Urban Institute’s series on DC’s population growth – Chapter 3. Housing

Urban Institute’s series

Chapter 3 Housing:

“It takes more than a thriving restaurant scene to sustain DC’s recent population boom. New residents also need somewhere to live. Increased demand has driven up the already high cost of homes and rentals and kicked off a surge of new construction. While the city is now prospering, these changes have made DC unaffordable for many residents, both current and new.

High housing costs have helped make DC one of the most expensive places in the country to live. Even at higher-income levels, many renters are paying more than 30 percent of their income on housing and some find homeownership out of reach. Lower-income residents, meanwhile, are getting further priced out of the market. Can the city meet the needs of its new generation of residents while also creating and preserving affordable housing at all income levels?”

From an email:

“A few highlights:

1. DC’s housing market much stronger than most US cities’. The DC housing market is so hot that during the housing crisis, prices didn’t fall. They just stabilized. It bucked the national trend. (Slide 2)

2. New units built for wealthier residents. New rental units are being built largely for people with considerable resources, less often for middle- and low-income residents. (Slide 3)

3. Millennials are driving many of these changes. They’re educated, and are making up more and more of the population. (Slide 4)

4. The population boom has been accompanied by a building boom. This animated map shows 12 years of residential real estate development. (Slide 5)”

Read the full report and see all the slides here.

3 Comment

  • In the face of rising demand from affluent, prices will only spike in the district.

    Seems the best we can do is:
    1) build lots more market rate housing- of course developers won’t rationally develop to the point where prices fall. But, increasing the supply of housing will put downward pressure on the existing stock. If we don’t build new “luxury housing”, affluent gentrifiers will simply bid up the prices of old houses. Plus, today’s luxury is tomorrow’s fixer upper.
    2) resist efforts to downzone areas- DC’s planning office is currently proposing to downzone lots of residential neighborhoods without any offsetting upzoning of other areas. Yeah, there will still be places left to build. But on net, this is going to put upward pressure on prices.
    3) fund affordable housing- new housing will be by definition expensive. Developers aren’t going to build “low cost affordable housing” given the high costs associated with developing new housing in the District. Personally, I’m not a fan of the IZ program for how it is structured. It is essentially a tax on something you want to incentivize “new housing” to create a small number of “affordable units” at very high costs in luxury buildings. IMO, a better policy would be a small general tax on all real estate in the city which is used to create affordable housing in a more cost effective manor (i.e. produces more units for the same amount of money) then IZ units.

  • I wish they would build more affordable housing in Hawaii, but asking for that is like asking someone to give up half of their paycheck… The same has happend in Beverly Hills and in Manhattan, it’s never gonna change. We live in a Capitalist society. Gotta embrace reality. All these government subsidized home affordability programs do nothing but their minimum obligations to keep the money flowing while the rich get richer. Work smart, not hard.

    • +1

      The same thing is happening in many US cities as the suburban migration reverses and people with money and education return to urban living.

      There will (still) be affordable housing in the suburbs, just as there is in new jersey, queens and staten island, and so on. Life will go on as it has in those other cities.

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