DC Rents Way Out of Reach for Low-Income Households

We’ll learn next week what Mayor Gray plans to do about the affordable housing shortage in the District of Columbia.

We know he’s promised a one-time $100 million investment, but we’ll need his budget proposals to learn where the money would go — and if that’s all he’ll commit to.

The latest annual rental housing (un)affordability report from the National Low Income Housing Coalition provides a useful set of figures indicating needs in the District, as well as in each state and the nation as a whole.

If they don’t create a sense of urgency, I don’t know what will.

As I explained last year, NLIHC uses several set of figures — most of them drawn from federal sources — to arrive at what it calls a housing wage. This is the amount a renter would have to earn to afford a modest two-bedroom apartment, plus basic utilities in each jurisdiction.

The cost of the apartment is the U.S. Housing and Urban Development’s fair market rent estimate. The standard for affordability is the usual 30% of gross income.

NLIHC also does some calculations based on the applicable minimum wage — $8.25 in the District — and the average wage of renters in each jurisdiction.

Not surprisingly, the two-bedroom apartment is way out of reach for low-wage workers in the District — considerably further out of reach than for low-wage workers nationwide.

The same is apparently true for many other D.C. renters, since their average wage falls shorter as well.

Here first are the big picture numbers.

  • A household would have to have earnings totaling $4,707 a month — $56,480 a year — to afford the two-bedroom apartment in the District.
  • Assuming full-time, year round work, this translates into a housing wage of $27.15 an hour — a higher housing wage than for any state except Hawaii, though somewhat lower than for any of the top 10 metro areas, according to dcist .
  • The average renter wage here is $102 less per month than what would make the apartment affordable — an annual shortfall of $1,224.

And now the truly bad news figures for low-income District residents.

  • The two-bedroom apartment costs $607 a month more than would be affordable for an extremely low-income household, i.e., one whose income is at or below 30% of the median for the area.*
  • The apartment costs $983 a month more than a full-time minimum wage worker can afford.
  • So s/he would have to work 132 hours a week, every week to afford it — or live with three other full-time minimum wage workers and another working part-time.
  • This is 28 hours a week more than what NLIHC calculates for minimum wage workers nationwide, though it uses the lower federal minimum for them.
  • For residents who depend on Supplemental Security Income, the apartment costs a mind-blowing $1,199 more than would be affordable.

The story in the District is in many ways like the story NLIHC tells for the nation as a whole. The number of renter households has increased. Vacant apartments are scarce, creating the usual supply-demand pressure on costs.

But the supply side is also affected by the upscaling of once-affordable rental housing — and the fact that most new construction is also for fairly well-off households that, at least for now, prefer renting to owning.

This is how the free market works. It’s why we need public investments to create and preserve housing that’s affordable for low-income households.

And why we need vouchers that will enable others to live in market-rate units without spending more than half their income for rent, as nearly two-thirds of extremely low-income households in the District do.

The District has the revenues to make living in this high-cost city affordable for residents who haven’t shared in the prosperity those revenues indicate — that’s in fact made rents even less affordable for them.

It will have to choose to make ongoing commitments — and to target a very significant portion to its lowest-income residents who are homeless now or at high risk because they really can’t afford the rent they’re paying.

The Mayor says he’s worried that his One City will become “a city of only ‘haves’.” Let’s see what he does to make it more genuinely “inclusive” of the have-nots.

* According to the estimate NLIHC uses, this would be a maximum of $32,190.

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10 Responses to DC Rents Way Out of Reach for Low-Income Households

  1. [...] Kathryn Baer has contributed this brief adaptation of a post on her Poverty and Policy [...]

  2. RICHARD DEMUTH says:

    As someone who has experienced several periods of homelessness, I think the solution is MORE public housing facilities!

  3. Kathryn Baer says:

    Thank you for this insight, Richard. I’m curious why you would prefer more public housing facilities over vouchers that make moderately-priced units in regular apartment buildings (or houses) affordable.

  4. Frances says:

    It’s true that most apartment rentals DC are way beyond the league of low-income families. And I agree that it’s either they add more public housing or they start developing apartments.for low income families (which is pretty much the same, actually)

  5. Kathryn Baer says:

    Support for more affordable housing development would certainly help. So would support for preserving such affordable housing as we have. A third solution (in addition to, not instead of) is to provide more vouchers that low-income households can use to help pay market-rate rents.

    Mayor Gray is proposing more funds for affordable housing development and preservation, but not for locally-funded housing vouchers. We need to persuade the DC Council to add funding for these too.

  6. Chassidy says:

    I do not leave a response, however I looked at a few of the
    responses here DC Rents Way Out of Reach for Low-Income Households |
    Poverty & Policy. I do have 2 questions for you if you
    do not mind. Could it be just me or does it give the
    impression like a few of the responses appear like they are left by brain dead individuals? :-P And, if you are writing on additional social sites, I would like to keep
    up with you. Could you make a list of every
    one of all your social community pages like your twitter feed, Facebook page or linkedin profile?

  7. Kathryn Baer says:

    I have removed the URL you included, since it linked to a totally unrelated product promotion. You will find a button for my Twitter feed on the home page of my blog. My Facebook page and LinkedIn profile are easily found with a search on my name.

  8. 365 bet ton says:

    Hey just wanted to give you a quick heads up.
    The words in your article seem to be running off
    the screen in Firefox. I’m not sure if this is a formatting issue or something to do with browser compatibility but I figured I’d post to let you know.
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  9. Kathryn Baer says:

    The problem is with the latest version of Firefox.

  10. Kathryn Baer says:

    The problem is with the latest version of Firefox. I have screen size problems on some sites too.

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