Appraising the District’s rentals

April 01, 2020
  • Yesim Sayin Taylor
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Photo/BeyondDC. CC BY-NC-ND 2.0. (Source)

The D.C. Policy Center report, Appraising the District’s rentalsprovides a comprehensive picture of the District’s rental housing to evaluate its capacity to create economically inclusive neighborhoods in the District of Columbia.

The report combines multiple data sources to estimate the number and type of rental units and the buildings that hold them, and the rents that prevail at different types of rentals across the city.

The report provides extensive data on rental apartment buildings including the rent-controlled stock as well as rental units outside the rental apartment buildings including condominiums, single-family homes, and flats.

Author’s note: We initially planned to publish this report on March 17, 2020. But with the breaking of the COVID-19 pandemic, we postponed; it seemed insignificant when our world was changing so quickly with great uncertainties about the health and wellbeing of D.C. residents and the city’s economy.

These uncertainties are still with us as of April 1, 2020, our publication date. But there is also great interest in how best to help renters who are facing job losses while balancing the needs of housing providers, who must continue operations. Given these interests, we think that this report can provide important information that could help with the difficult choices District policymakers must make in the next few months and as recovery begins.

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Summary of findings

The report finds that the District has too few rental apartments to serve all renter households: The city has nearly 40,000 households who should not be paying more than $750 per month to keep their rent affordable (defined as less than 30 percent of household income), but fewer than 800 rental apartments with rents below that level.  Competing with them are  41,000 renter households who could pay upwards of $2,700 per month without being burdened (and 15,500 rental apartments with rents in this range). Both groups put pressure on the city’s rental apartment market with 124,600 units. The shadow rental market—defined as the less regulated rentals in single-family homes, condominiums, and such—fills the gap by offering units at a wide variety of sizes and prices.

The city’s estimated 73,000 rent-controlled apartments have lower rents compared to uncontrolled units. Rent-controlled apartment buildings are everywhere, but despite their lower rents, they have not created economic inclusion by attracting a mix of  high- and low-income renters.  Where rents in rent-controlled buildings are low, renters’ estimated burdens are high and where rents are high, renter’s estimated burdens are low. The presence of rent-controlled units in a neighborhood, however, appears to mitigate displacement. A larger share of residents stays in place in census tracts where rent-controlled-units are a larger share of the housing stock. Similarly, a strong presence of rent-controlled stock is correlated with a smaller loss in minority populations.

Download the fact sheet: Summary of findings [PDF]


Policy: Inclusionary Conversions

This report proposes a new policy tool, Inclusionary Conversions, that takes advantage of the relatively lower rents and the ubiquity of the city’s rent-controlled buildings to create subsidized affordable housing, especially in highly resourced parts of the city where it has been difficult to create subsidized units in the past. Under this approach, the District would convert a portion of existing rent-controlled units into designated affordable units with covenants. Once the conversion takes place, the converted unit would operate in the same way as an Inclusionary Zoning unit: its rents would be capped at the desired affordability target for the duration of the covenants, and the unit would be made available only for income-eligible tenants. In return, the landlord would receive financing support from the District that is the equivalent of the difference between the rent-controlled rent and the capped-rent.

Because of where rent-controlled units are, the highest number of Inclusionary Conversion units can be in parts of the city where existing affordable housing programs have not been successful.

And, because the model relies on financing the gap between a subsidized unit and the lower rents in rent-controlled buildings, Inclusionary Conversions would require a much smaller public subsidy than needed under current affordability programs.

Download the fact sheet: Inclusionary Conversions [PDF]


Read the report online

Download the full report: Appraising the District’s rentals [PDF]

Author

Yesim Sayin Taylor

Executive Director
D.C. Policy Center

Yesim Sayin Taylor is the founding Executive Director of the D.C. Policy Center.

With over twenty years of public policy experience in the District of Columbia, Yesim is recognized by policymakers, advocates and the media as a source of reliable, balanced analyses on the District’s economy and demography.  Yesim’s research interests include economic and fiscal policy, urban economic development, housing, and education. She is especially focused on how COVID-19 pandemic is changing regional and interregional economic interdependencies and what this means for urban policy. Her work is frequently covered in the media, including the Washington Post, the Washington Business Journal, the New York Times, the Wall Street Journal, WAMU, and the Washington City Paper, among others.

Before joining the D.C. Policy Center, Yesim worked at the District of Columbia Office of the Chief Financial Officer leading the team that scored the fiscal impact of all legislation the District considered. She frequently testified on high profile legislation and worked closely with the executive and Council staff to ensure that policymakers fully understand the fiscal implications of their proposed legislation. Yesim also has worked in the private sector, and consulted with international organization on a large portfolio of public finance topics.

Yesim holds a Ph.D. in economics from George Mason University in Fairfax, Virginia, and a bachelor’s degree in Political Science and International Relations from Bogazici University, located in Istanbul, Turkey.