This website is under construction and will be completed soon.
Gentrification is defined as the influx of higher income, generally more White populations into a geographic area while lower-income, generally minority residents are forced out due to increasing costs of living. Gentrification and the declining housing affordability in Southwest have many origins. Developments can be roughly characterized into one of three types. The most common type in SW is government-led involving properties such as the Wharf, Randall School, and the SW Towncenter. The traditional market-driven type mostly occurs in the active industrial sites and brownfields that make up Buzzard Point. SW churches with predominant white congregations have overwhelmingly produced luxury, market housing. Affordable housing remains a major challenge in the Southwest Waterfront neighborhood.
Chapter 1: Gentrification Sources by Property Type
Chapter 2: Black Displacement
Chapter 3: Declining Affordability
Chapter 4: Current Challenges
Chapter 2: Black Displacement
Chapter 3: Declining Affordability
Chapter 4: Current Challenges
CHAPTER 1: Gentrification Sources by Property Type
(Most common) Government-led - involves the direct role of government through the selling or leasing of public land. Seven properties fall under this classification: the Wharf, 4th St Towncenter** (Waterfront Station I (next to Safeway and across 4th), Eliot, and Waterfront Station II (lot next to CVS)**), Engine Co. 13 project (400 E Street and 555 E Street) and Randall School Redevelopment**.
Approximately, public projects are seeking to produce 3,590 units - constructed or approved not-constructed. Of the 747 "affordable" units, only 386 or 11% have produced actual affordable housing at 60% AMI or below. The remaining "affordable" housing exceeds 60% AMI and can be upwards of 120% of AMI, as with examples at the Wharf and Randall School redevelopment. 55 of the 386 (14%) actual affordable units are reserved for seniors.
The District approved $300 million in public subsidies for the Wharf project, which used former public land valued at $95 million but was sold to Paramount Development Corporation for a laughable $1. "Paramount is run by Ben Soto, the campaign treasurer for both former Mayor Adrian Fenty and incumbent Mayor Muriel Bowser." DC Council rolled-back Wharf commitment for housing for low- and moderate incomes. In lieu of paying property taxes like other property owners in the District, those on the Wharf make an "annual PILOT in an amount equal to the real property taxes". These taxes do not go into the general fund to support schools, city services, and other neighborhood assets.
The Randall School redevelopment received a 20-year tax abatement, which the Office of the Chief Financial Officer considered "excessive" in a letter to DC Council, as a 10-year abatement would have been sufficient.
**Approved, not built
Traditional Market-driven - involves development in the traditional sense of free-market economics where government plays very little role, but "free-market" economic development is illusory. Government policy including tax subsidies disrupt normal market functioning and create conditions for the housing market to build in excess and to not address housing affordability needs. When a property is designated "by right," this means that it is not asking for exemptions to the type of zoning for that land. Launched in 2009, "D.C.'s current inclusionary zoning standards require that any development with at least 10 units set aside between 8% and 11% of the building's residential floor area as affordable to renters making less than 60% of the area median income." The Office of Planning is scheduled to appear in November 2020 before the Zoning Commission to increase IZ. However, this will not impact developed or imminently developing properties and is likely to have little impact. "(An increase) may not amount to a huge increase in affordable units — inclusionary zoning produced about 198 units last year."
The major traditional market projects have produced or are seeking to produce approximately 273 (8.7%) affordable units out of a total of 3,155 in Southwest (Table 2). Buzzard Point developments, as well as 1319 South Capitol St, qualify for tax deferment or exemption because of the Opportunity Zones initiative as part of the Republican tax overhaul in 2017. "In many cases it’s just a hefty tax break for a project that was already going to happen," meaning that projects produce minimal affordable housing due to inadequate IZ requirements and can take advantage of tax breaks.
Church-led - involves a church selling a fraction or entire property to a developer. Since churches are tax-exempt, churches' contribution to Black displacement and an affordability crises raises concerns about ethics and tax policy. Since these developments involved planned unit developments ("PUDs"), it casts serious doubt on the PUD process to produce affordable housing, which has come under scrutiny. Affordable housing production was only recently added as a high-priority public benefit in the Comprehensive Plan (Source).
