Has the American Dream become an affordable apartment?
by Tamara Copeland
Washington Regional Association of Grantmakers
For several years now, the Washington Regional Association of Grantmakers (WRAG) has been discussing affordable housing. With an anticipated influx of residents into our area in the next decade, George Mason University’s Center for Regional Analysis predicts we will need 150,000 new units and that a large number of those units need to be for those in lower-income brackets.
For those lower-income individuals in the Greater Washington region, what constitutes an affordable home? I have been asking that question of many people over the last year. Folks shake their heads and say it depends. They talk about the high cost of land, the lack of government subsidies, and the need for transportation to areas on the edges of the region where the cost of land is less. But, I keep pushing. What is an affordable home in this region? That’s when the conversation turns to rental units, not houses.
It appears that there is no such thing in our region as an affordable house. According to 2013 census data, the average household income in metropolitan Washington, D.C. was $90,149, and depending on differing information in multiple sources, the average cost to purchase a house in the region seems to be somewhere around $450,000. When you do the math, that makes the average household in our region unable to purchase the average house in the region without being fiscally imprudent.
There is something fundamentally wrong with that.
My father, uncle, and aunt were all real estate brokers. I grew up in a family that reinforced the value of home ownership. My father used to say, “You can live in it, rent it, or borrow against it.” He, like many in our country, viewed owning a home not only as the symbol of achieving the American dream, but also as one of the key elements toward financial stability.
In our region, that reality doesn’t seem to be an option for thousands of people. Don’t get me wrong, I do agree with WRAG’s current work to promote and enable the production and preservation of affordable rental units. What is the solution to homelessness? A home! We want to do everything that we can to get people into a place that they know as home. Research supports the value of having a home, not just financially, but emotionally, psychologically, and practically.
But let’s not forget that we still need to find a solution to help low-income people purchase homes. Why? Because for most people a home – whether that is a traditional house or a condominium – is the largest asset that they will ever have. That asset is often a major part of what enables a family to move into the middle class.
I continue to believe what I learned from my family years ago – owning a home is fundamental for financial security. Financially accessible home ownership. Who will work with WRAG to make that happen?