New analysis from the Urban Institute studies the Washington D.C. housing market, as it faces “serious housing challenges” that includes regional growth and rising home costs.
“These pressures cause especially steep housing cost increases and displacement in some communities that have historically been home to people with low and moderate incomes and people of color,” said Margery Austin Turner, the author of the report.
The report adds that the arrival of new businesses, jobs, and residents will only cause more issues with Washington’s challenges.
Turner said that unless there is an increase in the supply of housing, there will be more competition for a constrained stock and prices will continue to rise.
A new report by Redfin found that Washington D.C. came in at No. 12 for the most competitive markets among Redfin agents. The report states that 8.7% of all offers in August faced competition, which is a steep year-over-year drop from 41%. The competition rate fell from 9.3% in July.
“Inaction on housing affordability challenges could ultimately undermine the region’s future economic growth and prosperity,” Turner said. “Housing challenges like these can undermine worker productivity, make it harder for companies to attract and retain employees, and discourage companies from locating in the area.
“Recent job and population trends suggest that housing constraints and affordability challenges may already be slowing employment growth and causing people to leave the Washington region.”
Turner said the area needs to follow several steps to increase the future outlook of its housing market. She said the area needs to shrink the affordability gap, as the number of low-cost housing options falls below household needs by 264,000.
Housing production needs to keep pace, Turner said, and she added that projections by the Metropolitan Washington Council of Governments found the regions needs 374,000 more housing units by 2030.
Lastly, Turner says Washington D.C. needs to add at least 40% more middle-cost housing units to match expected household needs.