By Jessica Fulton
If you have tried to look for an apartment or buy a home in D.C., you know just how expensive a place it is to live, especially in recent years. Because the District did relatively well compared to other jurisdictions during the recession, businesses and new residents continue to flock to the area to take advantage of relatively strong job market and ever-expanding amenities in the metro area.
While the rising popularity of D.C. is a good sign of the District’s economic progress, it also has contributed to a rapid rise in housing costs that is making it harder to find affordable places to live.
How high have housing costs risen? Since the start of the decade, rents for a one-bedroom apartment rose by more than 50 percent — from $735 a month in 2000 to $1,100 a month by 2010. Rental prices increased even during the recession, when many District residents were struggling to make ends meet.
The rapid rise in housing costs has contributed to a vanishing supply of affordable housing in D.C. Since 2000, the supply of affordable rental units (those that cost less than $750 a month) dropped by half, while the number of high-cost units (those costing over $1,500 a month) more than tripled.
Home prices have also skyrocketed. Although prices dipped somewhat during the recession, the median home value nearly doubled over the last decade, from $200,000 in 2000 to $400,000 by 2010. As a result, low-cost D.C. homes — the kind that might be bought by a first-time homebuyer or moderate-income family — have nearly disappeared. The number of homes worth less than $250,000 has fallen by more than 70 percent over the last decade.
The rise in housing costs is outpacing the incomes of most D.C. households. Because of this, more and more D.C. residents are now spending more than half of their income on housing. As families spend more on housing, the harder it becomes to pull themselves into the middle class. They have less to spend on education, transportation and health care, and are at greater risk for being one economic shock away from homelessness. And while the problem remains most heavily concentrated on D.C.’s lowest income families, housing burdens are moving up the income scale and impacting more moderate-income families.
With a significant loss in affordable housing stock, and housing costs that are rising much faster than incomes, the District is struggling to retain affordable housing that would allow all residents to survive in the city. The private market produces little affordable housing on its own, so it is critical that the District invests in the creation and preservation of affordable housing.
The D.C. Council recently took an important step and began to reinvest in programs that help to increase the supply of affordable housing in D.C. The Council used the 2013 budget to allocate nearly $25 million in additional funds to help build and preserve affordable housing, move homeless families out of shelters and into stable housing to help them get back on their feet, and to fund a program that helps low-income families purchase their first home.
Affordable housing is an integral piece to economic development in the District of Columbia. A thriving economy rests on diversity of residents. By investing in affordable housing, the District helps to diversify its economy and helps to ensure that the District is a place where residents across the economic spectrum can live.