Housing in the Nation's Capital 2004

Housing in theNation’s Capital2004Jointly Sponsored by the Fannie Mae Foundation and the Urban Institute Board of DirectorsFranklin D. Raines ChairmanStacey D. Stewart DirectorKenneth J. Bacon DirectorFloyd Flake DirectorStephen Goldsmith DirectorJamie S. Gorelick DirectorCharles V. Greener DirectorColleen Hernandez DirectorLouis W. Hoyes DirectorStewart Kwoh DirectorRobert J. LevinTreasurer and DirectorWilliam R. Maloni DirectorDaniel H. Mudd DirectorJohn Sasso DirectorRebecca R. Senhauser DirectorH. Patrick Swygert DirectorKaren Hastie Williams DirectorBarry Zigas DirectorGlen S. Howard SecretaryOfficersStacey D. Stewart President and CEOBeverly L. BarnesSenior VicePresident, CommunicationsPeter BeardSenior Vice President,Policy and InformationJames H. CarrSenior Vice President,ResearchGlen S. Howard General Counsel andSenior Vice PresidentEllen LazarSenior Vice President,Housing and Community InitiativesKevin SmithSenior Vice President,Finance and AdministrationThe Fannie Mae Foundation creates affordable homeownership and housingopportunities through innovative partnerships and initiatives that build healthy,vibrant communities across the United States. The Foundation is speciallycommitted to improving the quality of life for the people of its hometown,Washington, D.C., and to enhancing the livability of the city’s neighborhoods.Headquartered in Washington, D.C., the Foundation is a private, nonprofit organ-ization whose sole source of support is Fannie Mae, and has regional offices inAtlanta, Chicago, Dallas, Pasadena, and Philadelphia.© Fannie Mae Foundation 2004.All Rights Reserved.The Fannie Mae Foundation, through its publications and other programs, is committed to the full andfair exposition of issues related to affordable housing and community development. The opinionsexpressed in this publication are those of the authors and do not necessarily represent the views ofthe Fannie Mae Foundation or its officers or directors. HOUSING IN THE NATION’S CAPITAL 2004Table of ContentsHousing in the Nation’s Capital2004Foreword. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iiAbout the Authors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ivAcknowledgments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ivExecutive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Chapter 1Economic Strength and Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Chapter 2 Housing Production Shortfalls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Chapter 3 Booming Home Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25Chapter 4 Rental Market Challenges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33Chapter 5 Housing Hardship and Housing Assistance . . . . . . . . . . . . . . . . . . . . . 39Chapter 6 Unbalanced Patterns of Employment and Housing Opportunity . . . . 47Chapter 7 Strategic Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54Endnotes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65Appendixes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67Prepared for the Fannie Mae Foundationby the Urban InstituteMargery Austin TurnerG. Thomas KingsleyKathryn L. S. PettitNoah SawyerTHE URBAN INSTITUTEWASHINGTON, DC In 2002, when the Fannie Mae Foundation and the Urban Institutelaunched Housing in the Nation’s Capital,we hoped it would prove usefulbeyond the somewhat narrow confines of the affordable housing commu-nity. Your response suggests that we succeeded. Policy-makers, businessleaders, higher education faculty, and citizen activists all assure us of itsvalue as both a practical and analytical tool. This year we’ve introducedseveral changes that should make the report even more valuable to morepeople. We’ve shortened it and simplified the presentation of statistics.We’ve made it more readable and given it a stronger thematic center. This year’s report focuses on the consequences of our region’sexceptionally strong but geographically unbalanced growth. TheWashington metropolitan area now stands as the nation’s strongestregional economy, and we are generating thousands of new employ-ment opportunities each month. But the region’s best-paying jobs areunevenly distributed, with large concentrations in the District and alongthe burgeoning Dulles and I-270 corridors. Strong but uneven growth has sign