In future decades, Washington promises to become a world-class city. But this optimistic prediction, the subject of my previous column, paints a picture with one notable blemish. As the city’s population and urban vitality grow, affordable housing choices for the economically disadvantaged will shrink.
Declining affordability will be the victim of the laws of supply and demand.
(Roger K. Lewis)
As Washington thrives, the cost of living and real estate values inevitably will rise because more people will be competing for a relatively constrained amount of housing. In parts of the city, future development and additional density eventually will be limited by zoning and height and historic preservation policies and regulations. Less developable real estate will make affordable housing even more difficult to create and sustain.
Can housing be made significantly more affordable through innovative engineering and architectural design using new technologies? Such innovation can contribute only marginally to enhancing affordability. Regrettably, increases in land, labor and material costs due to inflation persistently outstrip savings attributable to design.
Consequently, part of D.C.’s population, many of whom are low-income African American and Hispanic residents, will find themselves increasingly priced out of the housing market. Retirees, minimum-wage earners, the unemployed and the underemployed will be most affected.
The housing affordability challenge is not unique to the District. Many U.S. municipalities and urbanized counties face this challenge. And the problem will worsen in the future unless current housing policies and priorities change.
But will policies and priorities ever change? Today’s political and fiscal environment, and the probable future environment, suggest that the answer is resoundingly no.
No matter how successful the United States is in restoring a healthy economy, creating jobs, expanding credit and improving the quality of primary and secondary education, some portion of our population always will be hard-pressed financially. Those better off may lament this. But lamentation will not stop them from enjoying the benefits of the low-cost labor of millions of minimum-wage workers who enable goods and services to be priced affordably.
In Washington, the economically disadvantaged will have increasing difficulty finding an affordable place to live. Their incomes will be too small to cover the cost of market-rate, unsubsidized housing. And in a few decades, much of today’s unsubsidized but still relatively affordable housing, after being refurbished or replaced, will be unaffordable.
Ultimately, financial subsidies always will be necessary to create new affordable dwelling units or to preserve and sustain existing ones. And the amount of subsidy is inversely proportional to household earnings: The closer a tenant’s income is to poverty level, the more housing subsidy is needed.
If housing affordability always depends on financial subsidy, from where will future subsidies come?
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