seems a bit odd."

Damn. I think affordable housing does not mean 2 or 3 or 4 families with children sharing a 3BR apt. It does not mean 3 or 4 children sharing a bedroom. It does not mean multiple people sleeping in the living room.

Some people need to spend some more time in places like Culmore apts, or the cheap apartments in Annandale.

by CrossingBrooklynFerry on Apr 30, 2015 11:40 am • linkreport

Every city has zoning, and DC's isn't even particularly restrictive.

The code is ancient and desperately needs to be updated, but I'm not sure that it's a huge impediment compared to other places.

by andrew on Apr 30, 2015 11:41 am • linkreport

@ Scoot

"It may be twice as affordable as SF but that's not saying much."

I would say that the most desirable city in Japan being twice as affordable as San Francisco - while requiring the same level of seismic protection - says a huge deal: that removing restrictions on development can/will increase affordability by 100%+.

by beetroot on Apr 30, 2015 11:42 am • linkreport

"Is there evidence that markets actually can provide new-construction housing that meets modern building codes and is affordable for low-income earners without huge government subsidies?"

There was a recent study on cost of construction for NYC and it was very depressing. Without the NYC tax rebate, high-rise construction is feasible if a one bedroom can rent for over $3,600. With a tax free first 20yrs or so, that number drops to $2,400 for a one bedroom.

http://furmancenter.org/files/NYUFurmanCenter_InclusionaryZoningNYC_March2015.pdf

Even if DC cost of construction is a quarter of NYC. I would vote for a tax subsidy to increase the profitability of high density development.

by Administrator on Apr 30, 2015 11:42 am • linkreport

Damn. I think affordable housing does not mean 2 or 3 or 4 families with children sharing a 3BR apt. It does not mean 3 or 4 children sharing a bedroom.

Who said it does? No need to set up a false choice.

by Scoot on Apr 30, 2015 11:43 am • linkreport

I would say that the most desirable city in Japan being twice as affordable as San Francisco - while requiring the same level of seismic protection - says a huge deal: that removing restrictions on development can/will increase affordability by 100%+.

Except that Tokyo is still not an affordable place to live. Especially for white immigrants (who refer to themselves as ex-pats). And then there is the fact that the Tokyo is quite a large city and the desirable portions are far more expensive than San Francisco. And then there is the fact that Tokyo still has many restrictions on development, it just doesn't have the same types of historical preservation restrictions that some other cities have.

by Scoot on Apr 30, 2015 11:48 am • linkreport

Scoot

Hadur said this

"Scoot, yes people have found housing, but that doesn't mean they have as much space as they reasonable expect or are living in a location they actually want to be in."

I do not know what Hadur envisioned. I do know what living conditions at the bottom of the housing ladder are like, in one instance having seen a recently vacated "informal lodging house" myself - I got to see the makeshift mattresses tucked into every corner.

There are old apt complexes (and in some places SFHs) in parts of NoVa where the poor live with sq ft per person that is reminiscent of what you would see at the Tenement Museum in NY (at least these places have hot water, indoor plumbing and fairly good light and air - we are still doing better than the 1890s)

When working class people from DC displace the poor in NoVa, the conditions for the poor in market rate units only gets worse.

by CrossingBrooklynFerry on Apr 30, 2015 11:49 am • linkreport

There is one critical component you are missing in this entire discussion, and that is the labor market and unemployment.

DC has an oversupply of low skill labor compared to local demand for labor, and a high demand for higher skill labor. Essentially we do not have an affordable housing crisis, we have an issue with structural unemployment. The housing market is nothing more than a reflection of demand coming from the labor market. DC has higher demand for expensive housing because we have a higher demand for higher skill workers. Lower skill workers are being squezed out of the housing market because their skill set does not match the regional labor economy. There is a 20% unemployment rate for those with a HS education or less, and it has been this way for some time. I should note vocational education is NOT the answer for DC either, those with an associates have a 15% unemployment rate even with being 1% of the total labor pool.

