- The Washington Times - Thursday, March 12, 2015

Rents in the District are increasing at a rate that far outpaces residents’ average income gains, creating severe financial burdens for a quarter of D.C. renters who spend more than half of their earnings on rent, according to a study by the D.C. Fiscal Policy Institute.

Low-income residents are facing the greatest burden, with costs for the bottom 40 percent of renters increasing by 24 percent from 2002 to 2013 while their incomes remained stagnant.

But the increase in rental costs also are having a profound effect on middle-income households.

“In 2013, the typical middle-income renters earned $46,000 a year, a gain of $4,000 since 2002,” wrote Wes Rivers, the study’s author. “However, this gain was outstripped by rents for moderate priced units that rose almost $5,000 per year, from $900 to $1,300 monthly.”

The study found that 31 percent of families earning between $32,000 and $54,000 spent more than half of their income on rent in 2013. That’s a sharp increase from the 8 percent who did so in 2002.

The effects also were noticeable among the next highest group of earners, with incomes between $54,000 and $86,000. Virtually none of those earners spent more than half of their income on rent and utilities in 2002, but in 2013 approximately 10 percent did.

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Even those at the highest end of the rental market, the top 20 percent of renters, saw rents outpace increases in salaries. The average annual rent price for the group rose 32 percent over the 11-year period while income rose only 9 percent, to an average of $171,721.

“The District’s economic renaissance — reflected in a growing population, an influx of college educated young professionals, and rapid development in many neighborhoods across the city — has led to rising rents for virtually all residents — from those needing the lowest-cost housing to those looking for luxury apartments,” Mr. Rivers wrote.

Compared to the rest of the country, young professionals are doing exceedingly well in the District.

Median incomes for workers between the ages of 18 and 34 rose from $44,844 annually in 2000 to $54,279 in 2013 in the city, according to the data from the District’s Office of Revenue Analysis. Median incomes for the same age group decreased nationwide during the same period, from $37,355 to $33,833.

According to real estate listings website Zumper, the District had the fourth highest median rents for one- and two-bedroom apartments in January, trailing behind San Francisco, New York and Boston. The site reported that the median cost of a one-bedroom apartment in the District was $2,010 a month and a two-bedroom apartment was $2,800.

Other locations with high rents have seen similar gaps between income and rent increases.

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Rent prices grew at almost twice the pace of income in New York City between 2000 and 2013, according to a study by StreetEasy that estimates in 2015 average New Yorkers will spend 60 percent of their income on rent.

The gap also has widened in California, where renter incomes have dropped by about 3 percent from 2001 to 2013 but rents have increased about 18 percent, according to the state’s Legislative Analyst’s Office.

The D.C. Fiscal Policy Institute study blames the District’s increased affordability gap on the stagnation of workers’ wages and a decreasing affordable housing stock.

The number of affordable rental units available in the District has plummeted by about 42 percent, with the number of apartments available for $800 or less in the city decreasing from 57,700 units in 2002 to 33,400 units in 2013.

Low-income housing options are being replaced with high-income units, leaving fewer choices for low-income families. And the units that remain at the $800-level are virtually all subsidized by the government, the study notes.

D.C. Mayor Muriel Bowser has pledged to commit $100 million a year to build affordable housing in the District. But Mr. Rivers warns that if rents continue increasing as such a quick pace, it won’t be just low-income families who feel the financial squeeze.

“At the lower end, not only do you risk displacement but you create a great risk of homelessness. Toward middle income levels, there’s a possibility for displacement and also the possibility that the families just suck up the costs and that’s a problem as well,” Mr. Rivers said. “It’s a very scary thought. If that continues at such a rapid pace you could start to see deterioration of economic diversity of the city.”

• Andrea Noble can be reached at anoble@washingtontimes.com.

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