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Affordable rents in the DC region are disappearing fast; a recent report notes that half the number of low cost units available today than there were a decade ago. Rents are soaring as jobs continue to attract more people to our region and an explosion of new residential buildings feeds a mostly high-end market. Some say government needs to step in to ensure housing for everyone. We explore what’s happening in the rental market, and how it affects all of our neighborhoods.
- Jenny Reed Policy Analyst, DC Fiscal Policy Institute
- Lydia DePillis Staff writer, Washington City Paper
- Matt Losak Executive Director, The Montgomery County Renters Alliance, Inc.
- Lisa Sturtevant Director, Office of Housing Policy Research, Center for Regional Analysis; Assistant Research Professor, George Mason University
MR. MARC FISHERFrom WAMU 88.5 at American University in Washington, welcome to "The Kojo Nnamdi Show," connecting your community with the world. I'm Marc Fisher, sitting in for Kojo. Coming up this hour, are there any affordable apartments left in our area? As high-end luxury buildings pop up all over and more people flock here for jobs, rents are soaring. Even in the District where many older apartments are still rent controlled, low-cost options are disappearing fast.
MR. MARC FISHEROur area has lost half of the affordable units available a decade ago. Some say government needs to step in to ensure there's housing for everyone and to protect tenants in a tough rental market. Others say the market is working, and cranes that are visible all over the city are proof. Joining us to discuss the housing situation in the area, Lydia DePillis is a reporter who writes the "Housing Complex" blog for the Washington City Paper.
MR. MARC FISHERLisa Sturtevant is a researcher and assistant research professor at the Center for Regional Analysis at George Mason University. And Jenny Reed is a policy analyst at the D.C. Fiscal Policy Institute, which just published a report about the high rents in the District. And, Jenny, tell us what are the headlines from that report.
MS. JENNY REEDWell, our report found that affordable housing in D.C. is just vanishing. Over the last decade, D.C. lost half of its low-cost rental units and more than 70 percent of its low-value homes, so affordable housing options in D.C. are just drying up very rapidly.
FISHERAnd why is that happening?
REEDA lot of it has to do with increased demand. More and more people want to live in D.C. We saw a huge increase in population in the recession as a result of people flocking here for jobs, and that has just put an upward pressure on prices. You know, rents have risen by more than 50 percent over the last decade. And the incomes of a lot of households, especially low- and moderate-income households, are not keeping pace.
FISHERAnd is this happening -- is this related at all to the mortgage crisis and the recession? Or would this be happening just as a matter of natural growth in the District?
REEDI think the recession plays into it in some respects. People are somewhat hesitant to go buy houses right now. I think they're a little concerned about the housing market in the wake of the bust. And so you find more and more people are flocking to rental units now, and that's certainly putting a pressure on prices.
FISHERAnd when we talk about affordable housing, what are we really talking about? Give us some dollar figures.
REEDSure. Well, our report looked at -- for low-cost rental units, a unit costing $750 or less, that would be affordable to someone making about $14 an hour.
FISHERSo -- and I think it was in your report that I read that we now have more people spending more than half their income on housing than probably ever before.
REEDYes. That's an unfortunate consequence of the rising prices and the stagnant incomes. Our report found that 15,000 more D.C. households now pay more than half of their income on housing. And for low- and moderate-income families, this can be a real problem because it means that, when housing eats up almost their entire paycheck, they have little left over each month for other basic necessities, like food and transportation.
FISHERLisa Sturtevant, is this a purely Washington story? Is it a city story, or is this -- do we see this happening in suburbs such as Northern Virginia and suburban Maryland?
PROF. LISA STURTEVANTYeah, so this difficulty in finding affordable rental property is certainly extreme in the District, but it's not confined to the District of Columbia. When you look at some of the closer-in suburban jurisdictions, particularly in North Arlington and the city of Alexandria, inside the Beltway Montgomery County, you're finding the same pressures on rental housing where new properties are being developed to meet demand of higher wage workers who are coming to the region, and they're displacing these lower-cost housing units.
FISHERLydia DePillis, you've written about the housing situation in the District for a long time. Do you see at the street level a kind of pain or desperation that's qualitatively different from what was true years ago?
MS. LYDIA DEPILLISI haven't been here for that long...
DEPILLIS...so only about three years. I think that it's particularly pronounced this year. We saw a real dramatic spike in family homelessness that had the city putting up people in hotels, had our shelters overflowing. And that's a consequence of people who are -- don't fit in the public housing options available to them through government means and can't make it into the rental market 'cause they -- there's just not enough affordable units available.
FISHERAnd, Lisa, what are some of the pressures that are driving rents up in this area?
STURTEVANTWell, as was mentioned, you know, the Washington area was one of the few places across the country that was growing jobs as we recovered from the recession. So in 2007, 2008, 2009, the Washington metro area was the only one of the large major metropolitan areas that actually added jobs over those periods. And so people were flocking to the metro area to take advantage of those jobs.
