The number of affordable houses and apartments in the District plummeted by nearly 12,000 last year, according to an analysis of new U.S. Census data released yesterday, and a task force issued a draft report calling on D.C. officials to spend dramatically more to offset the spiraling cost of housing.
Once virtually abandoned by middle-class home buyers, the nation's capital is now a boomtown with skyrocketing rents and home prices in almost every neighborhood. While the real estate frenzy is generating millions of extra dollars in property taxes and other fees, it is also pushing mortgage and rent payments far beyond what many District residents can afford.
In a single year, the median rent in the District jumped by 9 percent -- from $734 to $799 -- while the median home value soared by 32 percent -- from $252,930 to $334,702, according to a report released yesterday by the D.C. Fiscal Policy Institute. The report's author, Angie Rodgers, said 2004 brought "some of the biggest increases in rents and home values we've seen in recent history."
District officials have devoted increasing sums to affordable housing. Last year, the city spent nearly $117 million on housing production, according to the office of Mayor Anthony A. Williams (D). But affordably priced homes are continuing to disappear at an alarming rate. To counter that trend, the Comprehensive Housing Strategy Task Force concluded that the city will have to spend much, much more.
"The housing boom has triggered a crisis of affordability," according to the task force, which was appointed last year by the mayor and D.C. Council to assess long-term housing needs. Low-income residents are increasingly priced out of the housing market, denying them the chance to "move up to the middle class," the report says. Working families, meanwhile, are being "forced to leave the city" to find affordable homes.
"In previous decades, the District of Columbia lost many middle-class residents," the report says. The District "now is in danger of losing the rest," leaving a "divided city, which is home only to the affluent and the poor."
To reverse these trends, the task force recommends dedicating a greater portion of the tax revenue generated by the real estate boom to housing programs. City officials should encourage construction of 55,000 units over the next 15 years, the report says, and adopt policies aimed at building "mixed-income and mixed-race neighborhoods."
"We're talking about a substantial increase, perhaps doubling what the city now spends on affordable housing," said task force co-chairman Adrian Washington, president of the Neighborhood Development Co., which specializes in urban redevelopment. "If we don't, we're going to have a city that's even more divided along the lines of race and class."
The report by the D.C. Fiscal Policy Institute offered vivid confirmation of the task force's concerns. The report analyzed U.S. Census data compiled in 2004 and released two weeks ago.
Driven in part by rising prices, the number of affordable houses and apartments declined by 11,800 units, according to the report. Apartments were defined as affordable if the monthly rent was $500 or less; houses were judged affordable if they were valued at $150,000 or less.
The number of high-cost houses and apartments increased by 15,400 units, the report said. High-cost apartments were defined as those with monthly rents of $1,000 or more. High-cost houses were defined as those valued at $500,000 or more.
The report notes that the District had only 9,900 houses valued at more than $500,000 five years ago. By 2004, "there were almost 33,800 of them."
"Looking at just one year of change, we're seeing thousands of affordable units lost. It's almost unbelievable," Rodgers said. She added that in some very poor households, those with salaries of less than $8,500 for a family of four, people spend "upwards of 80 percent of their income on housing."
In its final report, the housing task force plans to urge the mayor and council to devote far more cash to affordable housing, although the panel has yet to settle on a number. The task force has come up with a variety of ideas for raising the money, including reversing the council's recent decision to cut the deed recordation tax from 1.5 percent to 1.1 percent. That move would generate an extra $150 million a year for housing production, the report says.
Other options include devoting a larger portion of the deed recordation tax to housing programs and dedicating part of the city's rising property tax revenue to the creation of affordable units.
This week, the task force plans to seek comment on its findings at three public hearings. The first is scheduled for 6 tonight at Howard University. Task force co-chairman Alice M. Rivlin said the group hopes to produce a final report by the end of the year.
Williams was out of town yesterday, traveling in Europe. But several council members praised the task force's work and vowed to give its recommendations serious scrutiny.
"We hope the report won't sit on the shelf somewhere but that it actually gets into the currency of political thinking," said Rivlin, a scholar at the Brookings Institution and a former member of the D.C. financial control board. "With the mayor and council races coming up next year, I think there's a good chance that it will."