New Report Details DC’s Affordable Housing Crisis

When we moved to Capitol Hill, our house was near the frontier of gentrification. Over the years, we’ve watched property values soar and small apartment buildings give way to condos.

The townhouse next door to us–described by a former owner as a nice place for one person or two people who get along very well–recently sold for more than half a million dollars. A sign on a nearby condo advertises units beginning at $400,000. Rental units are scarce, and most list at over $1,500 a month.

A new report by the DC Fiscal Policy Institute puts our experience in perspective. Using Census Bureau data from 2000-2007, it documents the growing affordable housing crisis throughout the District.

  • A loss of more than a third of the District’s low-cost rental units (units with rent and utility costs of $750 or less).
  • A 55% increase in the number of units costing more than $1,500.
  • A loss of 43,000 homes valued at $250,000 or less–from more than half of all owner-occupied homes to just one-sixth.

Of course, this change in the real estate market reflects changes in our local economy–increases in professional, business and health care services, IT and real estate development itself. These have produced a large increase in higher-income households.

But the shrinkage of affordable housing is putting stress on a growing number of people. More than 40% of all D.C. households have housing costs above the U.S. Department of Housing and Urban Development’s affordability standard, i.e., 30% of income. That’s 20,000 more households than in 2000.

Needless to say, households at the bottom of the income scale are faring worst.

  • More than 60% of those with incomes below 30% of the area median income* are paying more for housing than the HUD affordability standard.
  • Two-thirds of the households that pay more than they can afford have incomes below half the AMI.
  • Nearly 50,000 households pay more than half their income for housing. Of these, 85% have incomes below half the AMI.

The D.C. government provided substantial funding for affordable housing during the period covered by DCFPI’s report. Funding for three key programs–the Housing Production Trust Fund, the Local Rent Supplement Program and the DC Department of Housing and Community Development–increased, in current dollars, from $7 million in 2000 to $92 million in 2007.

Funding rose again in 2008–to $123 million. Then the impacts of the recession set in–a drastic drop in HPTF funds, which come from fees paid to record deeds and transfers, and cuts made to balance the District’s budget. DCFPI says that the current budget for core housing programs is just over half what it was in Fiscal Year 2008. This was before the Mayor’s recent spending cut order.

If we had an affordable housing crisis in the years covered by the report, imagine what it is now. Rents are still very high. And many more people are unemployed or struggling to make do with part-time jobs.

DCFPI suggests that the District try to maintain funding for some stalled affordable housing projects and for existing rent subsidies. This is a modest, politically savvy recommendation. I have a hard time believing the District couldn’t do better.

* The measure DCFPI uses here is the same measure HUD uses for housing vouchers and certain grant programs. HUD’s affordability standard depends on household size. In 2007, the AMI for a DC-area three-person household was $85,100.

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