The better solution is not more income capped housing, as this will keep structural unemployment in place and cement the labor-housing mismatch, but more housing period, as well as allow those who are not working to be priced out of the housing market and move from DC. I should note, yes, this includes ending our homeless housing programs as well.

What should we move towards, moving vouchers and trying to place people in jobs outside of DC itself. Sometimes the best solutions fall outside local borders. DC does not have an affordable housing crisis, it has a structural unemployment issue. When facing structural unemployment you are either supposed to train people, or move people depending on the nature of the issue. In the case of DC, the answer is to move people who do not fit the local labor economy because the training needed is unrealistic. You are not going to turn a file clerk into a Ph.D. economist from a selective institution. The answer is not with more affordable housing, but with moving vouchers for those who do not fit the local labor market.

We need more housing period, but we DON'T need more income capped and low income housing. We have an excess of low skilled workers as evidence by the higher unemployment which is mostly structural, and increasing their numbers, and the numbers of affordable housing, is the exact opposite direction we should be moving to resolve the overall situation.

by OOO on Apr 30, 2015 11:50 am • linkreport

@CBF

I went to Annandale HS and knew plenty of people living in those apartments (they were almost all Hispanic). Never heard them complain much about housing (not that that topic of discussion ever much came up).

by social darwinist on Apr 30, 2015 11:53 am • linkreport

It should be noted those new people who came in who are affluent have jobs and educations demanded by the local labor economy, while those being priced out usually have neither. The local labor economy is basically demanding these better educated workers, but not the lower skilled ones. Again, affordable housing is not the issue, it is people who do not fit the local labor economy, and will never likely fit the local labor economy in the future, thus need to move where their labor is in demand. Thus moving vouchers and job placement outside district borders may makes more sense. The DC area is not going to become a hub for low skill jobs and economy, and people need to get used to that.

by OOO on Apr 30, 2015 11:55 am • linkreport

" Again, affordable housing is not the issue, it is people who do not fit the local labor economy, and will never likely fit the local labor economy in the future, thus need to move where their labor is in demand."

This.

by charlie on Apr 30, 2015 12:01 pm • linkreport

And in addition, requiring 10% set asides in new buildings for IZ increases the price of the remaining units in the building -- as well as limiting the number of new units coming on.

Combine that with existing low rise section 8 in desirable areas, and the "housing crisis" is really too much low income, rent controlled, housing in high demand areas.

by charlie on Apr 30, 2015 12:04 pm • linkreport

"Scoot, yes people have found housing, but that doesn't mean they have as much space as they reasonable expect or are living in a location they actually want to be in."

I do not know what Hadur envisioned.

I don't know what Hadur envisioned either. But housing affordability is always going to be a problem for people living on the lowest ends of the income spectrum because private developers do not want to build housing for those people.

Certainly a huge part of a solution will be substantially raising the minimum wage to narrow the income gap so that working class people can afford to live in certain types of market rate housing. Building project housing was an obvious failure, so now we're having a go at inclusionary zoning. We'll see what happens there.

Cities that have relatively little land use regulation may be more affordable, but in many cases a restrictive land use policy is what keeps places very appealing. Remember the "What Makes a City Attractive" post back in March? Most of those recommendations involve a ton of government intervention and regulation.

by Scoot on Apr 30, 2015 12:16 pm • linkreport

But I will agree that transportation has to be part of the mix. In an urban area, all other things being even, density = cheaper, similarly for transit all other things being even, density of rides = cheaper. High density housing and high frequency transit are the only way to improve affordability in a meaningful way in an urban area where land is at a premium. There is probably not a good rationale for building massive towers in Manassas or Bowie but there absolutely is in Ballston, Silver Spring, and Waterfront. That's why it's a problem when development at Rhode Island Ave gets downzoned or when Chevy Chase tries to block a transit link that would see a lot of usage.

by BTA on Apr 30, 2015 12:22 pm • linkreport

"But housing affordability is always going to be a problem for people living on the lowest ends of the income spectrum because private developers do not want to build housing for those people."

but in our region, even 60 year old multifamily housing is not affordable (at least if you focus on NoVa - I am not sure why folks did not drag out PG in the above discussion)

"Certainly a huge part of a solution will be substantially raising the minimum wage to narrow the income gap so that working class people can afford to live in certain types of market rate housing. Building project housing was an obvious failure, so now we're having a go at inclusionary zoning. We'll see what happens there."

