One of the fundamental tenets of the comprehensive plans in this area (at least Fairfax) is to preserve neigborhoods at current levels of density. With that kind of institutional bias against increasing density, how do you see the path forward for remaking the region for inner suburbs? Can the technical issue be addressed in an open manner without simply being shut down by savvy communities at their planning commissions or town/county boards?
You raise a really good point about the tension between neighborhood preservation and density. Increasing the supply of housing overall is a necessary step for ensuring enough affordable housing in the region. Given that the amount of land is constrained, increasing density is the only way to increase housing supply. And increasing densities in neighborhoods that are currently or soon-to-be served by transit is part of many localities planning efforts, including Fairfax. I think there is more openness to targeted increases in densities than there used to be. Pointing to successful examples (e.g. the Rosslyn-Ballston corridor ? increased densities, thriving nearby single family neighborhoods) will help to make the case.
I believe that due to the current rate of housing growth, which is restrained by current zoning, the price of homes is inflated. To a fair extent, this is a simple supply and demand curve in which the supply is suppressed, demand continues to rise, and the price of housing accordingly increases. Is it possible to calculate the "premium" that current comprehensive plans add to the cost of housing? If so, it could be a useful index by which to attempt to persuade policymakers toward more affordable-housing-oriented land use decisions.
Well, rising home prices and rents in many parts of our region has been due to strong demand and historically low levels of residential construction (with some notable exceptions of multi-rental rental construction in DC and other close in locations.) The ability to secure financing and the risks developers are willing to take are factors in the production of housing units. Local land use policy is definitely also an important factor. The Center for Regional Analysis will be publishing a report later this month on the process and regulatory costs associated with building housing in Montgomery County, to show how these costs impact the ability to build housing. We hope to release similar reports for the rest of the region?s jurisdictions later this spring.
Are you including PG County in your discussion? There are plenty of affordable homes in PG County.
Housing in Prince George?s County is affordable. (Although average home prices look like they?re up for the first time this month in the county.) Prince George?s county also has really good transit and highway access. So why aren?t people flocking there? Some of the reason, I think, is a reputation the county can?t shake. There are lingering issues related to schools, crime and transparency in government that affect people?s decisions. For people looking for walkable, mixed used neighborhoods, there aren?t too many in Prince George?s though that could be changing. I?m thinking of Hyattsville.
Does DC have parking minimum requirements for housing? If so, wouldn't that encourage bigger homes and make a dis-incentive towards affordable housing?
I don?t know D.C.?s specific parking requirements, but I do know that there is at least one recent project that has had no (or very little) parking. This is a building with very small unit sizes, too, around 300-500 square feet per unit. Definitely targeted for singles, not families.
Isn't the term just a misnomer since what may be affordable to a family making $100k per year is far out of reach to someone making the median salary of $35k? With that said, why is $350k considered affordable? I know that my wife and I make over six figures, and cannot afford anything over $500k with 2 kids no credit care or student loan debt, and reasonable retirement and educational investments. Therefore if someone is making less than half of what we do ($40k-$50k), they could not afford anything over $250k, which eliminates virtually every property in this region aside from the slums and stuff 30-40 miles away from the city. Real Estate agents keep saying the bubble has burst, but from where I stand, there's still a lot of downward adjustments that need to occur to make homes truly affordable.
That?s a good point. Affordability is different from households with different incomes. And it?s different for renters versus buyers. The $350,000 cut off was a little arbitrary?the median home price in the Washington region is about $380,00 so it was a cut off to be able to talk about below and above the median. Home prices have fallen in many parts of the region, but, as you suggest, it is very difficult for many households to buy a house close to their jobs. Increasing the supply of homes near existing and growing employment centers is important for trying to keep housing affordable for the whole spectrum of households.
Wheaton, where I live, has tons of houses at very reasonable prices. I live blocks from the Wheaton metro and was able to buy my current house on a GS-9 government salary with minimal outside help. It's not as glamerous as Logan Circle - but a really pleasant place to live and *gasp* affordable.
You?re absolutely right that there are neighborhoods in the D.C. region where you can find housing that is affordable. Given the increasing demand for housing in the region, those places will get harder to find.
Theoretically, something like 20% of the workforce should be retiring within the next 5 years. Many of these people have owned homes in the inner suburbs for two or three decades, meaning that the value of the house has gone up by about 300% or more since when they first purchased it. When these people actually do retire, are we going to see a migration and housing prices drop as people just want to get out knowing they are going to make a huge profit on the house regardless, or are values going to hold tight.
I?m not sure about the 20 percent in the next 5 years number, but you?re right?we?re going to see more retirements as the baby boomers age. Not everyone leaves their house when they retire, though, and not everyone leaves the region. We?ve estimated that about 60 percent of retirees in the Washington area will actually end up staying here. They might downsize and sell those bigger houses, as you suggest. But there will be demand from new workers moving to the region?people in their 30s and 40s who will be looking for a single-family house in the inner suburbs. So I don?t think we?ll see any kind of price drop in these neighborhoods. Demand will be there for those homes.
I currently live in a building in SW DC that I believe is one of the only affordable pockets of inventory available - one bedrooms are currently selling for around $125k and 2-bedrooms $160k. My building is 2 blocks from the metro and extremely accessible to I-395, though it is a coop which means that monthly fees are slightly higher than you find in condo buildings (though utilities and taxes are included in those fees so there is a savings there). The neighborhood, while maybe not terribly exciting, is one of the safest places I have lived in DC (especially compared to the Columbia Heights area - and I have lived in SW for the last 7 years!) My question for you is this - what do you think are the drivers that make an area like SW still affordable, when other neighborhoods (that are less desirable in my opinion) seem to already be unaffordable? thanks!
