Availability of affordable housing declines in DC
Change in the number of Affordable versus High-value homes, 2000-2004 (affordable defined as $150,000 or less, high-value as $500,000 or more.) Source: DC Fiscal Policy Institute.
The DC Fiscal Policy Institute has released a report, "New Census Data Show That DC's Affordable Housing Crisis is Worsening," analyzing recently released Census data. (This report is also discussed in today's Washington Post, in the article "Number of D.C. Affordable Housing Units Plunge: Officials Urged to Offset Effects of Soaring Rents, Home Prices.")
While there were only slight changes over the past two years in the city's overall income and poverty demographics, there were unprecedented increases in rents and housing values and a reduction in the city’s stock of affordable housing.
This makes perfect sense.
Washington is a strong real estate market, because of location, low mortgage interest rates (an ironic result of a middling national economy, which because of reduced demand for investment and loans results in lower interest rates), and what appears to be a marginal increase in demand for urban living, at least in this city.
Unlike similar increases in demand for urban living in places like Philadelphia's Center City, which is fueled by property tax recission for multiple years for new housing brought to market or in close-in neighborhoods in Baltimore, most parts of these cities still experience population loss and building stock abandonment.
Yet, in DC this increase in demand is obtaining city-wide, including neighborhoods such as Deanwood where you would likely not expect an influx of new younger homeowners. Even with the addition of new construction, and the rehabilitation of previously vacant properties, as more dwelling units are converted from rental units to owner-occupied abodes, displacement increases.
The analysis by the DC Fiscal Policy Institute found the following:
· Median rent increased by nine percent — from $734 in 2003 to $799 in 2004.
· DC lost 2,400 affordable rentals while gaining 4,600 high-cost rentals.
· A similar trend existed among owner-occupied units, with median home values increasing by 32 percent.
· Rising home values fueled a loss of 9,400 affordable compared to a gained of 10,800 high-value homes.
· The affordability gap — the gap between the number of affordable units and the number of low-income households who need them — actually shrank between 2003 and 2004, as the number of low-income households fell. Nevertheless, this gap was still significantly higher than it was in 2000, with some 20,000 more low-income renting households than there were rental units to accommodate them.
DCFPI recommends that "while the District is considering a number of policies to address the city’s affordable housing crisis, housing burdens are still concentrated among the lowest-income residents and limited resources should focus on the neediest households."
This makes sense also. Earlier in the year, USA Today and other newspapers reported on the work of Columbia University Professor Lance Freeman, and his findings that overall improving neighborhoods in NYC didn't really experience the kind of displacement expected as a result of new investment, increased demand, and an influx of higher-income residents.
Many people call this process "gentrification." I do not because I think that word is often politically charged and is used for broadbrush criticism without closely analyzing the various impacts of neighborhood change and the ebb and flow or cycle of neighborhoood change that cities experience. My take on this is discussed in the entry "More about Contested Space--'Gentrification'".
I wrote about Freeman's work in this blog entry,"Gentrification article in USA Today", and made the point that one reason that people weren't being displaced is because they dedicated a greater proportion of their income stream, upwards of 70%, to pay for housing. (This is the link to the USA Today article: Gentrification a boost for everyone: Researchers say changes to poor neighborhoods encourage people to stay.)
The Frozen Tropics blog alerts us to new research that looks more carefully into the data analyzed by Freeman, and draws some important conclusions that explain the "failure" to find displacement. The paper, "Gentrification and Resistance in New York City," makes many good points including this:
Those who remain, by and large, receive some form of private or public assistance. Rent regulation is the most frequently cited form of support. It is followed by a suite of programs that includes public housing, housing vouchers, an exemption from rent increases for senior citizens, project-based Section 8 and a state version of the latter. Homeowners of one to three-family properties are protected by low tax rates for homeowners and a property tax cap.
New York City in particular has a variety of housing support programs that most other jurisdictions do not. DC's rent control laws do not compare to NYC's. (For another take on NYC see "Housing Boom Echoes in All Corners of the City.")
In any case, a comprehensive approach to this issue is in order. Truly "Growing an Inclusive City," the moniker attached to the Comprehensive Plan Revision Process, requires community-rebuilding in a wide variety of forms.
Recently, the New York Times reported in the article, "Coming Full Circle, City to Sell Blighted Lots," that in New York City, the inventory of city-owned property is drying up. But the article also mentions that over time, in selling this property that policies have encouraged the development of goodly amounts of affordable housing (not merely a small percentage of properties, but entire properties) in part by providing access to low-cost funds (similar perhaps to how the DC Housing Production Trust Fund can be used) and low-cost or even free land (provided that performance objectives are realized).
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