A July 2 Real Estate article said that Michael Halpern had previously helped a friend renovate a house. At the time, that person was Halpern's boyfriend. (Published 7/9/2005)
After returning from his job as a writer for the American Civil Liberties Union one evening this spring, William Potter grabbed an iron pry bar and, with a few whacks, demolished the kitchen of his Petworth rowhouse.
For Potter, 25, this act of destruction was just another thing he thought he would never accomplish so early in life. He certainly didn't think so a year ago, when he was living frugally in a group house in Mount Pleasant and saving for a down payment. Now the first-time homeowner has a second job: rehabbing his house to a livable standard.
Potter, three months into a kitchen-less lifestyle, is among a growing group of young people who came to Washington for school or work and now want to own their own little bit of it. According to Census Bureau figures, thousands of people in their late twenties and early thirties moved to the District from 2000 to 2004, even while Washington's population dropped overall.
Most people in this age group are still renters, and most of this region's growth is in the suburbs, not the city. Still, there is a notable group who, like the "urban pioneers" of the 1970s, seek to take risks on up-and-coming D.C. neighborhoods in the hope that their willingness to buy houses rather than apartments now gives them space to grow as they start families later.
It's not always easy. For one thing, as prices in the District have soared, gentrification has come under fire from those who say that new, well-off homeowners are displacing long-time, poorer residents. Potter said his neighbors "either see me as increasing the property value -- that's a good thing -- or as a gentrifier. I don't know. I don't really feel like either. I guess I'm both. There's no way around it."
It's not easy financially, either. On top of sometimes-hefty monthly mortgage payments, young owners of old houses often face pricey renovations, some of which they must do largely on their own in fits and starts as the money becomes available. Some receive financial help from parents, who give thousands toward down payments and hope that the area's lucrative real estate market will offer a hefty return. Others take on roommates to help shoulder the burden.
Many of these young homeowners say they bought at least in part because of the fear that if they did not act now, they would forever be priced out of homeownership.
"Every time I moved, my rent was increasing and my living situation wasn't necessarily improving," Michael Halpern, 27, said. "Everything was increasing in value so much that I'd have to buy now or I'd be living in Falls Church. It was a now or never situation."
After four years of renting rooms in group houses throughout Northwest Washington, Halpern wanted more space than an efficiency could provide. But on his salary from a nonprofit, he could qualify for a mortgage of only about $160,000. He wanted to buy in the District, in part because of the $5,000 federal tax credit available to first-time buyers in the city. He convinced his parents to co-sign for a loan, and in August, bought a $386,000 three-bedroom house on Shepherd Street in Columbia Heights. To the help pay the bills, he took in two roommates.
Potter said that because of his youth, he struggled during his search to convince family and friends that his desire to buy was serious, though he remained firm and found a real estate agent he trusted. He bought his house, an 82-year-old three-bedroom on Longfellow Street in Northwest, for $325,000 in March, using a fixed-rate 30-year mortgage. Potter used savings and money from a personal injury lawsuit settlement to put 10 percent down.
To say the house needs work is an understatement. The only vestiges of the old kitchen are pipes that snake through holes in freshly hung drywall. But it was the best he could find -- other houses in his price range had water damage or featured shoddy renovation jobs that were left half-done; one even included the tools needed to complete the work. That people were bidding on some of these properties "as-is" was a shock to him.
"Another place I looked at was just a shell," Potter said. "This city isn't meant for people who really just generally want a home."
Some rough edges remain in his neighborhood. He witnessed a drug deal take place in the alley behind his home one weekend as he was gardening. Items have been stolen from his yard.
In the 12 months that ended March 31, house prices in the District increased 22 percent, behind only Nevada, California and Hawaii, according to the Office of Federal Housing Enterprise Oversight. Over five years, D.C. prices have more than doubled.
People in their twenties, many of whom are still working through graduate programs or in the early years of their careers, are less likely to own homes than any other age group, but the percentage of young homeowners nationally has grown steadily -- and at a faster rate than among the general population -- during the past decade.
