DC residents pay a heavy price for living in the nation’s capital. Land of the free? No sir, it is not… not even close. In fact, DC is quickly becoming the land of high rent — a cost that continues to increase with no sign of slowing down.
In 2011, “Bloomberg Business Week” ranked DC as having one of the highest rent hikes in the country. According to the article, renters in the DC metro area see an annual increase of 7.4%, with the area’s rent average rounding out at $1,473 per month.
And while rent prices in District are not as high as New York and San Francisco, our city is not too far behind. Just this past spring, “The Huffington Post” published an article, based on a report released by the National Low Income Housing Coalition, that listed DC as the 10th most expensive city to live in with a side-by-side comparison of wages earned versus the cost of rent.
In our October 2011 reader poll follow-up, “Readers’ Rent Pain,” one local real estate agent said that the average prices in the 20009 zip code are around $1,400 for a studio, $2,000 for a one-bedroom and $3,000-plus for a two bedroom. “The real shocker is what’s happening with two-bedroom apartments; they are getting very expensive very fast.” Of the readers who took the poll, 36% reported paying more than $1,500 per month (that’s individual rent paid, not total price of shared apartments).
But rent hikes aren’t just hitting residents. DC’s own Shakespeare Theatre Company recently made headlines in “The New York Times” over a legal battle with its landlord, the Lansburgh Theatre. Last year, the Lansburgh told its 20-year tenant that the annual rent would jump from $70,000 to $480,000.
What’s Driving Rent Hikes?
So what’s driving this increase? For starters, the economy. Home ownership rates are at an all time low; people lost homes during the economic collapse, and others are waiting to purchase homes. Thus, rental properties are in demand. Moreover, lenders have returned to more restrictive lending practices when writing mortgages.
A second reason: The “booming” DC job market. Despite DC’s high unemployment rate (down now to 9.1 percent from 9.3 percent), the metro area still ranks high in job prospects. Federal government opportunities, private contractor jobs and an array of political positions make DC a very attractive city for recent college graduates, hungry for a job.
And last, but not least, DC’s revitalization of historic and traditionally lower-income areas. The 14th and U Streets corridor is just one example of the number of revitalization projects sweeping our city. Shaw, Columbia Heights, the Southwest Waterfront, Stadium/Armory, Capitol Hill (and the list goes on) are all areas under renovation, restoration and revitalization.
And what’s going in to these hip new neighborhoods? Brand new, expensive luxury apartments. And while these projects are vital to the growth of the city, they are simultaneously detrimental, since the increased cost of living in these areas displaces residents who can no longer afford to stay.
So I guess my question is this: How can DC be the country’s most livable city if no one can afford to live here? How high is too high and when will rent prices stop climbing?