By now, it’s hardly news that the D.C. housing market is unaffordable to an increasing number of District residents. But that doesn’t make it any less interesting to quantify and visualize this trend. For that, we have the prolific Urban Institute, which is out with its latest study of the exploding cost of housing for Washingtonians relative to the puny increases in their incomes.
Take a look at the chart above. In 2005, 17 percent of all rental units went for under $500 in 2012 dollars, while 14.9 percent charged over $1,500. In 2012, those sub-$500 units made up just 11.3 percent of the total stock, while the $1,500-plus ones were up to 35.9 percent of the total. Monthly rents under $1,000 went from the distinct majority to the distinct minority. This is after adjusting for inflation—-it’s the real cost of renting in D.C.
But there are some trends that might seem a bit more surprising. The chart below shows that the supply of rental units that are affordable to extremely low-income residents—-that is, units that cost less than 30 percent of the income of a household making under 30 percent of area median income—-dropped significantly between 2000 and 2011, as it did for very low-income residents, those making between 50 and 80 percent of AMI. But within those categories, it was mostly just the supply of affordable studios and one-bedrooms that tanked. Despite the conventional wisdom that the city has a shortage of larger units as developers cater to young professionals requiring no more than one bedroom, the number of affordable three-bedrooms actually increased across all income levels, as did the number of affordable two-bedrooms for all but the poorest residents.
The cost of buying a home has certainly gone up over the past five years as the city and the country have pulled out of the recession. But the chart below shows that relative to the earlier peak prices during the housing bubble around 2006 and 2007, costs are actually pretty flat after accounting for inflation. In wards 7 and 8, in fact, home prices are still meaningfully lower than they were at the height of the boom.
But that’s not the case everywhere. Take a look at this map:
In the Shaw/Logan Circle area, homes cost 298 percent more in 2013 than in 2000. In the Ivy City/Trinidad/Carver Langston area, the increase was 258 percent. (“Of course it’s relative to where they started,” notes Peter Tatian, the study’s lead researcher—-Trinidad was a much cheaper neighborhood back when a spike in violent crime led the city to install checkpoints at all streets entering the neighborhood.) These price increases threaten subsidized housing, as property owners might choose not to renew Section 8 contracts or other federal subsidies that require affordable rents. “Owners and developers may decide it is more lucrative to switch from providing assisted housing to providing luxury apartments or condominiums,” the report states.
But the biggest loss of affordable housing has come not in subsidized projects, but in market-rate housing, where rents have shot up. “There’s been a lot of new construction, but it hasn’t really been enough to keep prices and rents from continuing to go up and up,” says Tatian.
For more data, see the Urban Institute report.
Images from the Urban Institute report