Report: The DC Area is Expensive, But Not Expansive
Development in the District and its suburbs has boomed in recent years, but a recent report shows that the DC area has become pricey due to its slowing rate of expansion since the 1970s.
As BuildZoom chief economist Issi Romem explains, there is an inverse relationship between growth in housing prices and outward expansion in metropolitan areas. Although U.S. cities have expanded into surrounding areas at a steady clip since the post-World War II era, they have done so in two different ways: expansively or expensively.
Expansive cities have developed at an accelerated rate, coupling their economic strength with strong population growth. Conversely, expensive cities have sharply reduced their rate of outward expansion in recent decades leading to higher property values.
A snapshot of development in the DC area in the 1970s
A snapshot of development in the DC area in the 2000s
DC offers a clear example of the development dynamic of expensive cities, wherein an inelastic housing supply has led to a reactive style of development in response to rising property values.
story continues belowloading...
story continues above
“[Expensive cities like DC] create jobs and opportunities that attract many people, but when these people compete with each other over a limited housing stock the highest bidders prevail, raising home values and rents,” the BuildZoom report stated. “A key implication of housing cost escalation is that it sorts people into and out of these cities based on their financial ability, churning out a population that is increasingly well off. Because affluent residents tend to ratchet up land use regulation more than others, the process results in an even more constrained housing supply that raises property values further in a vicious cycle.”
In the DC area, stringent building and land-use regulations are also coupled with the development challenges posed by natural topography. The cycle of rising housing prices, inelastic supply and slow-rolling development will continue unless the area gets more creative and expansive in its growth.
Click here to see more data and analysis from other cities around the country.
This article originally published at https://dc.urbanturf.com/articles/blog/how_dcs_development_rate_has_made_it_expensive/11122.
Most Popular... This Week • Last 30 Days • Ever
Ten years later, plans to construct nearly 150 townhomes at DC's most hotly debated d... read »
LEGO lovers will likely be first in line for the National Building Museum's latest ex... read »
Last year, Shiloh Baptist Church selected Monarch Urban to redevelop 1515 9th Street ... read »
JBG Smith has plans for a seven-story project along Crystal Drive.... read »
The "trailer park" where homes sell for millions; a renters utopia; and ideas for whe... read »
Virginia's homebuyer assistance programs can seem complex. This edition of First-Time... read »
The residential projects that have sprouted up on the Maryland and DC sides of the Fr... read »
With a groundbreaking ceremony on Wednesday, the redevelopment of the Georgetown Wes... read »
The 23,600 square-foot mansion just hit the market, and would set a record if it fetc... read »
The immaculately kept 100-year-old house features six bedrooms and four-and-a-half ba... read »
With this weekend's DC houseboat tour a day away, UrbanTurf thought it only fitting t... read »
President Obama travels to Denver this morning to sign the stimulus bill that has bee... read »
In this week's installment of Ask An Agent, a reader wonders if there is a rule for h... read »
As The Wharf prepares to begin construction, DC's houseboat community heads to its ne... read »
In this week's installment of Ask An Agent, a reader asks a fairly common question th... read »
- Reservoir District: 146 Townhomes Planned at McMillan Site Look For Final Design Approval
- BRICK CITY: DC's New LEGO Exhibit Brings in Architecture From Around the World
- HPO Recommends Approval For 45-Unit Condo Development Pitched For Former Church Site in Shaw
- And Another One: Block-Long, 370-Unit Development Pitched For Crystal City
- Wednesday's Must Reads
- First-Timer Primer: Virginia's Home Buyer Assistance Programs
- Mall Conversions, Trader Joes? The 1,500 Units in the Friendship Heights Pipeline
- The Four Seasons Private Residences in Georgetown Break Ground
- DC's Blaine Mansion Lists For $30 Million, A Potentially Record-Setting Price in the City
- Now Selling: A 16th Street Heights Victorian on an Island of Its Own
DC Real Estate Guides
Short guides to navigating the DC-area real estate market
We've collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Visit guides.urbanturf.com or start browsing below!
Intro guides for first-time home buyers
Awesome and unusual real estate from across the DC Metro