In 2004, the national homeownership rate reached a record 69 percent, according to the Census Bureau. In 1995, that number was 64.7 percent. Forty percent of 25- to 29-year-olds own homes, up from 34.7 percent in 1995, while the proportion of people aged 25 and younger jumped from 15.9 percent in 1995 to 25.2 percent in 2004.
With prices rising, Matthew Even, 28, said that he and his wife, Megha, would no longer be able to afford to buy their W Street rowhouse, between the Shaw and U Street neighborhoods.
The couple admit that they wish they had been better prepared when they took out an interest-only loan to purchase their 1,000-square-foot rowhouse two years ago for $305,000. Both work for nonprofit groups; they did not have any money to put down.
Though the couple recently refinanced, they cannot afford to frame the art prints they have collected over the years. Trips to New York and tickets to shows at the nearby 9:30 Club, frequent before they bought their home, are now rare. Megha Even, 30, wonders where in the tiny second bedroom they might someday put a child.
With the house's electricity in need of an upgrade, and other projects including the installation of a new heat pump looming, the couple say they have learned that they must save for unanticipated costs. They want to remodel the kitchen, but that will have to wait.
"We've been trying to save for it, but every time, we come across new expenses and have to start over," Megha Even said.
Being "house poor" is an experience that many young homeowners share. Unable to spend money to pay others to make necessary repairs, some are gaining valuable home improvement skills.
When friends call with drink or dinner invitations, Potter's typical response is: "I'm hanging drywall."
He said, "All the money I have coming in right now, it's all going to the house."
Halpern said that even though he had previously helped a friend renovate a home on Capitol Hill, a year ago it would have taken him hours to complete any basic electrical work. One of his tenants helped to change that.
Having roommates has been a "productive tradeoff," Halpern said, taking a break from stripping paint from two French doors on a recent Sunday.
Halpern's knowledge of the home-buying process allowed him to think creatively about the house.
"Having that $5,000 credit is a reason I'm able to put in air conditioning," he said, though he admitted that he has had to take out a loan to complete the $10,000 job.
Still, in an era in which many people in their twenties easily drop $150 on designer jeans, some potential buyers cringe at the change in lifestyle that the purchase of a home, especially one that needs work, can mean.
For Elizabeth Petersen, 24, such a purchase could mean putting graduate school on hold. Petersen, an ACLU field assistant, had been looking at homes with her boyfriend, but the couple decided to wait until fall to assess their desire to buy. She has bought countless books on real estate and has looked "obsessively" at online listings.
"The more I learned, the less rosy the picture became," Petersen said.
Others wind up walking away disillusioned. After seven months of shopping with a number of different real estate agents, Lynne Parrish, 24, did just that.
A congressional staffer, Parrish had been hoping to find something on Capitol Hill. She started looking on the urging of her parents, who had purchased a home in Savannah as an investment while her brother attends school there. They even agreed to help with a down payment.
When Capitol Hill proved too expensive, Parrish expanded her search to Southwest Washington. Now that the anticipated construction of the new Washington Nationals stadium in Southeast has turned nearby areas hot, she is striking out again.
"I found the perfect place -- it was $830,000," Parrish said. "I just heard my dad laughing at me when I called him about it. . . . It's definitely a renters market for me."
Young homeowners, such as Potter and Halpern, do tend to make sympathetic landlords.
When Potter learned that a friend was moving to Washington in June, he immediately offered her a room for rent. That meant weeks of scraping and priming walls to prepare the room, but the extra $300 she provides each month -- rent will rise to $500 after the kitchen is in place -- will speed repair work.
Potter hopes to begin work on the kitchen by August. Not coincidentally, that's about the same time he will plunge into credit card debt for the first time.
Until a new stove arrives, though, dinner means anything that can be heated in the toaster oven he has set up in a makeshift kitchenette in his dining room.
Nonetheless, Potter is happy with his decision to buy.
"I can do whatever I want; no one is going to kick me out," he said. "One of the first things I did, I rode my bike around the house."
There were no obstacles that day; there still aren't.
"I can't afford furniture," he said.