As the housing market continues to slide, the resultant focus of American households is the mounting financial pressures on homeowners as well as the growing choice of homebuyers. However, we shouldn’t confuse decreased housing prices, such as last year’s 14.4% decrease in the home-price index, with an increase in affordable housing.
For the majority of low-income households, home ownership is an increasingly distant goal. Only 5% of homes sold in 2006 were affordable for families with an annual household income of $70,000. Considering that the median family income for 2007 was a mere $54,300, the prospects of home-ownership for low-income families remain extremely limited. Thus renting continues to be the primary outlet for low-income households when it comes to securing affordable housing. Unfortunately, the news we’re getting is still pretty bleak. Last year over 50% of renters were paying “unaffordable rents”, as defined by federal standards. It doesn’t take too much acuity to realize that a majority of those renters come from low-income households.
But let’s be fair: a housing market slide must have done something to make housing more affordable, right? The average rental price in the United States decreased by 7.7% last year, facilitated by an increase in rental property construction and the conversion of condo-units. That’s comforting to see, as it counters the trend in recent years of converting rental units into condos. However, the impact of a small percentage decrease in average rental prices is minimal in regard to affordable housing issues overall for low-income residents. So while the housing market slide might be annihilating both your property value and stock portfolio, it has done little to provide more affordable housing options for the District’s low-income residents.
With such a dim outlook on current housing affordability, what can be done to increase opportunities for low-income residents? That’s a question that many excellent DC area organizations are working to answer! Leaders of these organizations will be addressing these issues and more when they begin posting on our blog next week. Stay tuned!