The Washington metropolitan area has become “the nation’s strongest regional economy,” but confronts an urgent and growing geographic disparity within the region between the locations of jobs and affordable housing. That is the major conclusion of the third annual Housing in the Nation’s Capital report released this month by the Fannie Mae Foundation.

The regional study was commissioned by the Fannie Mae Foundation and prepared by the Urban Institute Center for Metropolitan Housing and Communities. It covers an area including the District of Columbia and suburban areas in Maryland, Virginia and West Virginia.

Soaring housing costs are not only pushing the region’s working families to the budget “breaking point,” according to the study, they are also triggering significant downside effects in terms of traffic congestion, urban sprawl, pollution and long-term economic competitiveness.

The report “outlines the good news that the region is adding almost 100,000 new residents each year,” said Stacey D. Stewart, president and CEO of the Fannie Mae Foundation. “However, this extraordinary but unbalanced growth has resulted in some serious, unintended consequences for our region,” said Stewart. “It is now almost impossible for school teachers and nurses, for firefighters and police officers to live in the communities they serve,” she stated.

The report cites soaring home prices as a major factor, noting that in 2003 one in four single family homes sold for over $400,000, a sharp increase from one in nine in 2000. The average home in the District of Columbia sold for $382,000 in 2003, according to the study, an increase of 52 percent in three years.

Likewise, the report states that the average rent for a two-bedroom apartment in D.C. soared by 84 percent between 2001 and 2003. Spiraling prices and rents contribute to housing hardship for the region’s families, according the study, which notes that in the Washington region “more than half of all low-income households pay monthly housing costs that exceed 30 percent of income — the federal standard for affordability.”

The problem also extends to higher-wage categories. The report states, for example, that “in the inner suburbs, where only 15 percent of jobs pay more than $75,000, 30 percent of all housing units require incomes above that level.”

While it does not prescribe specific policy remedies, the study makes three broad recommendations: (1) expansion of housing production in higher density, mixed- income developments; (2) expanding the options for affordable housing region- wide; and (3) promoting more balanced job growth by expanding employment in areas where housing affordability options are more abundant.

The Fannie Mae Foundation is a private, nonprofit organization supported by Fannie Mae. Fannie Mae is a government-chartered corporation owned by shareholders. The company buys mortgages, repackages them and sells them to investors in order to keep the nation’s mortgage funds liquid.

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