Some of the price difference is due to the age and quality of the housing stock. Older builders are (generally) cheaper. Price differentials result from the different amenities available. People look at things like crime and schools (even if they don?t currently have kids!)
Which neighborhood in DC is most in demand in terms buying a home that is still relatively affordable, convenient to downtown and in an up and coming neighborhood (e.g. Petworth)?
There is a lot of potential for increasing demand in up-and-coming neighborhoods. We have a fairly transient population here in the D.C. region. And as the city is changing, many newcomers don?t have preconceived notions about different neighborhoods. So places like NoMa, Petworth, and others can attract newcomers?or certain kinds of newcomers?given the amenities you suggest.
Hi, My husband and I own a town home in Howard County, but we're hoping to purchase a single family home in the next 3-4 years (2015/2016). At the moment, we are underwater on our mortgage. My question is - where do you see the local housing market going, and what can we do in order to plan for taking a loss on our property? We are not hugely underwater, but enough so, that we cannot expect to make a profit on the sale of the home. In the meantime, we are paying off debts, renovating our townhouse, and saving up a down payment. Is there anything else we should be doing? Would it be worth it to look into getting a discount broker when the time comes (since that would eat up a good portion of our "profit")? Like I said, we are fully expecting to sell at a loss (we bought in 2008) so I am trying to come up with a contingency plan. And staying put is not an option due to a growing family and long commutes. Thanks!
The local housing market is improving. Sales activity is up and prices will be up in 2012. Not knowing your neighborhood specifically makes it hard to say what kind of market you should see. Take a look at recent sales, see what you might realistically be able to expect. But the market in 2015-2016 will be different than it is right now.
Although my family and I wanted to live closer to the city, it was just not fiscally feasible and responsible. Instead, we moved farther out to Loudoun County where we got more house for our money. Sure we overpaid a little, but we know that we will be in our house for the next 10 to 15 years and can raise a family there without worrying about space.
There are definitely people who prefer suburban neighborhoods where you can have a bigger house and a bigger yard, usually with longer commutes. There are also people who have made the trade off to have smaller space and be closer in. And it ends up not just being about the cost of the housing, but the combined housing and transportation costs, along with all of the other things that go into the decision about where to live. So we are going to need more of all kinds of housing.
Really? The last time I checked, the median income in the region is somewhere around $45k, which would mean people making that, assuming they don't spend more than 35% of their income on housing, would most likely not be able to afford anything more than $200k. I know housing prices are extremely inflated and people need to get creative to afford to live in this area, but you shouldn't really consider $350k "affordable," because it would take two median incomes to truly afford that without breaking the 35% rule.
The median household income in the Washington D.C. metro area is $85,000 (according to the 2010 American Community Survey.) We have one of the highest median household incomes in the country. That?s sometimes why we look fairly affordable in measures of housing affordability. But that median income figure really misses out on the fact that there is a really wide distribution of incomes. So having a sufficient supply of housing that is affordable to households along the income spectrum is important.
Until we invest more heavily in transit and roads, there should be no way that we increase density. Our traffic is the worst in the country and we spend hours every day away from either being more productive through work or spending more time at home with families and friends. Increased density without corresponding increase in money toward Metro and new roads will only make a bad problem worse.
Housing, transit and transportation, and quality of life (along with our region?s economic well-being) are all closely intertwined. We can?t talk about housing without talking about transportation, and vice versa. Where we do have opportunities for increasing densities?for example, around new Metro stops?we should take advantage. And if we don?t have a sufficient supply of housing in the region, traffic is only going to get worse. Right now, about a quarter of a million commuters work in our region but commute in from other places?West Virginia, Baltimore, Richmond, Eastern Shore. If we don?t produce enough housing to keep up with job growth, that number of in-commuters could be 700,000 by 2030. We could never have capacity for that level of commuting. So we need more housing closer to where people work.
There has been a lot of new development in the 14th street cooridor in NW D.C. But it all seems to be luxury dwellings, with little to no provision for lower income housing. Why doesn't the government require a certain number of low income housing or workforce housing in every large development?
The requirements for affordable or workforce housing vary from jurisdiction to jurisdiction. For example, Montgomery County requires all new residential projects to have a certain number of units affordable at very specific income levels. In many jurisdictions, the affordable housing contribution is negotiated on a project-by-project basis.
How much of housing policy is just "pushing on a string"? What policies have been empirically tested to demonstrate verifiable results?
That?s a good question. The Center for Housing Policy has put together a number of best practices for encouraging the development and preservation of affordable housing. So much can depend on the state and local regulatory environment. In our region, the options Virginia localities have can different pretty substantially from what can be done in Maryland.
It seems that a significant part of the problem with housing is the way that education financing is conducted in the U.S. Due to Lake Woebegone effects bidding up the prices of housing near higher achieving schools leads to the eventual pricing out of less affluent parents seeking a bright future for their children. With the quality of Fairfax and Montgomery schools in particular, how can affordable housing be achieved?
It is clear that school quality is an important factor in house prices. That?s what makes it so important that local strategies should do as much as possible to encourage the construction and preservation of affordable housing in all parts of the jurisdiction, and not concentrated in poorer neighborhoods.