STURTEVANTAnd so you are finding increased demand from in-migrants. You are finding, as was suggested, people having a preference for renting because of the unavailability or the difficulty in getting credit. And you are finding people having a preference to move closer in, which is why we see these pressures in D.C. and inside the suburbs. And so we were sort of, in this way, a victim of our own prosperity there following the recession where we were the place to be. And this is where people were coming. And as a result, we saw rents go up.
FISHERAnd that's still happening.
STURTEVANTAnd that's still happening, although to a somewhat lesser extent. There's -- most of the other major metropolitan areas across the country now are adding jobs. And, in fact, places like Houston and Austin and even New York are outpacing us in terms of job growth.
FISHERYou can join our conversation about housing in the Washington area by calling 1-800-433-8850 or email us at kojo, K-O-J-O, @wamu.org. You can also send a tweet to @kojoshow. If you rent, has your rent gone way up over the last few years? What's your take on the soaring number of luxury units that are going up in Washington and the region?
FISHERAnd what should be done to keep a supply of affordable apartments on the market? Give us a call and tell us your view. Jenny Reed, is there a -- one or two policy recommendations that you've come up with that you think could really ease the supply of affordable housing in the District?
REEDThere are many things that the District can do. And I think it's important to put out there that there are a range of affordable housing needs, a pretty wide range. And so it's really important that you have a wide variety of tools to meet those needs. So one of the tools that the District has, that's been very successful, is the Housing Production Trust Fund. This is a fund supported by a percentage of deed recordation and transfer taxes, and what it helps do is provide financing to both for-profit and non-profit developers to build affordable housing along a big range of affordability.
REEDSince the early 2000s, the trust fund has built or rehabilitated over 7,000 units of affordable housing. And it's one of our main tools that we have here. Now, in the recession, it's taken a big hit because, since it's supported by taxes that are generated when properties are sold, when the housing market tanked, so did the money into the trust fund. And so that has really limited what the District could do. In addition, there's been...
FISHERSo it's sort of a mechanism that works least effectively when it's most needed.
REEDWell, exactly. That's one of the unfortunate aspects to the way it's currently financed. But also in the last couple of years, there's been significant cuts proposed to the trust fund. In fact, there's a $20 million cut that the council in the fiscal year '13 budget that the council is debating right now, and that trust fund could really use that money. As it was mentioned, it's hard to get credit right now to build affordable housing, and that money could go a long way to building thousands of affordable units.
FISHERBut, Lydia DePillis, there's always in tough times an ever greater need for public investment at the same time as those tough times to bring about a decrease in public investment. Have you seen any mechanism in the District that does seem to show promise for creating more affordable units at a time when the increase in luxury units tends to diminish the number of affordable units?
DEPILLISRight. So, actually, I mean, to correct a little bit of a misperception like the increase in luxury affordable -- or luxury housing units doesn't necessarily decrease the number of affordable ones, as Jenny mentioned, like sales of properties. So purchase of high-priced condos generates money that could be used to generate more low-income housing. And having, you know, so a greater tax base is actually a good thing.
DEPILLISBut, yes, one of the things I've talked about a lot is the fact that we can increase the density of our housing through allowing people to subdivide their properties or their row houses so that more people can pack into a smaller space or put accessory dwelling units in their backyards. That's something that's in progress right now through the zoning code rewrite. So there's lots of private market ways to increase our supply, as well as public investment that does tend to shrink when the government doesn't have a lot of money to spend.
FISHERAnd the situation is -- well, maybe this is unfair. But is the situation in part due to this -- of the city's own making in that the city politicians routinely cave in to neighborhood activists who don't want more density, to folks who are allergic to the concept of greater height of buildings? This whole question of density, it would seem, would be one solution to the affordable housing problem, is to build more the available land.
DEPILLISYeah. I mean, the District is struggling with its identity a little bit, and that there are people who see it as a low-rise, low-density quiet place, like a sleepy Southern town, as we've always said that it is. And there are some imperatives, though, that have to do with the number of people who want to move in here and the changing lifestyles of a younger generation. And so that does play out in zoning disputes and in, you know, it's -- it really shouldn't be going through the political process.
DEPILLISA ward councilmember shouldn't be able to kill a housing development because people have a problem with it. That is sometimes how it works. But -- and, yes, and the height of buildings is something that we don't have full control over.
FISHERAnd, Lisa Sturtevant, in -- I know Montgomery County has taken a different approach in that they are -- they've always -- or for a long time now have required builders to include a certain percentage of affordable units in any development that they do. Is that working, and does it have promise for the District?
STURTEVANTYes. So Montgomery County has one of the nation's longest running programs requiring affordable units 12.5 percent generally to be included as part of any new development. In addition, they've taken on what a lot of other jurisdictions have, is when bonus density that is as we were suggesting increases the number of housing units that a developer can build in exchange for increasing the number of units affordable in the property.
