Housing in the Nation's Capital 2005

Housing in theNation’s CapitalJointly Sponsored by the Fannie Mae Foundation and the Urban InstituteFannie Mae Foundation4000 Wisconsin Avenue NWNorth Tower, Suite OneWashington, DC 20016-2804t: 202 274 8000 f: 202 274 8111www.fanniemaefoundation.orgwww.knowledgeplex.orgFMF R 258Fannie Mae FoundationHousing in the Nation’s Capital 20052005 Board of DirectorsDaniel H. MuddChairmanKenneth J. BaconVice ChairmanStacey D. StewartDirectorFloyd FlakeDirectorStephen GoldsmithDirector Charles V. GreenerDirectorColleen HernandezDirectorLouis W. HoyesDirectorStewart KwohDirectorRebecca R. SenhauserDirectorKaren Hastie WilliamsDirectorBarry ZigasTreasurerGlen S. HowardSecretaryOfficersStacey D. StewartPresident and CEOPeter BeardSenior Vice President, Policy and InformationJames H. CarrSenior Vice President, ResearchGlen S. HowardSenior Vice President and General CounselEllen LazarSenior Vice President, Housing InitiativesKevin P. SmithSenior Vice President and Chief Administrative Officer© Fannie Mae Foundation 2005.All Rights Reserved.The Fannie Mae Foundation, through its publications andother programs, is committed to the full and fair expositionof issues related to affordable housing and communitydevelopment. The opinions expressed in this publicationare those of the authors and do not necessarily representthe views of the Fannie Mae Foundation or its officers ordirectors.Photographs (except cover photo) by Joseph Dupesko.The Fannie Mae Foundation creates affordable homeownership and housing opportunities throughinnovative partnerships and initiatives that build healthy, vibrant communities across the UnitedStates. The Foundation is specially committed to improving the quality of life for the people of itshometown, Washington, D.C., and to enhancing the livability of the city’s neighborhoods. The Foundation,a private nonprofit organization supported solely by Fannie Mae, has regional offices in Dallas; Pasadena,Calif.; and Philadelphia. Foreword. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2About the Authors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Acknowledgments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Chapter 1City Revitalization and Regional Context . . . . . . . . . . . . . . . . . . . . . . . 15Chapter 2 Contrasts Across the District’s Neighborhoods . . . . . . . . . . . . . . . . . . 20Chapter 3 Homeownership Out of Reach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29Chapter 4 Narrowing Rental Options. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35Chapter 5Closing the Gap. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43Endnotes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56Appendices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57Prepared for the Fannie Mae Foundationby the Urban InstituteMargery Austin TurnerG. Thomas KingsleyKathryn L.S.PettitJessica CignaMichael Eiseman2005Housing in the Nation’s CapitalHOUSING IN THE NATION’S CAPITAL 2005 Last year’s Housing in the Nation’s Capitaladopted a regional perspective to illuminate thehousing affordability challenges confrontingWashington, D.C. The report showed that theregion’s strong but geographically unbalancedgrowth is fueling sprawl, degrading the envi-ronment, and — most ominously — strainingthe capacity of working families to find homesthey can afford. The report provided a portraitof a region under stress, struggling againstforces with the potential to do real harm tothequality of life throughout the Washingtonmetropolitan area.This year’s report uses a different, morefocused lens. It zooms in on the District ofColumbia and documents the impact of theregion’s prosperity on the city’s residentialrevitalization. The vigor of the District’srecent resurgence makes it easy to forgetthat the city has come a very long way in avery short time. Only a decade ago, homeprices were falling, households were fleeing,and housing development was declining.Today, these trends have been reversed.Home prices are increasing at double-digitrates, the city is adding households, andhomebuilding is occurring at a rate not seenin decades. Listless stagnation has given wayto robust development. These trends provide cause for celebration.The District stands at the center of what isarguably the