Durable Growth

Supply, meet demand: Lessons in housing from the DC region

Holdout by mj*laflaca, on Flickr

Holdout by mj*laflaca, on Flickr

Rising rents have led to much consternation in San Francisco. People are outraged as luxury developments displace the poor from their homes, disrupting communities and threatening the very character of the City.

SPUR caused a stir by suggesting that adding more housing could slow, or even stop, the rise. My own neoliberal “market urbanist” position has come under fire as well for suggesting market forces could be tamed by increasing supply. [Coincidentally, progressive urbanist perspectives are welcome on Vibrant Bay Area as well; email us if you’re interested in writing. -ed]

Washington, DC, however, shows the concept in practice. Rising rents spurred new development, which has halted the rise in most areas and slowed it in particularly high-demand parts of town. Nearly all of this growth has been along the region’s Metrorail subway system, too, so rising population has not equated to rising traffic.

And, importantly for keeping urban character alive, quite a bit of this growth has occurred outside the city core, often in new urban centers in what were suburban strip-mall landscapes. To San Francisco, this has been the equivalent of tens of thousands of new housing units along the East Bay BART lines and Caltrain, and the virtual elimination of the urban strip mall.

That’s not to say DC has been immune to displacement. The once-burned-out H Street NE corridor gentrified quickly, as has Hispanic Columbia Heights. African-American Petworth and Brookland are coming under pressure from well-heeled renters, too.

But the thousands of units in the suburbs and in the city’s center have given these areas time to prepare. Affordable housing, inclusionary zoning, and various direct legislative efforts to keep people in their homes can be attempted, improved, and applied to neighborhoods that have yet to be overwhelmed. Areas without any pressure, armed with these protections, are starting to wonder when their day will come.

Anecdotally, when searching for apartments two years ago, basement units were around $950-$1,200 per month, a sharp spike from a search three years prior, before many luxury units were completed. A similar search last month saw basement units at nearly the same price, around $950-$1,300 per month in the central city.

In other words, while DC became wealthier and rents increased, the bottom of the housing market remained stable. Now even the top of the market is starting to stabilize.

This is how the housing market is supposed to work: rents go up, people see they can make a profit, they build housing, rents stabilize and drop. This cycle is possible, and the DC region is living proof.

UPDATE: According to Forbes, the DC metro area’s average rent has actually declined by 1.4 percent over the past year even though the region’s population is booming. To have rents fall despite a rapidly rising population – 1,300 to the center city each month alone – is astounding.

Written by David Edmondson

David Edmondson

David is a native Marinite working in Washington, DC. He writes about how to apply smart-growth and urbanist thinking to the low-density towns of his home.

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