STURTEVANTThat's common in a lot of jurisdictions. For example, in Arlington County, this idea of negotiating with developers to allow for increased density in places that are, you know, deemed appropriate by the county's land use plan in exchange for inclusion of units that are affordable at certain levels of income.
FISHERLet's hear from Terrance in Germantown. Terrance, you're on the air.
TERRANCEWell, I guess, I don't know if I'm unique because I've moved from a -- from living in my parents' four-bedroom apartment in the Silver Spring-Wheaton area out towards the Gaithersburg area back in 2002. And back then, a one-bedroom apartment with gas, heat and everything else cost about $900. Now, I'm living in Germantown, the same one-bedroom apartment, same size, probably goes for about $1,200. That's just over the course of the last 10 or 11 years.
REEDWell, I don't think that you're in a unique position. I think that, you know, rents have risen rapidly here in D.C. and, as we heard, throughout the region. And one of the problems is that the cost of housing are just rising far faster than the incomes of most people, especially for those in the low- and moderate-income range. And so that just means they're further and further priced out.
STURTEVANTWell, and I would also say that, you know, housing -- we're talking about housing today, but you really can't talk about housing without talking about transportation. And so the cost of commuting from a place like Gaithersburg or Germantown, if you work downtown, has also gone up. And so it's -- that $900 to $1,200 increase, that's not the whole story. There's other costs that have gone up at the same time.
TERRANCEWell, I can add to that.
TERRANCEI used to work in Bethesda -- downtown Bethesda, and when my employer was acquired by Capital One Bank, we moved out to McLean, Va. It's actually, believe it or not, it's surprising. It's an easier commute 'cause you can just go from the interstate to the interstate, and you're right there at Tysons Corner. In the old days, you had to get off the interstate, drive through the medical center -- don't get me started.
TERRANCEBut by train, it's a two-hour commute, no matter what.
FISHEROK. Well, transportation is at the heart of a lot of housing decisions and a lot of decisions by developers. Jenny, as you look at the increased rents in the city, who is losing out demographically and where are those people going?
REEDWell, I think that we have all heard about a lot of people being priced out of the city and moving to some of the suburbs. We don't know exactly where people are leaving to. But we do know that for low- and moderate-income residents, as a lot of these neighborhoods that used to be affordable develop, they become unaffordable and people get displaced.
STURTEVANTOh, and just to add to that, too, I recently looked actually at the locations that out-migrants go to when they've left the District of Columbia between 2006 and 2010 as part of a larger research project. And there has been a historic flow of African-American residents between Prince George's County and the District of Columbia.
STURTEVANTAnd you see this emphasized in this period of potential housing displacement in the District that low- and moderate-income African-American households have made this movement into Prince George's County at very, very fast rates over the last four years. And Prince George's County's housing market is still in difficult time, so sort of all the new residents coming in are facing different challenges as they move into Prince George's.
FISHERWhen we come back after a short break, we'll hear more of your calls about your own rental experiences, as well as getting into the whole question of what the impact of the recession has been on the building of new housing in the Washington area. I'm Marc Fisher. This is "The Kojo Nnamdi Show."
FISHERWelcome back. I'm Marc Fisher, sitting in for Kojo Nnamdi, and we are talking about housing in Washington and the surrounding area with Lisa Sturtevant of George Mason University, Lydia DePillis of the Washington City Paper and Jenny Reed of the D.C. Fiscal Policy Institute. You can join our conversation by calling 1-800-433-8850, or email us at firstname.lastname@example.org. And, Jenny Reed, there has been, since the beginning of the recession, obviously, a huge impact on home building around the country.
FISHERAnd yet any visitor to Washington is immediately struck these days by the number of construction cranes, and they're focused particularly downtown and in a couple of neighborhoods. But what do these cranes actually represent now? Who is building? What are they building, and who are they building it for?
REEDWell, there was a stall in building right when the recession hit. Nothing was getting out of the ground. And, recently, we have seen buildings start to go up again. A lot of the buildings seem to be apartment buildings and seem to be building towards higher income households. A lot of the rents are over $1,000 just for a one-bedroom unit, or even a studio. So for low- and moderate-income residents, housing by the private market isn't being built for them.
FISHERAnd, Lydia DePillis, not that many years ago when Tony Williams was mayor, he presented this new vision of a city where there wouldn't be necessarily a rich neighborhood here or a poor neighborhood there. But rather he fostered this notion of mixed-income communities. He started to build some of them. A couple of them are still under construction. Is that catching on? Is that really the wave of the future, or is this push for luxury housing kind of pushing all those ideas out of the picture?
DEPILLISNo, it's still very much in the picture. There's a few big developments still underway. You see up at Park Morton and Petworth. Several of those buildings have substantial affordable component. They're going to get started on Barry Farms pretty soon and right near Anacostia. So that's part of the plan. It's only on sort of historic government-owned land, though, and former public housing projects.
