Rents Rising Fast, Straining Many Families, Study Says

Average Monthly Cost Is $1,241

The District's booming housing market has caused a rapid rise in rents, increased the financial squeeze on low- and moderate-income families and put some renters at greater risk of becoming homeless, according to a report by the Urban Institute.

The report found that between March 2003 and December 2004, the average rent in District apartment buildings with five or more units jumped 11.5 percent, compared with 5.9 percent in the region as a whole.

The average monthly rent in the city, as of late last year, was $1,241, compared with a regional average of $1,125, according to the report. New apartment units are even more expensive, with many renting for $2,000 a month or more.

The report, commissioned by the Fannie Mae Foundation and the Urban Institute and released last week, flagged trends in the D.C. home-buying and rental markets that are presenting challenges for renters and potential buyers and making it harder for low- and middle-income people to live here. Affordable housing is increasingly scarce throughout the city, including in neighborhoods once deemed modestly priced.

"It's getting harder and harder to find affordable rentals," said Margery Turner, director of the Urban Institute's Center on Metropolitan Housing and Communities. "And if a renter is thinking he or she might at some point buy, that prospect is getting farther and farther out of reach."

Renters accounted for 54 percent of all District households last year, compared with 30 percent in the region.

Rising housing prices have helped homeowners build equity and boosted the District's tax collections. But with the average sales price of a home hitting $450,000 last year, more than 80 percent of the properties for sale in the city were too expensive for the average household.

Rental costs are soaring, too, though not quite at the same rate as costs for buyers. The rents are steep despite the boom in production of rental housing. Available and affordable units continue to be scarce, in part because of the fast pace at which apartment buildings are being converted into condominiums.

The report found that the income needed to afford a typical two-bedroom apartment in the District, assuming that a household will spend 30 percent of its income on rent, increased between 1999 and this year from $32,800 to $47,480 -- almost twice the salary of a full-time receptionist.

Between 2000 and 2004, the share of District renters paying more than 30 percent of their income for housing increased from 39 percent to 46 percent. The share of those earmarking more than 50 percent of their income for housing rose from 18 percent to 23 percent.

Four out of 10 of the District's low-income renters -- defined, for example, as having an income of $68,324 or less for a family of four -- spent more than half of their income on rent, the report said.

Stacey Stewart, the Fannie Mae Foundation's chief executive officer, said the trend, if unchecked, will push low- and moderate-income families out of the District and block others from moving in.