There are an array of AH policies beyond traditional large public housing projects on the one hand, and IZ on the other. There are small scatter site public housing development (we have quite a few in Alexandria, and there are some in Arlington - though not technically public there)
- there are mixed income on govt owned land with much higher numbers of AH units than in IZ = there are tax credits for low income housing, and there is still Section 8.

"Cities that have relatively little land use regulation may be more affordable, but in many cases a restrictive land use policy is what keeps places very appealing."

To improve market rate supply, does not necessarily mean having little land use regulation. It means removing those land use regulations that specifically impede the supply of new housing.

by CrossingBrooklynFerry on Apr 30, 2015 12:25 pm • linkreport

but in our region, even 60 year old multifamily housing is not affordable (at least if you focus on NoVa - I am not sure why folks did not drag out PG in the above discussion)

Not afforable for whom? In NoVA, the median priced home (or rental) is affordable for the median wage household.

To improve market rate supply, does not necessarily mean having little land use regulation. It means removing those land use regulations that specifically impede the supply of new housing.

Pretty much any land use regulation impedes the supply of new housing in some way. So where do you draw the line exactly?

by Scoot on Apr 30, 2015 12:30 pm • linkreport

So where do you draw the line exactly?

You create a professional bureaucracy that is empowered with maintaining housing affordability by applying their technical / analytical abilities. That is the essence of good governance.

by BTA on Apr 30, 2015 1:03 pm • linkreport

GGW discovers the laws of supply and demand. Is shocked, shocked I tell you!

by Sete Peeger on Apr 30, 2015 2:24 pm • linkreport

You create a professional bureaucracy that is empowered with maintaining housing affordability by applying their technical / analytical abilities. That is the essence of good governance.

Quite true. Actually I believe it was Abraham Lincoln who once said, "Bureaucracy is the essence of good governance."

by Scoot on Apr 30, 2015 2:32 pm • linkreport

"empowered with maintaining housing affordability by applying their technical / analytical abilities."

exactly what sort of empowerment are we talking about here?

by Jack Jackson on Apr 30, 2015 2:38 pm • linkreport

We are in the midst of a housing crunch at the lowest end, that's for sure, but we are do so much better than cities where the supply of luxury housing has not grown so quickly. The most extreme example, San Francisco, has seen a huge number of luxury conversions and so its median rent has grown by 10% per year for the last few years. They've placed the wealthy in competition with middle and lower-income folks for housing, and that is the result.

Median rents have declined by about 1% in the District for each of the past two years. That's a very good sign, and the huge number of luxury units in the pipeline will help ensure that continues.

To maintain our affordable supply, it needs to be more difficult to do a luxury conversion than to build a new building.

by David Edmondson on Apr 30, 2015 2:40 pm • linkreport

Yes, the exact problem of housing pricing is that there's not enough bureaucrats.

This discussion has slipped into self-parody.

by social darwinist on Apr 30, 2015 2:40 pm • linkreport

Especially for it's incomes, Washington is always listed as having some of the most affordable housing in the country.

Millennials just need to be willing to live around black people.

by Tom Coumaris on Apr 30, 2015 2:55 pm • linkreport

"Millennials just need to be willing to live around black people."

Unlikely, as in most southern cities.

by social darwinist on Apr 30, 2015 3:25 pm • linkreport

"Not afforable for whom? In NoVA, the median priced home (or rental) is affordable for the median wage household."

Was it not clear that I was discussing the poor? Who BTW, do not live one 'family' per unit necessarily. In market rate housing in NoVa they typically live multiple families per unit in order to have a roof over their heads. I am not sure how a "household" is defined in that case.

by CrossingBrooklynFerry on Apr 30, 2015 3:58 pm • linkreport

"Pretty much any land use regulation impedes the supply of new housing in some way. So where do you draw the line exactly?"