DEPILLISThere are -- you know, another big one, Capper/Carrollsburg down in -- by the ballpark got somewhat stalled in that they don't have enough money right now to build the rest of the low-income housing. That got demolished (word?).
FISHERBut there are hundreds of townhouses being built right near the stadium in the Capper/Carrollsburg project. And I wonder if someone were re-conceiving that today, given the opening of the U.S. Department of Transportation down there, the ballpark, some of the new office buildings, whether they would really have gone ahead with a low-rise project like that or whether we would have seen a much larger number of high-rise buildings.
DEPILLISPerhaps, I mean, I think that also what makes Washington attractive is the diversity of housing type. So if you had a ton of high-rise buildings all next to each other, it's nice to have, like, a few low-rise houses as well because not everybody wants the same thing.
FISHERLet's hear from Rachel in Silver Spring. Rachel, you're on the air.
RACHELOh, thank you very much. My issue that I wanted to raise is that -- whereas I think it's wonderful that there are a lot of programs for families and I don't want to see families on the street, my situation was that when the recession hit and I lost a job, I first could not find any assistance for keeping my house. They said, gee, if you had kids, we could help you. And then when I was looking for various housing programs for low-income people, really, they just came right out and said, you know, we focus on families.
RACHELAnd there are a lot of working people that -- single, you know, people of all ages who just don't have options. And the one really good program that's out there, the In-House Section 8 in Montgomery County, that is available in a lot of apartment units, I was told when I first started looking into that that one-bedrooms are -- you know, they just don't really have a lot of one-bedrooms for the program 'cause there's so little call for it.
FISHEROk. Lisa Sturtevant, is there a shortage of available units for single people?
STURTEVANTWell, I think what the caller raised is the important point is that there's a shortage of housing for everybody. So when she emphasized that a lot of the programs that she's encountered are for families, that's true, and there is a need for housing among families. But there's a need for housing for the whole spectrum of our workforce, for our seniors.
STURTEVANTAnd as we completed a study last fall that anticipated the housing demand that would be needed over the next 20 years, the region needs three-quarters of a million new housing units over the next 20 years. And some of them need to be under $600. And some of them need to be three bedrooms for families. And some of them need to be the types of housing that the caller needs, is relatively affordable housing, for single people. So what she emphasized is this need for housing for the whole spectrum of our population.
FISHERAnd given the pent-up demand -- I mean, one impact of the recession has been that a lot of young people are moving back in with their parents or living with unrelated roommates, and so there has not been nearly the household formation that there -- we'd become accustomed to in past decades. So is that going to produce a pent-up demand that then explodes on to the scene a few years down the road?
STURTEVANTOh, there's definitely pent-up demand, and we're starting to see some of it loosen up a little bit. And that's -- those are some of the people who are demanding those units in the District of Columbia. There are people who are, as you suggest, living with roommates when they'd rather be living on their own, living with families when they'd rather be on their own, and that is starting to loosen up and will continue to do so over the next few years.
FISHERAnd we have a comment on our website that says, "I'd like for your guest to discuss more about the limitations on density and height. I wouldn't want a 15-story building on H Street Northeast or in Georgetown. But if you look at Dupont, Farragut, Columbia Heights and other parts of downtown, it could easily use an extra five to 10 stories, and that would do wonders to lower rents." Lydia, would it?
DEPILLISYeah, it's funny because everyone wouldn't like to see a 15-story building in their neighborhood -- not everybody. But there's a lot of people who say that about every neighborhood. And they say, you know, put it in Tenleytown. Generally, we like to increase density around Metro stations. That makes the most sense. People are willing to pay something like 30 percent more to live near transit.
DEPILLISBut -- so not only do we have -- as far as density and height restrictions, everyone knows we have a federal height restriction that caps heights at 120 feet maximum. In most places, it's somewhat lower, and then the District itself has zoning regulations that keep buildings even shorter. And so I think a lot of those do deserve to be revisited to allow developers to build where it makes most sense for them and for the people who want to buy their housing.
FISHERThe listener talks about additional height downtown, but another proposal that has come up is to exclude downtown and the whole federal core of the city. Keep the height restriction there, and instead allow greater height in the fringes of the city so as to compete with suburban jurisdictions that have no such restrictions. Jenny Reed, would that go a long way at all toward fixing some of the housing issues?
REEDWell, I certainly think we need to look at supply because as Lisa's study showed, the District is expected to add something between 40- and 120,000 jobs and housing units, needs housing units for those jobs over the next 30 years. And with the, you know, limited amount of land and constraints, it's hard to see how we would build those many units that quickly. And that will certainly put pressure on prices.
REEDBut at the same time, building more supply may help reduce some of the pressure on the rent, but we are still going to need programs that really help bring the rents down to what low- and moderate-income residents can afford, to really bridge that gap between what it costs to build housing and some of the low wages that people are paid.
