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.