Despite the common claim–one that is partially correct–that urban rental prices are high due to a lack of supply, what goes unsaid (though occasionally implied) is that prices are being bid up by the well-to-do and the wealthy. This is what that bidding up looks like:
The upper class and upper-middle class are driving prices out of reach for most households. It’s also why many people, who otherwise should be economically secure, aren’t–rental housing costs so damn much. From D.C., we note the following:
In 2008, according to the report, D.C.-area rental costs were 48.1 percent above the national average. In 2012, they were 69.6 percent higher. That’s a huge increase—the biggest, in fact, of the 15 largest metro areas, and the third-biggest of all 381 metro areas studied, behind just San Jose-Sunnyvale, Calif., and State College, Pa.
This is what people are really talking about when they say that affordable housing in D.C. is dwindling. It’s not that there are fewer overall units, or fewer subsidized units. It’s that rents are shooting up, and incomes aren’t shooting up to match. A new nationwide study from the National Employment Law Project found that in the recovery from the recession, low-wage jobs are proliferating, but the middle-income jobs lost during the recession haven’t come close to being replaced. That’s why, in D.C., you find homeless residents who work jobs but still can’t afford housing.
And it’s why, ultimately, city investments in new affordable housing simply won’t be enough to make the city affordable for all of its residents. To accomplish that, the growing gap between incomes and costs will need to be bridged, with higher incomes, a slower rate of price increases (particularly rents), or ideally both.
When faced with inelastic goods, inequality is a bitch.