This Has Happened Before, Elsewhere

THC is lucky to have two great interns helping out the Rapid Re-housing team this spring. Roman Rivilis is a UC Davis graduate and San Francisco Bay Area native. Read on for his guest post about the comparisons between DC and San Francisco’s affordable housing shortage. 

1998 SF - Frank Deras, Jr.

San Francisco in 1998. Photo credit: Frank Deras, Jr.

Kim-Mai Cutler recently wrote a powerful article about San Francisco’s housing crisis that chronicles the city’s struggle with the monopolies of The Gilded Age, when the late 19th century gave rise to organized power and monopolies in the railroad industry. Now, larger companies like Uber and AirBnB, alongside landowners in the Mission district, crowd out potential new San Francisco residents by buying real estate and forcing the price of available real estate to increase in the process.

San Francisco’s affordable housing crisis resembles the situation in DC, where old homes and neighborhoods have been torn down and replaced with new ones in the past decade to attract higher-income residents. Though the causes behind the housing shortages are different, both cities struggle with similar issues of poverty and homelessness. Businesses and developers battle with the District for influence over how the residents should live their lives. Even if the homeless are displaced all over the city, for some profit-minded parties, their interests and well-being are not as important as those of the larger property owners.

Marsha Wood succeeded through the THC program as a client, but interacting with her landlord became a constant challenge. She discussed her past experiences – the landlord let people move into the complex, and generated income by owning the homes around them. “The landlord knew he could make more money by keeping the home for longer and letting rent go up,” Ms. Wood said. She secured her apartment eight years ago with the help of the Georgia Avenue Collaborative, but every year, she experiences the effects of rising rents on a property barely maintained by the landlord. Units and homes that could be afforded with available Section 8 vouchers are entirely inaccessible. Keeping homes out of production to make a windfall while homeless shelters fill up is not a market. In fact, it’s more like a sieve.

DC Arial Image

10th and F Street.

If you ask realtors in DC to point you in the direction of available land for purchase, you’ll find a parcel of land estimated to be $175,000. The land covers a vacant lot of roughly 5000 square feet in the Hillcrest neighborhood, within walking distance of all transit and shopping centers. Another lot rests upon the Riverfront development – roughly $200,000 for 631 square feet with zoning restrictions applied. Property owners need an incentive to make housing and land available to broader bases of socioeconomic status; by keeping real estate and making a profit from it, real estate is kept out of use and excludes communities that could live in the area. The incentives for property management and landowners to make housing and land more broadly available are minimal, given that they can accrue the highest profit by owning it long enough.

Starting with the gentrifying area of Dupont Circle, the entire city is like this. DC’s homelessness rate is one of the nation’s highest, and similarly to San Francisco, it tends to build over existing communities to attract higher-income residents.

East of the Anacostia, median income is falling – in fact, 2015’s American Community Survey, as cited by Kate Rabinowitz, mentions that the cluster in the Mayfair/Hillbrook district experienced a fall in median income by 22 percent.[1] Families experiencing homelessness and those impoverished areas are a sign that residents cannot afford available housing, resulting in a dynamic that favors higher-income residents.

DC Street Image

Penn Quarter. Photo credit: AirBnB

It’s harder to navigate DC nowadays: more cars commute than ever before, and public transit hasn’t gotten easier to use. The WMATA Daily Service Reports reveal that in 2015, DC Metro delays were 770 hours, up a third from last year. [2] Not only are many workers priced out of housing and live outside of DC in neighboring states like Virginia and Maryland, DC itself is finding that its longer-term residents eventually seek homes outside of the city because it is increasingly expensive to live and raise a family in DC.

As David Ricardo’s law of rent suggests – you pay to use what someone else could use more productively.[3] Rents are charged based on what the property owner knows you can afford. There’s no natural ceiling for that in DC – if the landowners know that everyone coming into the city can afford a higher rent, there is no way for those who are being paid minimum wage to keep up, because their wages are not rising on pace with the steady rise in housing and rental rates. It doesn’t stop there; the wealth distribution of the District, down to the median income, is not keeping up with the pace of housing development, leaving many priced out of secure housing.

– Roman Rivilis 

[1] http://www.datalensdc.com/gentrification-by-numbers.html

[2] http://www.datalensdc.com/has-wmata-bottomed-out.html

[3] https://en.wikipedia.org/wiki/Law_of_rent

 

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