The D.C. Region's Housing Shortfall – A Critical Analysis

The D.C. Region's Housing Shortfall – A Critical Analysis

The Urgent Need for New Homes

In 2019, a coalition of elected leaders from the D.C. area declared that the region needed to build a minimum of 320,000 housing units within the next decade to keep up with its growth. More than a third of the way through this decade, however, a Washington Post analysis reveals that the region is significantly behind schedule.

The Metropolitan Washington Council of Governments (COG), consisting of regional lawmakers, set a target requiring the construction of over 87 new homes per day to mitigate the worsening housing shortage. Unfortunately, the region has only managed to build an average of 60 units per day from 2020 to 2023, resulting in a deficit of more than 40,000 units, according to data analyzed by The Post from the Housing Indicator Tool, the Housing Association of Nonprofit Developers (HAND), and the Urban Institute.

Uneven Housing Production Across the Region

Housing production is not evenly distributed across the D.C. region. While Washington, D.C., Arlington County, Falls Church, and Alexandria are on track to exceed their housing targets, nine other jurisdictions represented by COG are falling short. Fairfax County, the region's most populous jurisdiction, is only set to achieve 36 percent of its target.

Even though D.C., Prince George’s County, Montgomery County, and Alexandria have integrated COG’s targets into their housing policies, some leaders, such as Montgomery County Executive Marc Elrich, have criticized these targets for not accurately reflecting the region’s housing needs. Officials from Loudoun and Prince William counties have expressed support for the targets but face difficulties meeting them.

Challenges in Meeting Housing Targets

Several factors have contributed to the shortfall in housing production. The coronavirus pandemic and higher interest rates have created a challenging economic environment for developers. "The current economic environment with higher interest rates has been challenging for developers," said Russell Danao-Schroeder, principal planner for Arlington County. Additionally, a nationwide shortage of over 700,000 construction workers has further exacerbated the issue, according to the Home Builders Institute.

Despite these challenges, some officials remain optimistic about improving housing production post-pandemic. Aspasia Xypolia, director of Prince George's County’s Department of Housing and Community Development, believes that with lower interest rates and better financing options, the county may be able to ramp up housing construction.

At the region's current pace, only four jurisdictions will reach the regional housing target by 2030.

Alternative Housing Production Goals

The Urban Institute has proposed a lower regional housing production target of around 250,000 units from 2020 to 2030. Even with this reduced goal, only Arlington County, Alexandria, and D.C. are on track to meet their targets, although Frederick and Loudoun counties are close.

The Urban Institute also recommends that half of the new housing units should be affordable to households earning about 80 percent of the region's median income, which translates to monthly housing costs of approximately $2,300. Currently, no jurisdiction is meeting even 20 percent of this affordability goal, according to The Post's analysis.

Differing Views on Housing Needs

Marc Elrich has criticized COG’s housing targets, arguing that they are based on faulty assumptions. He believes that these targets create unnecessary panic about the influx of people moving into the region. Elrich highlights that Montgomery County requires developers to allocate 15 percent of units in new projects for low-income households, a requirement the county has met according to HAND-Urban Institute data. However, the county is still only on track to produce just over half the homes recommended by COG.

Efforts to Address Housing Affordability

Some jurisdictions are grappling with housing affordability issues more recently and are making strides to catch up. Loudoun County, for instance, established its Department of Housing and Community Development only two years ago. "For an agency that is only two years old, we are doing a pretty good job," said John Hall, the department's director. Despite its newness, Loudoun is nearly on pace to meet the COG housing production target.

Conclusion

The D.C. region faces significant challenges in meeting its ambitious housing production goals. While some areas are making commendable progress, many others lag, hindered by economic challenges and labor shortages. As stakeholders navigate these hurdles, ongoing efforts and adjustments to policies will be crucial to closing the gap and ensuring the region can accommodate its growing population.



KATIE WEDGE
(571) 517-2012
katie.jacobsandco.com


 
JACOBS & CO. REAL ESTATE, LLC.
12923 Fitzwater Dr. Nokesville, VA 20155 
(703) 594-3800 | jacobsandco.com

Post a Comment