With roughly 363,000 additional households expected to live in the D.C. area by 2030, the region must build about 374,000 new housing units to keep pace with demand—and most will need to be affordable to low- and middle-income families—according to a new analysis by the Urban Institute. The study, which was funded by the Greater Washington Partnership and JPMorgan Chase, also says 220,000 families who have annual incomes below $75,000 and are spread across 296 census tracts, may face displacement due to rising housing costs.
The numbers put a fine point on the region’s affordable housing crisis as its economy stands to continue growing with the advent of Amazon’s Northern Virginia headquarters and other employment opportunities. The researchers are calling for local governments to implement a slew of strategies to make housing more accessible to people of various incomes, including by preserving existing affordable housing and removing barriers to new development. Still, they note that “there is no silver bullet” in the public or private sectors for addressing these issues.
“Inaction on housing affordability challenges could ultimately undermine the region’s future economic growth and prosperity,” the authors write in an abstract to the report. “Housing challenges like these can undermine worker productivity, make it harder for companies to attract and retain employees, and discourage companies from locating in the area. Recent job and population trends suggest that housing constraints and affordability challenges may already be slowing employment growth and causing people to leave the Washington region.”
The projected 374,000 new homes needed by 2030—derived from an economic growth rate calculated by the Metropolitan Washington Council of Governments—assumes no families would have to pay more than 30 percent of their incomes on housing. Among experts, that threshold is commonly defined as being “cost-burdened” by housing. The researchers say 40 percent of these additional units would have to be in the low-middle and middle housing cost bands, while another 38 percent would have to be in the lowest and low cost bands, to match the need. (The cost bands range from $0 to $799 per month to $3,500 or above per month.)
Meanwhile, according to the Urban Institute, increasing home values and property taxes are placing greater pressure on families to leave the area. Beyond the 220,000 families who are most at risk of displacement, another 99,000 families also with incomes below $75,000 per year live in communities that are “vulnerable” to displacement. Four regional jurisdictions—Prince George’s County, the District, Montgomery County, and Fairfax County—account for three-quarters of those at-risk and vulnerable households, or roughly 240,000 households; the biggest number live in Fairfax County, including Fairfax City and Falls Church (43,400).
The authors say government and business leaders should set benchmarks for boosting the production of new housing in the region, targeting funding at affordable housing programs, and tracking progress through data. The region may need to act quickly: A recent report by RentCafe found that apartment construction in the D.C. area is slowing despite the demand.