A new study from the Urban Institute and the Metropolitan Washington Council of Governments examines lower income affordable housing needs across the greater Washington, DC region. The study offers further confirmation that the most acute housing problem is the lack of housing affordable for extremely low income households. Housing Security in the Washington Region shows the shortage of housing, particularly for extremely low income households, and further shows that more than half of all renter households spent more than 30% of their income on housing costs, contributing to the number of homeless people in the region.
Using 2009-2011 American Community Survey data, the authors analyze the supply and demand for rental and ownership housing in the region, which includes the District of Columbia; Montgomery and Prince George’s Counties in Maryland; Arlington, Fairfax, Loudoun, and Prince William Counties in Virginia; and the cities of Alexandria, Fairfax, Falls Church, Manassas, and Manassas Park in Virginia. Some of the counties are among the wealthiest in the nation, yet roughly one-third of the households in the region had income at or below 80% of the 2011 area median income (AMI) of $106,100 for a family of four.
Renters made up only 37% of all households in the region, but they accounted for 70% of extremely low income households (ELI), those with income at or below 30% of AMI. These renters faced enormous competition for a limited number of affordable units. Forty percent of the rental units affordable to ELI households were occupied by higher income households, leaving a gap of 94,000 rental units needed by ELI households. This gap ranged from 3,500 units in Loudoun County to 22,100 units in the District of Columbia. The only income group for which there was a shortage of affordable rental units was extremely low income. The result is that 86% of ELI households were cost burdened, paying more than 30% of their income for rent and utilities, and 72% paid more than half of their income for rent and utilities. The most unaffordable rents were in Arlington County, where 91% of ELI households were cost burdened.
The report also outlines challenges faced by homebuyers in the region. For low income homebuyers, those with income between 51% and 80% of AMI, the average home sale price of $376,515 was 48% more than they could afford, and for VLI homebuyers it was 89% above what they could afford. In 20% of the census tracts in the District of Columbia and 28% of the census tracts in Montgomery County, there were no home sales in 2011 at prices affordable to low income, first-time homebuyers. As with ELI and VLI renters, lower income buyers also faced competition for affordable homes from households with higher income. Of the homes to buy affordable to low income or VLI households, 69% and 66% respectively was occupied by higher income households.
A major consequence of a shortage of affordable housing in the region was homelessness. The authors found that as of January 2013, of the 11,245 homeless people in the region, 25% were chronically homeless, 11% were unsheltered, and most were concentrated in the District of Columbia. While the region had 513 permanent supportive housing units, 2,399 more permanent supportive housing units were needed. In the region, 36% of homeless adults in families were employed, but the percentage varied greatly by jurisdiction. For example, in Alexandria, Arlington, and Loudoun, more than two-thirds of homeless adults in families were employed.
Finally, the report provided an overview of the sources of funding available to address affordable housing gaps. Federal, county, and city sources amounted to $1.3 billion in FY13, and private sector grants amounted to $33.4 million. Two major funding challenges were highlighted. First, federal funding is not expected to increase in the near future. Second, in the past, Fannie Mae, Freddie Mac, and their foundations provided nearly half of all private grant funding, but their charitable giving ceased for the most part in 2013, leaving a considerable gap in private funding for the region.
Housing Security in the Washington Region is at: http://urbn.is/1r1LENw