Here in NoVa we have land use regulation that prevents the building of certain kinds of heavy industry outside specified zones. Perhaps in DC you do not have that?

by CrossingBrooklynFerry on Apr 30, 2015 3:59 pm • linkreport

"Pretty much any land use regulation impedes the supply of new housing in some way. So where do you draw the line exactly?"

Restricting our discussion to land use regulations impacting the supply of new housing, you weigh costs and benefits of course. IMO one should include among the costs of any such restriction, the impact on housing costs to people at all levels, but especially to the poor, the folks doubling up in low quality apartments, with grossly inadequate space per person by post tenement standards.

Others will wish away the poor to North Dakota, or some imagined suburban paradise where decent large apts are cheap, or to lead paint filled houses in Baltimore, or wherever. Then the cost of preserving "traditional single family home character" or "stopping those hideus popups" or "keeping out those Clarendon look alike apartments" is only borne by college educated millenials, who, ironically enough, can be shamed for not wanting to live with the poor or black, by those who think the poor blacks should move to North Dakota.

by CrossingBrooklynFerry on Apr 30, 2015 4:05 pm • linkreport

@charlie - This is incorrect: "requiring 10% set asides in new buildings for IZ increases the price of the remaining units in the building -- as well as limiting the number of new units coming on."

IZ provides a 20% density bonus in exchange for a 8-10% set aside of below market rate housing. So IZ helps more housing be built as a matter of right - more market rate housing, along with some IZ units. It's very much a supply-side tool.

What increases prices? the arms race for luxury amenities (dog spas on the roof).

by Cheryl Cort on Apr 30, 2015 4:06 pm • linkreport

"Yes, the exact problem of housing pricing is that there's not enough bureaucrats."

There are quite enough - Scoot asked where to draw the line. In DC OP had enough manpower to say where. I would suggest that planning depts in every suburban jurisdiction have the manpower to fulfill that mandate. What is needed is not more staff, but more political will among citizens to follow through and support needed changes.

GGW, among others have done yeoman's work in pushing that agenda by the way - in our debates in Alexandria I think there is much greater awareness of the social cost of effectively exclusionary zoning than there was a couple of decades ago. But as we see, there is always pushback.

by CrossingBrooklynFerry on Apr 30, 2015 4:09 pm • linkreport

"Especially for it's incomes, Washington is always listed as having some of the most affordable housing in the country."

Average income masks the inequality in regional incomes. Also of course many high income people here are very highly educated, so they would likely be earning high incomes elsewhere.

"Millennials just need to be willing to live around black people."

Almost all the neighborhoods in DC that are popular with millenials have significant numbers of black people living in them, and the liberal millenials are among those (unlike some folks posting here today) who want to make it possible for poor blacks to stay in those neighborhoods.

Of course as millenials move to new neighborhoods, that means there is less room for the poor in those n
neighborhoods. Gentrification may be inevitable, but
relying on it as the only solution to the problem of housing for the young, as some would do, accelerates its pace and magnifies it's costs.

But yeah, gentrify till you qualify.

by CrossingBrooklynFerry on Apr 30, 2015 4:14 pm • linkreport

Was it not clear that I was discussing the poor?

Well, seeing as your proposed solutions to the problem of affordable housing wouldn't do anything to help the poor, then perhaps it's not so clear.

A lot of new data suggests that if the government wants to help poor people afford reasonable housing, then it should just give people money to pay their rent.

Instead, the current inertia is toward shoe-horning affordable units into market rate buildings (driving up the price of the market rate units), developer tax abatements and other supply-side hand-outs. So far the "solution by way of technocracy" could be working out a lot better than it is.

by Scoot on Apr 30, 2015 4:24 pm • linkreport

Almost all the neighborhoods in DC that are popular with millenials have significant numbers of black people living in them, and the liberal millenials are among those (unlike some folks posting here today) who want to make it possible for poor blacks to stay in those neighborhoods.