FISHERThe last caller brought up the question of supply of housing for single people, but there's been a big issue in the city about whether there's sufficient housing available for families, especially in new construction. And, Lydia, a lot of this luxury housing that's going up, they're really quite small units.
DEPILLISThat's true. The easy money right now is in tiny apartments that your young, wealthy, single people live in -- not wealthy, but people who don't have a lot of other obligations for their paycheck. So that's definitely true.
FISHERAnd so that's, in a way, kind of delaying the problem a few years because when those people get a little older, want more space, or perhaps have children, they have different needs. And, Lisa Sturtevant, where do they go?
STURTEVANTWell, that's the big question right now. You know, D.C. is hot right now. Everybody wants to live in the District of Columbia. And we look at these 20 and 30-somethings and the question I ask is, what happens when they get married and have that first kid? Are they going to abandon the city for the suburbs, as has been typical? Or is this part of a new wave in the District of maintaining families in the city? And, if so, having larger units is essential for keeping families in the city.
FISHERLet's hear from Bryan in Falls Church, Va. Bryan, you're on the air.
BRYANHi. Thanks for taking my call. I have, I guess, a question. Your guests have already responded to it a little bit about the supply of houses for certain types of people in the District. And, you know, I'm actually sitting at the corner of Gallows Road and Lee Highway right now looking at two new mixed-use buildings going up.
BRYANAnd I can just tell looking at them that not one unit in there is going to be affordable. And so I'm curious why the excess supply of these, you know, luxury units that are very expensive, why doesn't the excess supply doesn't drive the price down? Because it seems like there's a lot that sits empty.
STURTEVANTYou're suggesting -- Well, I'm not sure that we're finding a lot of rental apartments that are sitting empty right now. Our vacancy rates are pretty low. And are you -- and I assume you're out at Merrifield. And some of the development that's going on at Merrifield and Fairfax County, like most other jurisdictions, does include affordable housing as part of new developments that come online. So there will be some affordable units in that development.
STURTEVANTAnd -- but the larger question you're asking, too, is, I mean, if economics works, if we increase supply, that should bring prices down. But, you know, demand has just been so strong over the last four years that the supply just hasn't been sufficient to meet that demand.
FISHERThanks for the call, Bryan. And here's Carl in Washington. Carl, you're on the air.
CARLHi. One of the housing problems in the District, of course, is addiction. And the District has a law against putting people's goods out on the street, their furniture and such when they're evicted. But there is no money to enforce it. It was taken out of the budget a couple of years ago. And I wondered if either of the -- of your panelists was aware of the issue of non-enforcement and the problem associated with street evictions.
FISHERWell, to -- we're joined at this point by Matt Losak. He's executive director of the Montgomery County Renters Alliance. And you've certainly had to deal with the evictions question. What is the -- what rights do that -- do renters have?
MR. MATT LOSAKWell, in Montgomery County, very few. In listening to the panel discussion here, we are looking forward to having the kinds of tenant advocacy infrastructure that Washington, D.C. has. Imperfect as it may be, there's an Office of the Tenant Advocate in Washington, D.C. There's a very active and aggressive tenants association in Washington, D.C. And there's a long history of rent stabilization back and forth, up and down, not perfect, but it exists.
MR. MATT LOSAKIn Montgomery County and in Northern Virginia, there is a vacuum of rent stabilization just 'cause eviction law and other types of policies that protect renters. Our approach is to look at this rather than simply as a market issue while there was certainly merit in that argument. But it's also a public policy issue in terms of balancing the market with social needs. Housing is not the same thing as beer and cigarettes, and it should not be priced at whatever the market will bear.
MR. MATT LOSAKIt also has an obligation to begin pricing rents at -- in a way that keeps the community stable, allows people to stay in their apartments for a long periods of time, if not the rest of their life. And I think that the trends in housing and renting bear out that more and more people are renting and intending to rent for greater periods of time if not the rest of their life. As for evictions, we have some real horror stories occurring in Montgomery County because there is an absence of just cause eviction law.
FISHERWhat is that? What is just cause?
LOSAKSimply stated, in Washington, for example, if you are a good tenant and you obey the rules, a landlord who continues to rent his apartment must renew your lease year-in and year-out under the same conditions with the slight adjustments of a possible rent increase, a reasonable one, we hope. In Montgomery County, you can be a senior who is retired teacher at 65, you move into your apartment 10 years later, now you're 75, but you've been complaining about the garbage in your basement.
LOSAKBut the landlord will not say that that's why he's not renewing your lease. He will simply say, we are not renewing your lease, with only 60 days notice. A landlord can say, no matter how long you've been in the building, for no reason at all, that we will not renew your lease with only 60 days notice. This puts a lot of fear in the hearts of renters not only in Montgomery County but imagine wherever there are no renter protections.
FISHERAnd, Lisa Sturtevant, is there -- suburbs kind of grew up as places that were dominated by homeowners. They may not have the same political history as far as rent protection, rent control, rent stabilization, all of this complex series of regulations that cities tend to have. Are suburbs kind of behind on that question?
