D.C. an Unaffordable Place to Rent

Washington DC Real EstateIt is always surprising to me how much space a renter gets for $2,000 or less a month. For many parts of Northwest D.C., $2,000 a month rents a junior one bedroom. For most places in the country, this rent is considered delusional whereas it has become a norm in the District.

The D.C. housing market is one of the strongest and most expensive in the United States. With steadily rising prices and a constant demand for housing, the market for owning a house is consistently a great investment. However, the ability to own carries a high barrier for entry for some potential buyers (more on that below). Moreover, the market for renting is a complicated story. Housing inventory has always been a problem within the District with a limited supply and restrictions on the size of buildings that can be developed. As more people move to the District with hopes of renting an apartment, rents are expected to rise.

A recent study conducted by RealtyTrac analyzed the rental affordability in most major urban markets. Affordability was defined not only by the price of average rent, but also by the proportion of living wages necessary to afford rent. The findings put Washington, D.C. as the second least affordable market in the United States (behind only Honolulu, Hawaii). The study predicts that renting in the D.C. area requires nearly 60 percent of average wages, which is much higher than the national average of 37 percent. Moreover, rents are rising at an average over 3.7 percent whereas wages increase only around 2.5 percent per year.

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Authored By Tim Savoy
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