I think you're right. There seem to be a lot of millenials who want to keep poor people where they are as a means to give "character" and "zest" to the neighborhood.

by Scoot on Apr 30, 2015 4:27 pm • linkreport

"Well, seeing as your proposed solutions to the problem of affordable housing wouldn't do anything to help the poor, then perhaps it's not so clear."

I believe we need a multi-pronged approach. Improve incomes (itself a complex issue) provide more AH units directly (including by IZ, but not only by IZ) and by reducing zoning and other obstacles to the building of market rate housing. I do believe that people and units filter, and that restrictions on the supply of market rate housing end up worsening the plight of day laborers living packed in at illegal occupancy levels in places like Culmore. The submarket relationships may be too complex for a modest weakening in the rents in Class A apartments to be visible at the bottom, but as I have said before, those affluent people have to come from somewhere.

Someone else mentioned Southern Towers. I know Southern Towers. It definitely gets people filtering down from slightly newer, slightly better located, slightly better laid out buildings in Alexandria and South Arlington. If they did not do so, units at ST would be cheaper than they are, and people would filter up to ST. All the regional housing markets are linked, to greater and lesser degrees.

by CrossingBrooklynFerry on Apr 30, 2015 4:30 pm • linkreport

"There seem to be a lot of millenials who want to keep poor people where they are as a means to give "character" and "zest" to the neighborhood."

Some for character, some out of their social and political beliefs. In any case I continue to find the meme "those millenials, they are racist for not being willing to displace more blacks, but me, I am much less racist, because I want to see all the poor blacks move to Charles County, or North Dakota" to be one of the weirdest memes of our time. Far more bizarre than the worst hipsterism.

by CrossingBrooklynFerry on Apr 30, 2015 4:33 pm • linkreport

There seem to be a lot of millenials who want to keep poor people where they are as a means to give "character" and "zest" to the neighborhood.

Or because there's evidence that mixed-income communities provide benefits for all kinds of people and families. I don't think making it possible for people of all incomes to live in a neighborhood means any ONE particular low-income person or family has to stay there.

by MLD on Apr 30, 2015 4:36 pm • linkreport

"There seem to be a lot of millenials who want to keep poor people where they are as a means to give "character" and "zest" to the neighborhood."

That's so patronizing and insulting...you treat the local poor as a neigborhood talisman. "Boy, we've got a Chipotle and a bike store, wouldn't it be great to get some poor people to give this place some more soul or zest?"

by unbelieveable on Apr 30, 2015 4:43 pm • linkreport

I am sorry Scoot, I may have misunderstood. Do you mean there are liberal millenials who want to keep poor blacks in their neighborhood against said blacks people's will? I have to say I doubt that very strongly. I think they do want to give them the choice to stay.

But whatever. Millenials are racist for wanting there to be a few IZ units so blacks can continue to live on some all luxury apt block in Logan Circle. They are also racist for not moving to Deanwood (at least not in greater numbers than they already are) Basically, whatever they do or say, millenials are racists. I guess unless they get on board with fighting the evil zoning update.

For all the crazy Old Town NIMBYs I have got to say there is nothing in Alexandria as tangled or bizarre as the race/class/generation/NIMBYISM/development politics in the District.

by CrossingBrooklynFerry on Apr 30, 2015 4:45 pm • linkreport

"That's so patronizing and insulting"

It is a parody of actual attitudes of some millenials. IIUC the person who said it lives in far Upper NW.

I have way to much grey hair to be a millenial. I live in Alexandria in a very multiracial area. I am glad for the diversity in our neighborhood, and in our City. Our city is going to develop and supply lots of new housing, and will do so while building enough guaranteed affordable housing to keep the City a choice for many poor people.

by CrossingBrooklynFerry on Apr 30, 2015 4:47 pm • linkreport

"Boy, we've got a Chipotle and a bike store, wouldn't it be great to get some poor people to give this place some more soul or zest?"