STURTEVANTThey may be, and I think that the important thing to talk about is, you know, as was suggested, this idea of housing as a social need, the importance of stability of communities. And I would also argue that homeowners need to hear this fact that having a community with diverse incomes is also good for homeowners.
STURTEVANTIt allows you to have workers in your community that can work at your drycleaners or who can pour your coffee or who can teach your children. And if we don't maintain policies that keep us a spectrum of housing affordable to all types of workers in the community, you're not going to have a drycleaner. You're going to pay $6 for a cup of coffee.
FISHERAnd you're going to have a lot more traffic on the road...
STURTEVANTAnd a lot more traffic.
FISHER...because you're going to have all of those people who serve as jobs driving in from Frederick or Clark Country, Va.
DEPILLISI think it's important...
DEPILLIS...to point out that, like, not all renters are service workers. I mean, like, increasing number of people are renting as a choice as opposed to buying because it allows them to be more flexible. And not a lot of people stay in the same job forever anymore. You don't want to be -- you know, a lot of people ended up upside down in their homes, and that was a lesson that a lot of people learned.
FISHERAnd that is happening both at the beginning of a career and at the latter stages of a career, a lot of people downsizing and more affluent folks moving into rental housing...
LOSAKThe Washington Post last year wrote an extensive article on the trend of people going into rental housing now because the math just didn't add up for owning a house the way it does for renting. I think for a lot of reasons, the increase in the senior population is another factor, where owning a house and the obligations for owning a house, in addition to the mathematics, may be just more than what people are willing to do.
LOSAKAnd so rental housing becomes a good option for them. I -- to this point that renters should not be seen as sort of this lower class of economic strata, it's not true. Our organization represents renters who are paying, you know, many thousands of dollars a month for luxury apartments. But they don't want to see their rents go up 10, 20 and 30 percent a year any more than somebody who's paying $1,300 a month for a one-bedroom.
FISHERYou know, we're getting a number of emails and tweets from people who want to hear from the panel on the question of just how difficult it's become to get apartments and what you have to go through to get an apartment. A tweet from Jimmy Clue (sp?) is saying, "I rent in Alexandria and had to offer more than requested to obtain the lease over other potential renters." An email from Jessica in Washington, saying she lives on 14th Street Northwest near U Street, which -- where there have been a huge increase in the construction of luxury condos and apartments in the last few months.
FISHERShe lives in an existing apartment where the rent was fairly expensive in comparison to where she used to live. She just got a renewal -- a request for renewal of her lease, and the price will go up about $350 a month, which she cannot afford. "I would have thought that with all the new construction, prices would have gone down," she says, "or at least stayed the same. Why are existing rents rising when there's so much competition?" Jenny?
REEDWell, I think it's just because of that. There is so much competition. There is so much demand for rental housing in D.C. right now that apartments -- when I first moved into the District in 2003, if you didn't go see an apartment advertised on Craigslist that day, you probably weren't going to go get it. So it -- and I imagine it's just 10 times harder right now. So it's very competitive out there, and that makes it, I guess, if I could say, a landlord's market, where, you know, they can charge more. They can ask for extras just to rent out these apartments.
DEPILLISWell, I would, first, also just say that most of that capacity hasn't quite come online yet on 14th Street. Those buildings are done. So let's see what happens when they try to lease them. The other thing is that those areas have just become a lot more desirable. There's a lot more amenities there, so you're going to see a corresponding increase.
FISHERLydia DePillis writes the "Housing Complex" blog for Washington City Paper. Lisa Sturtevant is a researcher at the Center for Regional Analysis at George Mason University. Jenny Reed is a policy analyst at the DC Fiscal Policy Institute. And Matt Losak is executive director of the Montgomery County Renters Alliance. When we come back after a short break, more of your calls and more about renters' rights, what you can and can't demand from those recently empowered developers and owners. This is "The Kojo Nnamdi Show." I'm Marc Fisher. We'll be back in a moment.
FISHERWelcome back. I'm Marc Fisher of The Washington Post, sitting in for Kojo Nnamdi. And we are talking about housing and the cost of rentals, the difficulty of finding rental properties in the Washington area, which sometimes can be seen as a sign of a healthy economy, or sometimes could be seen as a sign of a struggling economy. Lydia DePillis, is there -- can you look at the situation that we're in now and say this is a sign of a growing city that is thriving, you know? I mean, is there a positive spin on this?
DEPILLISYeah. It's really funny. There -- we always celebrate growth and rising rents and rising property values in the real estate industry, like, awesome. But you have to realize the human consequences of that and the folks who've been here for a long time. So I think that's why -- that -- we just need to emphasize the importance of it.
FISHERAnd is there -- one of the criticisms that's often made of people like all of you is that the solutions tend to be too much. We need more money for this. We need more money from that. The government should pay up. Are there other kinds of solutions that we should be looking at?
