Middle Class Can't Afford Most Washington Area Homes
Thursday, November 29, 2007
Despite a soft real estate market and a dip in prices, most homes in the Washington area remain beyond reach of low- and moderate-income families, according to a study being released today by the Urban Institute.
"The lowest paid workers, including home health or personal aides, have long been shut out of homeownership in this region," the study said. "But now the vast majority of homes sold are out of reach for even middle-income households."
The 77-page report, prepared for the Fannie Mae Foundation, also noted that rents are prohibitive for many households, particularly for the elderly and those with low incomes or disabilities.
"The persistent housing affordability gap puts too many of the region's residents at risk of homelessness," said the study. The Urban Institute, a nonprofit research group based in the District, has issued a series of annual reports focusing on housing affordability in the region.
"Homelessness is a real problem for our region, and this year's focus on homelessness and special needs, including the elderly, elevates the challenges the region faces and contains suggestions on how to solve the problem," said Peter Beard, executive director of the Fannie Mae Foundation.
This year's report, "Housing the Nation's Capital -- 2007," urged the private and public sector to work together to address pressing housing needs, and offered a host of recommendations that included providing more government vouchers for housing and in-home health care.
The recent housing boom more than doubled home prices in parts of this region, and despite softer prices this year, those homes are still out of the reach of many. In 2006, the median sales price for a single-family house was $431,000, the study said.
For example, a medical services manager who earned $87,300 a year could afford only 14 percent of the homes in the Washington area last year, compared with 49 percent four years earlier, the study said.
As for rents, the report said households needed to earn $49,000 a year to afford the region's average monthly rent of $1,226.
In 2005, almost half of all renters, and more than six out of 10 elderly renters, "paid rents unaffordable by federal standards," which means they spent more than 30 percent of their income on rent.
The report also raised concerns about future housing needs for the growing number of aging or disabled residents.
The region's 65-plus population will more than double by 2040, accounting for 1.1 million or 14.7 percent of the total population, the study said. And the number of moderately or seriously disabled people will increase 68 percent.
As the baby boomers get older and the population of people with special needs expands, a growing number will find that in-home care is too expensive and that waiting lists are long for supportive housing units, the study said.
Some may become institutionalized unnecessarily or experience periods of homelessness, it said.
In addition to recommending that governments provide more housing vouchers, the study called for the private sector to provide more affordable housing to reduce the burden on government.
Two weeks ago, D.C. Mayor Adrian M. Fenty (D) announced a plan that included providing permanent housing for the chronically homeless, discouraging conversions of apartments to high-priced condos and helping fund 500 townhouses for low- and moderate-income workers.