I think that's the right idea but you should replace Chipotle with like a beer garden or a coffee shop, because Chipotle is seen as too corporate and inauthentic.

by Scoot on Apr 30, 2015 4:51 pm • linkreport

I live in Alexandria too, and my whole neigborhood is affordable because everybody can afford the rent.

by unbelieveable on Apr 30, 2015 4:52 pm • linkreport

"I live in Alexandria too, and my whole neigborhood is affordable because everybody can afford the rent."

this trite meme has been posted here and elsewhere a million times, and provides no insight into the problem. It is a quibble on the definition of "affordable" and like most quibbles, does not add to the discussion.

by CrossingBrooklynFerry on Apr 30, 2015 5:01 pm • linkreport

Sorry I didn't mean to be glib...I guess I was working off of a different definition of 'affordble'!

by unbelieveable on Apr 30, 2015 5:10 pm • linkreport

I worry that this debate is getting a little off-topic. Let's try to keep it civil and constructive.

Thanks.

by Matt' Johnson on Apr 30, 2015 5:13 pm • linkreport

When you're talking IZ you're covering a broad range of incomes. The 80% and even 60% of average income units are seen by many as just a trick by young people starting out but upwardly mobile to get cheap housing in otherwise expensive areas. Certainly when incomes go above the limit the lower cost should disappear but at least in CityCenter the ones who won the lottery get to keep their low-rent units for life, no matter how rich they get.

Workforce housing as it's known and done in other countries may work for it's intended purpose; but in DC.....

by Tom Coumaris on Apr 30, 2015 5:16 pm • linkreport

According to Census, DC's median household income rose 62.5% since the 2000 census and DC Fiscal Policy Institute suggests median rent rose only 50%. Therefore the market reacted as expected, and which partly discredits this so-called "housing affordability crisis"

by Brett M on Apr 30, 2015 6:33 pm • linkreport

@social darwinist

"In every other city in the world, poor people commute from outside the high-center regional center.

You can rent a 1-bedroom apartment in Southern Towers in Alexandria for about $1,300 a month, you can commute on a one-seat ride to downtown (7Y) for $1.75 each way (presumably you'd get the regional bus pass for the same weekly price to be able to get more trips in)."

There goes the narrow mindedness !

How many poor work 40 hours a week or full time

How many poor make enough to afford $1,300 per month in rent after, food, transit fare etc.

How many poor people work when that bus operates ?

Lets be real most of the buses coming into DC are for blue collar workers 99% of the buses from Virginia into DC do not run during the hours of typical Blue Collar works ( ealry in the morning or late at night or on weekends)

If you work at night 12am, 1am or 2am this area is god damn hard to get around in. There are maybe 5 bus routes in all of DC that run that late and nothing crossing between DC & Virginia or DC & Maryland.

On weekends the only reliable way into downtown is via Metrorail and it is a piece of s**t!

How many poor work odd hours, get off or start work late at night when the system is not running.

Why is a transit system a piece of s**t compared to damn near all systems in a city our size or the capital of a country ?

In many cities outside of the US I could walk out of my door at 3am or 4am ad go anywhere I would like without any trouble.

by kk on May 1, 2015 1:45 am • linkreport

kk - Truth! Studies show about half of people work hours that aren't 9-5.

by asffa on May 1, 2015 9:57 am • linkreport

"Lets be real most of the buses coming into DC are for blue collar workers 99% of the buses from Virginia into DC do not run during the hours of typical Blue Collar works ( ealry in the morning or late at night or on weekends)"

Typo this what happens when writing at 1am

Lets be real most of the buses coming into DC are for White Collar workers 99% of the buses from Virginia into DC do not run during the hours of typical Blue Collar works ( early in the morning or late at night or on weekends)

The only buses that are really serving Blue Collar workers in DC or VA would be the 23A, 38B or 13Y which run when Metrorail isn't open.

If you get on those buses early in the morning or late at night such as 12 or 1am you see a bunch of people in uniforms getting off of work from cleaning jobs, resturant jobs and retail jobs.

by kk on May 1, 2015 11:12 am • linkreport

The charts are nice but the comment thread is more reasonable on the prior instance when GGW covered affordability and hipster millenials a few months ago.

