“Inequality and the City” is a timely, sobering theme on which to end 2015. This headline topped economist Paul Krugman’s recent New York Times column about how New York City has changed during the past two decades in ways very favorable for haves and very unfavorable for have-nots.
Krugman’s commentary could just as well apply to Washington.
Like New York, culturally rich Washington has become ever more vibrant and ever more expensive to live in, due in large part to real estate costs.
Within the Washington metropolitan area, much residential real estate has become unaffordable for thousands of middle-income families, and not just the working poor. Once-affordable neighborhoods are too expensive for both newcomers and longtime neighborhood residents.
In some parts of the city, apartment rents and prices for condos and homes are double what they were a decade or two ago. It’s no longer unusual to see condos, especially in newer buildings, selling for $1,000 per square foot, rowhouses priced at more than $1 million and tiny apartments renting for $2,000 and upper month.
Meanwhile, incomes for many employed people have remained relatively flat. America’s proverbial economic tide may be rising, but it doesn’t lift all boats.
Long-term, structural economic conditions account for the growing disparity between what people earn and what they must spend for shelter and other necessities, especially in urban settings. Instead of 30 percent, long considered the norm, many households are spending 50 percent or more of their income just for housing.
The costs of land and construction have never stopped increasing. In addition, costs for goods and services — medical care, insurance, local taxes, utilities, food, entertainment, clothing and school tuition — have greatly outpaced middle-class income growth. Only gasoline and mortgage interest rates are favorably priced, at least for the time being.
Transportation costs also have taken a larger bite out of household budgets. For reasons of economic necessity, families that might otherwise prefer living in the city frequently move to suburbia, where housing is more affordable. Yet their financial situation may not change much, as they are likely to spend more money than city dwellers on automobile ownership and commuting.
Some D.C. residents can get by without owning a car because of access to rail and bus transit, bikes and bike lanes, taxis and convenient car-rental services, telecommuting and pedestrian-friendly streets. Thus, for city dwellers, the money saved by not owning a car may help offset higher housing costs.
Costs attributable to structural economic conditions escalate real estate values, but so does basic market demand. This in turn leads to neighborhood gentrification as rising property values and higher property taxes pressure moderate-income residents to leave. The haves — young professionals earning good incomes and downsizing empty nesters with sizable assets — move in to take advantage of urban living and urban amenities.
Washington has countless cafes and restaurants, thousands of shops and stores and hundreds of theaters, museums and recreational facilities. Employment opportunities in the city also are more numerous. All this makes Washington a happening place, a more attractive place, yet a place requiring more than an average household can afford.
Some believe that the solution to urban inequality and lack of affordable housing is the creation of more jobs. But creating more jobs, while desirable, will not address the persistent, structural economic challenges affecting Washington, New York and other U.S. cities.
A large percentage of middle-class salaries are not enough to enable families to afford to live in cities and to sustain a middle-class lifestyle. Many who work in the District cannot afford to live in Washington.
Achieving the so-called American dream — owning a home — provided the momentum for the 20th-century housing market and home-construction industry. Home ownership, whether in a city or suburb, was a paramount American aspiration shared almost universally, along with getting an education, holding a steady job, having a loving family, maintaining good health and buying a car.
The American dream is still shared by many millions as 2015 comes to an end. But now the dream has been downsized for many citizens, and for many others, merely surviving has trumped dreaming.
Roger K. Lewis is a practicing architect, a professor emeritus of architecture at the University of Maryland and a regular guest commentator on “The Kojo Nnamdi Show” on WAMU (88.5 FM).