DEPILLISWell, I think the problem is that you have a sort of balkanized advocacy sphere where you have the nonprofit people who say, we need public investment in affordable housing. But they don't think as much about the private end of that, which is the landlord's lobby and the building industry lobby and say -- they say, we need more freedom to build more stuff. And then what the city right now is saying, we actually just need to help our citizens.
DEPILLISIt's called -- it's like what they call the supply side of it or demand side of housing, which is we need to help our citizens be able to afford these rising rents and get out of public housing, et cetera.
REEDI think all of the points Lydia makes are important. You know, we need to have more supply that is going to help bring down the prices somewhat and help meet the demand. But we also need public investment, too, to help bridge that gap between the low wages and the high housing costs. Lydia also mentioned the demand side, which is really important.
REEDWe do want to train people for jobs that pays them enough that they can live on. But, unfortunately, that isn't necessarily happening. We are training people for jobs, but sometimes those jobs still aren't enough to afford the market rate rent in the city.
STURTEVANTAnd now the jobs went, too. We are -- if you ask whether rising rents and home prices are a sign of a healthy economy, you can also ask the next question: At what point are rents too high and home prices too high that businesses will choose to locate somewhere else? And if we want our community to continue to have economic growth, understanding how job growth is related to housing availability is critically important to understanding how we're going to grow.
FISHERMatt Losak, Montgomery County certainly has the reputation of being a very affluent community, although it's actually a very mixed-income community. But it certainly has resources that the District might not. Have they done a better job?
LOSAKWell, not in terms of rental housing. The -- about four years ago, the County Executive Isiah Leggett appointed me to chair of the Tenant Work Group to look into renter issues in Montgomery County. We came up with a 30-page report of recommendations. And it took them a couple of years to get to responding to that report, which they did a couple of months ago. So we are still working on developing some fundamental kinds of protections for renters in Montgomery County.
LOSAKBut I want to address something that was discussed earlier. There was a constant backlash by landlords, by owners who are saying that any type of rent stabilization policy -- just cause eviction law, renter protection law -- is anti-business. And it has never really been the case. If you look at the most valuable renter stocks in the world, you will find that they are under some kind of rent stabilization, just cause eviction law or some other policy that has a balance between profitability and renter security.
LOSAKIf you -- likewise, if you look at some of the worst rental stocks in the world, they're not under any kind of rent stabilization laws. The fact is, the landlords in Washington, D.C., by and large, are making a good solid profit, and they are on rent stabilization laws. The landlords in Montgomery County are also making a substantial profit. They keep building more buildings. They keep pursuing their business ends. The fact -- we don't like to see this notion that public policy and marketability are mutually exclusive. They are not.
FISHERLet's hear from Oliver in Washington. Oliver, you're on the air.
OLIVERHi. Thanks for taking my call. Recently, it was Emancipation Proclamation Day for Washington, D.C. And so, during that time, a lot of African-Americans moved to Washington, D.C. to escape enslavement, and it has been a majority African-American city for a good number of decades. Now, it's turning out to become more of a white city. So there's a real important social issue that's at hand or at stake.
OLIVERIf we don't work to integrate or include low-income housing options in these new buildings and apartments that are going up, the city is going to -- the color of the city as far as the majority of population and the culture of the city is going to change dramatically in the next five years.
FISHERLydia DePillis, this has obviously been a longstanding political issue in the District for many years, the whole notion that there was some sort of a plan to remove black residents from the city and replace them with affluent whites. That has happened to some extent. But what really is at work here? What is the dynamic? Where do -- those who are displaced by new luxury housing, where do they end up?
DEPILLISYeah. I mean, I think Lisa is probably best to answer that and did so a little -- a while ago. There's -- you know, we usually see people move to Ward 9, which is Prince George's County. It's hard to track them, though. We don't really have an excellent picture of it. So I think that there is an unfortunate alignment of wealthy people and white people and poor people and black people who are concentrated in, I mean, the east side of the city, and that we are seeing this whitening over the last decade.
DEPILLISBut it's an open question that I'm not really going to take a stab at right now as to whether it's -- it should be a public policy goal to try to retain residents of a certain skin color. I think it's a complicated thing.
FISHERLisa Sturtevant, cities are organic structures, and they change all the time. And there's hardly an urban neighborhood in the country that hasn't had some sort of change in its ethnic or racial makeup over the decades. Should government have a role here? Or should we just let cities evolve?
STURTEVANTI think the first thing -- maybe it's because I'm a researcher and I like data. I think the first thing we need to understand is how our city is changing. The District of Columbia's population increased 5 percent over the last decade. All of that growth was due to the influx of white migrants into the city. We lost 30,000 African-Americans, and we gained 50,000 white residents. And we were the only city across the country to have that demographic dynamic.