------------------------------------------------
http://greatergreaterwashington.org/post/21701/breakfast-links-yesterday-and-today/

Priced out of DC: A new report shows that housing prices in DC are out of reach for those in many professions because wages are not keeping pace with the housing market. An $80,000 salary is needed to afford the median-priced home of $302,000. (WAMU)

Region is hot for "hipster flipping": A listing of the top ten zip codes for flipping a property to sell to hipsters includes six Washington area zips, with Fairfax leading the way with an average flip profit of $210,020. (WTOP)
------------------------------------------------

Missing from the chart are changes to household sizes... families (poorer and larger HH sizes) are moving out; one, two and three person families are moving in...

So the net housing increase is 12,000 (out of 20,000-ish building permits) and the net increase in population is 75,000.

Section 8 housing is coming to end of contracted life and being converted to market rate (in the current expensive environment).
Rent-controlled apartments in DC are getting "loopholed" and escaping from rent control constraints.
Only governments build housing for low income (<30% AMI) and mostly they don't. DC has the largest share of the poor from the region (~20% by population, vs ~8-12% in surrounding suburbs)
The land is really expensive in DC neighborhoods. Building costs have been discussed in prior threads when Hadur last brought up the wrongheaded "it's regulation that keeps the rents up" meme.

It's not regulation, it's profit and costs to deliver new housing.

BTW, millenials aren't importing "the poor and black", they are moving to areas that have (until recently) been almost exclusively populated by working class and lower income families. Columbia Heights, Petworth, Park View, Bloomingdale, TRINIDAD!?!, NOMA, H-St NE.

by dc_pops on May 1, 2015 11:18 am • linkreport

BTW, millenials aren't importing "the poor and black", they are moving to areas that have (until recently) been almost exclusively populated by working class and lower income families. Columbia Heights, Petworth, Park View, Bloomingdale, TRINIDAD!?!, NOMA, H-St NE.

Well truthfully speaking, those neighborhoods were mostly populated by middle and upper middle income families -- only recently have they been populated by working class and lower income families, and now affluent people are starting to move back in to make the neighborhood more racially and economically diverse.

by Scoot on May 1, 2015 3:42 pm • linkreport

"Lets be real most of the buses coming into DC are for blue collar workers 99% of the buses from Virginia into DC do not run during the hours of typical Blue Collar works ( ealry in the morning or late at night or on weekends)"

Even the "express" buses for 9-5 workers do not run reliably and on schedule. I used to live near Landmark, and tried my best to get to my job in DC via public transit. Often it would take three hours just to go one way. And sometimes I'd get harassed by men while waiting at the bus stop. In the evenings it was dangerous because I'd have to cross Little River Turnpike, a very busy and pedestrian-unfriendly road, in the dark.

I gave up and starting driving to work, which has its own dangers, but on most days does not take three hours.

Theoretically you can get by in the area without a car, but you have to sacrifice a lot of time and personal safety to do it. And you're still isolated to just a handful of places that the bus will go.

by Caroline on May 1, 2015 3:50 pm • linkreport

There are sort of two parallel crises going on here. One is of absolute affordability: for the working class, are the paltry wages of the modern service industry enough to afford anywhere at all within commuting distance of that job?

The other is more relative: I'm your typical white-collar professional and after three years in two apartments, I just got completely priced out of my neighborhood around U/14th/Shaw/Logan, despite a 25% increase in my max rent during an apartment hunt. And I've only been in this apartment for 20 months - that's how quickly and highly the rents are going up.

Which speaks not so much to any solutions so much as a paucity of "nice places" to live: transit-accessible, with plenty of things in walking distance, and a not-ridiculous rent. Finding those three in combination are increasingly difficult, which is, of course, putting renewed pressure on the few areas like that we do have.

