Thesis statement
This research paper investigates the rising cost of housing in DC making the low-income earners move outside the district. The analysis will be essential for policymakers and stakeholders to adopt a strategy for providing low-cost housing to the residents.
Introduction
The housing cost is rapidly increasing in DC with trends showing that low-income earners find it difficult to get affordable housing. This has contributed to the movement of blue-collar workers and low-income earners from the District in search of affordable housing. As Wolch, Byrne and Newell (2014) indicate, the low-income earners in the district use more than half their income to pay for housing which makes acquisition of other necessities difficult. On the other hand, the middle-income earners are believed to spend more than 30% of their income on housing. The rapid increase in the housing prices has caused a crunch in the consumer spending because there is no similar increase in their income. This research paper provides a definition of the policy issue, gives the background of this policy issue and appropriate policy theories to help stakeholders such as the United States Department of Housing and Urban Development and housing production trust fund to handle the problem.
Definition of the policy issue
Affordable housing problem is a major policy issue in DC. Many low income and middle-income earners in the city cannot afford good housing because of the sharp rise in price. Some residents are opting out of the district because of the high housing rates while others spend more than half of their average income to pay for housing. According to Rohe, Van Zandt and McCarthy (2013), those that spend more than half their income on rent are forced to forgo other necessities, a move that makes life difficult. About 20% or less is left for food and clothing since 30% goes to school fees and medical expenses. Those moving out of the district end up in deplorable living conditions in the slums, an incident that endangers the life of many residents. If the trend continues, the low and middle-income earners in the district are likely to face several negative effects that may affect the economy of the District.
According to DeLuca, Garboden and Rosenblatt (2013), some of the negative effects of the trend include;
Reduction of necessities such as food and health care.
People are also likely to divert fewer contributions towards retirement savings.
The children are likely to be attacked by diseases and lack the necessary equipment to enhance their school performance.
There is the likelihood of increased cases of crime in these areas where people cannot afford necessities and keep their children in school.
Such negative aspects affect the economic development of a region. Lack of affordable housing in a particular region also reduces the chances of such a region to remain competitive because the works?are not attracted to the region due to the high cost of living. Good policy measures need to be defined to help curb the problem in DC if the authority wants to help the economy of the district from deterioration.
Background
There has been a rapid growth in the cost of housing among DC residents making some move out of the district while others are forced to reduce their spending on necessities such as food and health care. Over the last decade, many residents have experienced difficulties in securing affordable housing. The number of low-cost houses has shrunk from 66,000 in the year 2002 to less than 30,000 currently. Private developers are acquiring the low-cost houses and changing them to high cost by increasing rent. According to Bolotnyy (2014), the high-income earners in the district have not been affected as lower and middle-income earners. A low-cost house in the district costs less than $800, which has currently escalated to about $1400.Many private housing providers are not offering low-cost housing. Residents in need of low-cost housing are left to depend on subsidized houses which are not enough. From a rate of $250 to $400 that the low-income earners used to pay, it moved to $800, and now it is impossible for them to afford $1400 for housing rent cost.
According to DeLuca, Garboden, and Rosenblatt (2013), the cost of housing in the District is increasing due to the growth in the number of young professionals that are leaving college and joining employment. In addition to the high number of professionals that are seeking residence in the region, the development of the neighborhood such as Woodland and Georgetown around the district is contributing to the escalation of housing prices. The upper end of the market with high-income earners also has had a sharp increase in housing rates, but the rates are less than the change in their levels of income. With an income increase of about $1600, a $1000 increase in housing cost does not affect high-income earners. It is the low and middle-income earners that have been highly affected by the changes. According to the United States Department of Housing and Urban Development, many low-income families in DC have severe rent burdens, and this could get worse if necessary action is not taken as Hughen and Read (2014) state.
Appropriate policy and theory measures
Housing development planners need to embrace a plan that incorporates affordable housing in the city. This will reduce the number of low income and middle-income earners moving out of the city in search of affordable housing elsewhere. A preservation plan for affordable houses in the city is essential. According to Schwartz (2014), the strategy should embrace an acquisition and renovation funds for affordable housing. The authority should increase incentives to allow those putting up buildings to consider affordability. Coming up with good legislation and offering financing options that are affordable to the tenants will be an effective measure. The legislation in place should offer the tenants an opportunity to purchase the houses they rent. Vacant houses should be occupied immediately through public financing. The local rent supplement program in DC should be supported to allow low-income earners get affordable housing. Embracing the inclusionary zoning program in the district will be essential to help low and moderate income earners have access to housing. For example, the Coalition for Nonprofit Housing and Economic Development (CNHED) leads nonprofit community development organizations to ensure and provide housing and economic opportunities for the low and moderate incomes resident throughout DC. CNHED established in 2000, and since then the agency is helping the residents by providing many programs, such as housing assistance. Also, CNHED provides coordination between agencies to offer the best plans for housing affordability. CNHED's mission is to improve the quality of life in DS’s neighborhood through advocacy, training, capacity building, information sharing, communications and research.This agency wants to prevent homelessness and to keep that diversity in DC that has always been famous of.CNHED is one of the small other projects in DC that need to be funded to help provide housing affordability for the residents with low and moderate incomes.
References
Bolotnyy, V. (2014). The Government‐Sponsored Enterprises and the Mortgage Crisis: The Role of the Affordable Housing Goals. Real Estate Economics, 42(3), 724-755.
DeLuca, S., Garboden, P. M., & Rosenblatt, P. (2013). Segregating Shelter How Housing Policies Shape the Residential Locations of Low-Income Minority Families. The ANNALS of the American Academy of Political and Social Science, 647(1), 268-299.
Hughen, W. K., & Read, D. C. (2014).Inclusionary housing policies, stigma effects, and strategic production decisions.The Journal of Real Estate Finance and Economics, 48(4), 589-610.
Rohe, W. M., Van Zandt, S., & McCarthy, G. (2013). The social benefits and costs of homeownership: A critical assessment of the research. The affordable housing reader, 40, 00-01.
Schwartz, A. F. (2014). Housing policy in the United States. Routledge.
Wolch, J. R., Byrne, J., & Newell, J. P. (2014). Urban green space, public health, and environmental justice: The challenge of making cities ‘just green enough’. Landscape and Urban Planning, 125, 234-244.
CNHED. (n.d.). The Coalition for Nonprofit Housing and Economic Development. Retrieved from https://www.cnhed.org/about/
Cort, C. (2014). We support Bill 20-594, the Disposition of District Land for Affordable Housing Amendment Act of 2013, because affordable housing built on site, especially in high cost or rising value neighborhoods, should be a top priority for public land dispositions. Policy.