DC’s Disappearing Affordable Housing Stock

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Affordable Houing
What do New York, NY; Washington, DC; Denver, Colorado; Portland, Oregon; Chicago, Illinois; Cape Cod, MA and other major urban centers have in common across the county? Quickly google disappearing affordable housing to find news from these cities and more showing dwindling affordable housing. Due to shifting demographic trends, major urban centers around the country are seeing meteoric increases in property prices. However, at the same time there has been a decline in affordable housing stock despite repeated commitments from government officials to provide suitable housing for those in need. Additionally, in many of these same urban centers, and notably here in the district, there has been a marked increase in the numbers of homeless; both individuals and families.

These significant changes in demographic trends, which have been tracked as going back as far as 10 years, have been the subject of much debate, and many are catching on to its wide reaching implications. Shaun Donovan, current director of the Office of Management and Budget and former US Secretary of Housing and Urban Development, has actually called this the “worst rental affordability crisis that this country has known.”
Affordable for Whom?

Before going on with additional causes and what efforts are being undertaken to combat these recent trends, it might be helpful to define affordable housing. The current Area Median Income (or AMI) is a measure of the median income for the Greater Washington Area. One important thing to note is that this measure currently includes several counties that were highly ranked on a recent listing of wealthiest counties in the nation. Affordable housing units are typically defined as being affordable for a household making 60 percent of this AMI measure. Currently 60 percent of the AMI ($100,800) is $63,000.

A recent report from the DC Fiscal Policy Institute in 2012 found that since 2000 rents for one-bedroom apartments have risen by 50 percent. During that same time, DC has “lost more than half” of its low-cost rental units and 72 percent of its low value homes. Additionally, despite this area’s relative wealth compared to the rest of the country incomes have not kept pace with these additional increase in housing costs.

Perhaps the most striking reason behind the decrease in affordable housing can be found in a recent article by Aaron Weiner at the Washington City Paper. Weiner very pointedly makes clear that of all the different ways to provide affordable housing one of the most “prevalent” was the Low Income Housing Tax Credit program. For the class of affordable housing units which took advantage of this Tax credit program, property owners were required to “keep their rents below a specified level for 15 years.”

Many of these units are coming upon the end of this 15 year cap. Those units that have taken advantage of this tax program and can be found here: http://lihtc.huduser.org/.
From publicly available data, it can be determined that a great many of the affordable housing units will reach or have reached the end of the 15 year cap, at which point property owners will be free to raise the rents to match the surrounding market. This means that thousands of residents who currently are living in affordable housing will experience extreme hikes in their rent.
Lydia DePillis at the Washington Post presents another important consideration and that is capital. Her article “Why it’s so hard to find a cheap apartment in Washington, D.C.” provides the perspective from one of the city’s most powerful group of stakeholders: developers.

Toby Muzutto, profiled in the article and who works at a family owned development company, points out that in order for any major project to be green lighted, significant capital to support is required. Most investors are looking to invest in projects that will offer a sure return. This essential profit motive most often leads to projects that are not “affordable” but instead the pricier smaller units that are commonplace now in the district. The sort of housing units that are being built now are aptly called micro apartments.

And who are looking to buy these smaller, less formal, more communal, expensive housing units: Millennials. Millennials, who from the recent Nielsen, “Millennials – Breaking the Myth’s report,” were described as preferring to live in “mixed-use urban centers,” and are “less likely to own a car.” Also mentioned in the report was that Millennials were more willing to pay more than half of their income towards rent. These young adults who will not spend most of their time at home but prefer to be out socializing.

Knowing these striking figures and facts, what can local and state governments to prevent further declines in affordable housing stock? More important, what specific measures have Mayor Gray and the district council members done address this seeming crisis?

Given these recent shifts, Mayor Vincent Gray has committed towards building 10,000 affordable units by 2020. This particular use of “affordable” can be taken to mean not only those units that meet would be affordable for 80 percent of the AMI but also includes those at 30 percent. Fortunately Mayor Gray is already halfway towards his goal with 5,938 units that are being built or preserved.
Many, however, find the Mayor’s actions (and DC council’s actions for that matter) to be lacking and have turned to other means to address the problems with affordable housing. Some will point to the fact that currently there are 70,000 individuals who are on the waiting list to receive public housing in the district (this list which has since been closed because of its length).
One of those alternatives is the non-profit ONE DC. ONE DC is an organization that has over the last 5 years worked solely towards the goal of building community members to fight against the loss of affordable housing and what many would consider underhanded techniques by members of the DC council to hide the issue. Currently they are working here and here to get this done. ONE DC has created an entire platform to combat these recent changes.

Some of the key goals of their platform include: community control over land use, Development without displacement, permanent housing affordability, community and family stability, community and family wealth creation. Also included in the platform is the recommendation that the definition for affordable be reduced to somewhere around 30 percent of the AMI.

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