It’s not rocket science: The more housing there is, the more affordable housing will be.
In cities with growing populations, the degree to which the creation of new apartment units track with the increased need for additional rental housing is the difference between soaring prices and a stable market.
D.C. has begun to prove this simple reality of supply and demand.
A report last month by real estate research firm Delta Associates indicated that D.C. rental prices dropped for the second consecutive quarter, following a rare drop in rents in the previous period. These drops were only the third decrease in rents since 2010.
District market-rate rents citywide were 1.3 percent lower on a year-to-year basis for newer Class A apartment buildings, and declined slightly less than one percent at Class B buildings. In the D.C. market, Class A buildings are typically larger apartment buildings constructed after 1991, with extensive resident amenities, while Class B buildings are generally older renovated buildings offering more limited amenity packages.
This decline in average rents was the result of a record number of new apartments hitting the market in the past year, totaling more than 11,000 units. Optimism that prices will continue to drop is based on an already-planned addition of nearly 14,000 new units in the next three years.
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