The Hogan Administration recently announced the first home purchase under a new homeownership initiative designed to ease the burden of student debt. According to a press release, Maryland SmartBuy, within the Department of Housing and Community Development (DHCD), is the first program of its kind in the country and will make move-in-ready homes available to buyers while eliminating student loan debt burden, which is often a significant barrier to homeownership for younger homebuyers. To learn more about the initiative, click here.

Emily Cadik, Enterprise Community Partners

Stephanie Kinsman, Red Stone Equity Partners

Angela Kelcher, Fannie Mae

Affordable Housing Finance recently announced the recipients of its 2016 Young Leader Awards,  among which are three HAND members! Emily Cadik of Enterprise Community Partners, Stephanie Kinsman of Red Stone Equity Partners, and Angela Kelcher of Fannie Mae were three of six honorees recognized for their work in affordable housing. All of the Young Leaders are age 40 or younger,  and “have made substantial contributions on the debt, equity, policy, and preservation sides of the industry.” You can read more here.

Congratulations to Emily, Stephanie, Angela and all of the Young Leaders!

Photo courtesy of Kate Gardiner

By Lisa Sturtevant, PhD

According to recent American Community Survey (ACS) data, more than one in five households in the District of Columbia is severely cost burdened, including 27 percent of renters and 12 percent of home owners. When individuals and families pay a disproportionately high share of their income on housing—50 percent or more—they often face challenges paying for other necessities, including food, health care, child care and transportation. In DC, about 60,000 households face this challenge. However, the rates of severe cost burden vary substantially for different segments of the population. Demographic characteristics like age and immigration status matter, but household income is the primary determinant of whether a household is severely cost burdened. While not surprising, this suggests opportunities for the housing industry and workforce development organizations to work together to expand housing options by both increasing the housing supply and growing incomes of residents of DC and the rest of the region.

Some populations in the District are more likely than others to face affordability challenges. The rate of severely cost burdened households is higher among renters (27.4 percent) than for the overall population. While seniors age 65 or older are just about as likely as the overall population in DC to be severely cost burdened, the challenges are greater for the more vulnerable 85+ senior population (24.8 percent are severely cost burdened) and people with disabilities (33.6 percent are severely cost burdened). Single-parent families and immigrant households are also disproportionately cost burdened, with rates of severe cost burden of 32.2 percent and 25.3 percent, respectively.

But the single biggest factor that is associated with cost burden is income. Most low-income families and individuals find it difficult to find affordable housing in the District, including households with full-time workers. An individual working a full-time job at the city’s minimum wage (currently $11.50 per hour) would earn about $24,000 a year. Nearly 70 percent of households with incomes at or below this full-time minimum wage worker salary are severely cost burdened, paying half or more of that income every month towards housing costs. This group of lower-income households includes non-working households, as well, but this particular statistic is emblematic of the struggles of low-wage working households in the city and, indeed, throughout the region.

Look what happens when you examine the rates of severe cost burden only for households with incomes above the city’s minimum wage. The rates of severe cost burden are significantly lower for all groups with a household income higher than what a full-time minimum wage worker would earn in a year. About nine percent of these higher-income older seniors (age 85+) and immigrants are severely cost burdened. Among single-parents and immigrants, about 11 percent are severely cost burdened if they earn income greater than the full-time city minimum wage. These shares are dramatically lower than for the same groups that earn lower incomes.

The District of Columbia is among a growing number of states and localities that has instituted a minimum wage that is higher than the federal minimum and has planned increases. By 2020, the minimum wage in DC is set to rise to $15 per hour. A full-time, year-round worker at this wage would earn $31,200 annually. In Maryland, the statewide minimum wage increased from $8.25 to $8.75 per hour in October but in Montgomery and Prince George’s counties, the local minimum wage is $10.75 per hour. In Virginia, the minimum wage remains at the Federal level of $7.25 per hour.

Advocating for a higher minimum wage—or a living wage—in the region’s jurisdictions would help put more money in the pockets of people in lower-skill, lower-wage jobs. With more money, it could be easier for these individuals and families to find housing they can afford. However, it is possible—though by no means conclusive—that an increase in a local minimum wage could actually lead to increases in rents at the lower level. A coordinated effort of increasing wages AND expanding housing supply is the best way to ensure wage gains translate into access to more affordable housing in the city and in the wider Washington DC region. To that end, the housing industry and workforce development community should have a shared goal of working together to help alleviate the challenge for the many households living with incomes that are too low and housing costs that are too high.

The District of Columbia Housing Finance Agency’s (DCHFA) Executive Director Todd A. Lee recently named Christopher E. Donald, Director of Multifamily Lending and Neighborhood Investments (formerly the Public Finance department). Donald will oversee the day-to-day operations of the department, which financed 14 developments in Fiscal Year 2016, and will result in the production or preservation of 2,090 affordable units for D.C. residents.  “Christopher’s background in real estate finance and zeal for community building is the precise combination of skills and approach necessary to lead DCHFA’s multifamily division,” remarked Executive Director Lee on Donald’s hiring. To read the complete press release, click here.