Breaking down affordable housing barriers in the nation's capital

Housing affordability remains a significant challenge in Washington D.C., where rent in the city is about $700 more than the national average, according to CoStar’s third quarter reports . So it’s no surprise that almost half the city’s renters are categorized as rent-burdened , meaning they spend more than 30 percent of their income on housing.

In 2022, only about a third of D.C.’s essential workers lived inside the District. Another 12% of the city’s population—an estimated 82,000 residents—do not have stable housing . For employers, having a workforce that lives closer to their workplace can translate to lower turnover, lower absenteeism, and higher productivity. Research also shows benefits for cities: better job proximity can mean higher growth potential and increased revenue capacity, along with many other benefits . The D.C. government is trying to make changes to its approach to housing—including rewriting a comprehensive plan to combat displacement and boost affordable housing. But this isn’t an issue that should be tackled alone. Cross-sector collaboration is crucial to making housing more affordable in the D.C. area.

Since 2019, we have invested more than $1.1 billion in affordable housing and community services in the D.C. area—including $938 million allocated to developing and financing thousands of affordable rental homes inside city limits. We also pledged another $400 million between 2021 and 2026 to improve housing affordability and stability for underserved households nationwide, including Washington D.C.

Finding a way forward

Since the issue of affordable housing is complex, JPMorganChase is taking a collaborative, ecosystem-building approach with local nonprofits and community organizations to ensure the solutions we support are sustainable and community-driven.

This starts with ensuring we understand the potential root causes and asking questions like “why do renters get priced out of markets?” This is a fundamentally important step, says Brett Macleod, Executive Director, Community Development Banking at JPMorganChase. He and his team use data, research, and outside expertise to uncover the reasons for displacement and potential fixes.

“We’re looking at ways to prevent displacement of existing businesses and existing residents who could get priced out of the market when new projects and developments occur,” says Macleod. “Our goal is to harness our collective housing expertise, insights, and resources across the firm to drive positive change and better serve the community.”

Funding the future

One problem smaller affordable housing developers face in markets like D.C. is a lack of fast access to capital. Even if smaller developers know they will eventually receive private or government funding, they are typically competing against developers with significant financial resources. These competing buyers have ready access to cash, which upends the playing field. Even if a seller wants to make a deal with a smaller housing developer, most can’t afford to sit idle for six months or even a year while low-income housing tax credits or other subsidy sources come to fruition. That’s where Macleod and his team can help.

“We've specifically developed a program to help our borrowers who are focused on preserving affordable housing buy properties that would otherwise be converted into market rate buildings,” he says. “Our acquisition program is a stepping stone for an affordable housing developer to buy the property and then go through the longer-term financing structure they need.”

“We recognize the importance of the 300-unit new construction transaction that's being built by a national for-profit developer with a really big balance sheet,” says Macleod. “But we also recognize the importance of financing the 43-unit rehab deal that's being run by a local nonprofit.”

We’re also thinking big, because that is what it’s going to take to solve the housing challenge in Washington D.C. For example, JPMorganChase is working with national and local nonprofits to develop and preserve affordable rental homes, while also advancing broader solutions that help expand homeownership opportunities for locals. By supporting both rental and homeownership solutions, we can provide homes to D.C. residents of all income levels. The fact that these homes allow people to live closer to where they work means less traffic, better work attendance, and improved air quality, among other benefits, according to the D.C. Office of Planning.

“In many cases we are helping rebuild neighborhoods with the community’s input and support. We’re taking what was functionally obsolete housing and redeveloping it so we can help communities grow and thrive and improve resident quality of life,” says Macleod.

This kind of creative development rooted in the city’s history can help Washington D.C. write a future that works for all its residents—and it’s the kind of investment in the city that can go a long way to keeping D.C. residents in the city they love.