Anecdotally, I've also noticed, shall we say...an older crowd around 14th Street than in past years. Is there maybe a wave of empty nesters with higher purchasing power coming to displace all the millennials?

by Low Headways on May 4, 2015 8:36 am • linkreport

@Low Headways; no, that is just the dinner crowd from Le Diplomat trying out something new.

About 75% of the affordable housing-land use whining around here is 30 year olds realizing that some people in their peer group are making a lot more money than them.

As for the rest, as a few people above said, it may be that in strong market areas the only group than build new affordable housing is the goverment (or related nonprofits). IZ isn't a useful tool here -- the income limits in particular defeat the purpose of social housing.

And while I see the logic of providing for senior housing, social housing as a solution needs to be time-barred.

by charlie on May 4, 2015 8:59 am • linkreport

I see no reason to lack sympathy for 30 YOs facing the implications of the extreme inequality in our country, combined with too little housing in TOD WUPs. And of course that and the problem of housing for the poor are linked, because the general directive to the complaining 30YOs is to filter down, which has the result of making housing scarcer further down the SES scale.

by CrossingBrooklynFerry on May 4, 2015 9:08 am • linkreport

@Brett M: There are also apartments with rent under $750 a month but the locations are not so hot. Isn't the cheap housing in undesirable areas a force of the market and why do people believe they are entitled to cheap rent in hot areas?

by rosita on May 4, 2015 11:44 am • linkreport

@ Rosita

Name one place where you can find a place for $750 a month!

that has either of the two nearby

1 metro station (not a across an interstate, long bridge, highway from the station that you can have to go in a circle to reach)

2 bus stop (where the bus runs 7 days a week atleast from 6am -12:30am) that is less than a 1/2 mile away. That takes less than 30 minutes to get to a Metrostation

If the place needs a car to get to its not affordable since the person would have to 1 be able to drive 2 get a car

by kk on May 4, 2015 3:51 pm • linkreport

@kk: What I really said was "There are also apartments with rent under $750 a month but the locations are not so hot". But they'd be less than a 1/2 mile from a bus stop. Here is a link to find them: http://www.apartments.com/600-to-800/?bb=_pzn07ng2Hizm2hkL

by rosita on May 4, 2015 4:17 pm • linkreport

Thank you. Your presentation really helps tell the story and the difficulties people are facing. At Samaritan Ministry, our caseworkers help people - everyday - to find affordable housing and living wage jobs. They have to reach higher with fewer resources.

by Don McCrabb on May 5, 2015 9:22 am • linkreport

@kk: There are also a few condos and houses for sale under $100,000: http://www.realtor.com/realestateandhomes-search/Washington_DC/beds-studio-plus/baths-1/price-1000-100000

by rosita on May 5, 2015 2:31 pm • linkreport

Rosita, some of those are auction minimums, not actual prices. Some are short sales, which means the low price may not end up being approved by the bank.

by CrossingBrooklynFerry on May 5, 2015 2:39 pm • linkreport

@CrossingBrooklynFerry: Okay and some or as I said, a few are actual sales prices. Do you just like being argumentative?

by rosita on May 5, 2015 2:44 pm • linkreport

Just trying to help keep things accurate, Rosita.

Have a nice day :)

by CrossingBrooklynFerry on May 5, 2015 2:58 pm • linkreport

Again, affordable housing is not the issue, it is people who do not fit the local labor economy, and will never likely fit the local labor economy in the future, thus need to move where their labor is in demand.

We're talking about IZ right? Don't you have to have a job (or at least income) to qualify for IZ? So, ostensibly, people using the IZ fit the local labor economy, they just don't make enough to afford to live in the area.

by David C on May 12, 2015 10:29 pm • linkreport

Even a middle class guy like myself that makes 70 grand can't afford to remotely own a house in NVA...with 600 plus houses one just can't and live with in a good commute. I've already done the slow terrible traffic from Prince William. I just don't want to live life in traffic. At some point the area gotta give or people like myself will consider moving else where where traffic moves and there is affordable housing for all

by Escape from WMA on May 5, 2016 12:45 pm • linkreport

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