STURTEVANTAnd I think that understanding how we're changing is the first step to understanding how those changes are affecting people on the ground. How is political power being shifted? How are people feeling that they're invested or not invested in their communities? I think understanding how the population is changing is the first step to understanding how it's affecting people on the ground.
LOSAKI don't think there's any doubt that when you have unbridled types of renter economies, where either the rules favor the landlords or there are no rules at all, that it's going to disproportionately affect minorities. And that's what we're seeing certainly in Montgomery County and possibly in D.C. and Northern Virginia. And so, you know, our advocacy position is simply that you put in place policy that protects everybody, and then you will have disproportionate protection for those who need it.
FISHERHere's Michael in Washington. Michael, it's your turn.
MICHAELYes, how are you today?
FISHEROK. What's your question?
MICHAELGood. I was trying to find out, do the actual low-income market rate adjustment costs actually affect the rise of the initial standardized rent in the District? Because I know there's still a lot of low-income people. They're getting like -- paying zero rent. But the landlord gets from the D.C. Housing Authority around, like, I think average market rate adjustment income of maybe 13, $1,400 for a one-bedroom apartment from the D.C. Housing Authority.
MICHAELSo does this actually affect the cost of rent over all of the District of Columbia, which I don't think is any studies 'cause I haven't read any analysis or any studies in regards to that? But based on my experience as a D.C. resident and been a Washingtonian for four generations is that this is extremely affecting the cost of living in the District. It's below income market rate adjustment...
FISHERThat's a good question. It's certainly been a question that's dominated the politics of housing in New York City for many years. Jenny Reed.
REEDWell, I think that what we've seen is that there are programs that help people pay their rent for people that don't make enough to support the market rates, and we've seen rates rise by 50 percent over the last 10 years. So I don't think that it's keeping prices down.
DEPILLISWell, a couple of quick points. I think there are two things. There's direct control, and then there's, like, housing vouchers, which pay the difference between what you can pay, 30 percent of your income, and the market rate in housing that's set aside for that. The federal government pays those, and that program has not expanded at all. So that is not an increasing resource for low-income people in D.C.
DEPILLISAlso, rent-controlled units are not expanding either. We're not getting any more of those. And, in fact -- so it's decreasing in overall percentage. So I think it's not a market moving kind of thing, but it is a shrinking resource.
FISHERRichard in Greenbelt has a proposal to help solve the housing situation. Richard?
RICHARDCan you restate that?
FISHERYou're on the air. Do you have a question?
RICHARDYes. What is the viability of something reminiscent of women's residence in the '20s or gentlemen's clubs, sort of an SRO without the stigma of it in which there's adequate space in a single room and nice amenities in a common space? I could think of the student -- international student house on R Street, actually the international hospital in New York on 104 and Broadway, Amsterdam. And lived in a hotel in Taiwan for a year, was perfectly fine.
DEPILLISYeah. So I love this idea of what used to be referred to as SRO, single-room-occupancy places. They -- or flat houses, right, is the stigma that -- in New York and San Francisco in particular. But you're starting to see in places, like Seattle, development of apartment buildings that just -- basically like dorms for people who can't really afford your spacious, you know, 800-square-foot studio but don't really need it.
DEPILLISAnd you can concentrate those around transit. And it just means that if you're transitioning from your parents' basement to a regular apartment, you can live there for a while. Or if you're trying to get off the street, you can live there for a while.
FISHERAnd is this -- would this be a largely subsidized model?
FISHEROr would it be a market rate?
DEPILLISIt wouldn't have to be because you could build a lot more units in a lot smaller space, so it just wouldn't need -- they wouldn't need to cost as much.
STURTEVANTOr it could be subsidized if Fairfax County took a county building and actually converted it to an SRO building where it allowed folks who are transitioning from homelessness to housing to reside there over time.
FISHERWe have time for one more call. Here is Michael in Washington. Michael, you're on the air.
MICHAELYeah, hi. How are you?
MICHAELYeah. I've been in the Washington, D.C. area for the last 32 years, and what I have noticed, the neighborhoods that are being replaced, they are being replaced with better residency and cleaner and less drug activities. And what I'm trying to say is that the middle class of Washington, D.C. neighborhoods have improved the neighborhoods, have stopped the crime in the neighborhoods, which made -- the neighborhoods looks better. These people are not being replaced.
FISHEROK. We're just about out of time. A quick answer from Matt.
LOSAKWell, I hope so. It's good to see that the neighborhoods are becoming more stable and stronger and crime is down. But I think it's -- what's needed is rent stabilization, just-cause eviction policy that keeps communities stable.
FISHERMatt Losak is executive director of the Montgomery County Renters Alliance. Jenny Reed joined us. She's a policy analyst for the D.C. Fiscal Policy Institute. Lisa Sturtevant is assistant research professor at George Mason University, and Lydia DePillis writes the "Housing Complex" blog for The Washington City Paper. I'm Marc Fisher sitting in on "The Kojo Nnamdi Show." Thanks for listening.
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