Two PUD developments - St. Matthews Lutheran Church and Riverside Baptist Church - have contributed roughly 390 rental units. Only 42 (11%) of these are "affordable". At Riverside Baptist/The Banks, actual affordable housing (<60% AMI) is 8 units and workforce housing (>60% AMI) is 12 units. As of October 2020, the average rental prices based on Apartments.com are:
Studio: $2,010 | 1-Bedroom: $2,920 | Two bedroom: $3,988
The third development at St. Augustine's Episcopal Church produced condominiums. Of the 107 units, only 11 (10%) are "affordable".
Redfin Estimated Sale Price: $791,000 - $874,000
Table 1: Approximate Estimates of Affordable Output from Public Projects in SW
Current Planning Area
Proposed Planning Area - below (Notice how the South Capitol side is taken out of the "SW neighborhood" to make way for more luxury, gentrifying projects.)
Table 2: Traditional Market Affordable Housing Production
CHAPTER 2: Black Displacement and Demographic Shift
More than 20,000 African American residents in Washington, DC were displaced from 2000-2013, the most "intense" form of gentrification in the US. The National Community Reinvestment Coalition studied gentrification patterns again for 2013-2017 and found that DC "still has a high intensity of gentrification, with a total of 14 (16%) of eligible neighborhoods gentrifying." “It’s primarily racial … Racism is profoundly implicated in all of this,” said Sabihya Prince.
Within the 20024 zip code between 2010 and 2014-2018, Blacks' population percentage declined from 55% to 43% while Whites' percentage increased from 34% to 48% (US Census/Policy Map). Since the total population increased from 11,510 to 13,354 during this period, Blacks decreased in total population - from 6,331 to 5,742. With exception of the southeast tract that contains public housing properties, all census tracts showed a decline in the overall Black population.
The median income difference for Whites and Blacks in SW is $43,480 ($115,261 v $71,781) and is $83,422 greater for the DC overall ($142,423 v $59,001) (US Census/Policy Map). The historical stark difference in Black and White income persists with support of direct and indirect government support. Based on the dearth of affordable housing in the pipeline, few policy actions appear to address the structural racial inequity in income.
Blacks' median income in SW had historically been lower than the Black citywide average. Despite the preponderance of public and low-income housing in SW, this trend reversed around 2016, suggesting that SW is increasingly attractive to high income Black earners as well. Blacks are contributing to gentrification in SW - though to a lesser extent that traditional forms of gentrification.
Blacks with higher incomes comprise some of the incoming higher income, gentrifying population. As the table on the right shows, higher incomes among Black households have shown the greatest change from 2010-2020 (US Census/Simply Analytics). The number of Black households with an income under $75,000 increased only by 6 households while those making over this amount increased by 1,158.
It is a falsehood to argue that Black displacement is purely free-market economics. As the argument goes, Blacks tend to have less wealth, so they are more vulnerable to displacement. Black displacement is a function of the interplay between exploitative economic and political systems that ignore the social costs of unchecked capitalism. Often, Blacks are subsidizing their own displacement through tax subsidies and land giveaways for development at the District and federal levels. A 2013 NPR report showed that DC Council had approved "$1 billion in tax breaks and other subsidies to developers over the past decade. At the same time, these developers donated millions of dollars in campaign cash." Despite dozens of missed opportunities to obtain more affordable units from developments involving public land, DC Council wants to again subsidize developers through a new local-income housing tax credit program.
Designated in 2017 to encourage investment in area of dire need, "Opportunity zones" policy has catalyzed gentrification while providing tax deferment or abatement. "Almost 69% of the neighborhoods identified as gentrifying in the 2013-2017 data were either within or adjacent to an OZ." Most of Southwest is within Opportunity Zones, which the law does not require that affordable housing is prioritized.
Chapter 3: Increasing Rent Burden and Declining Affordability
There are citywide and nationwide calls to address the affordability housing crisis.
Revised Comprehensive Plan Framework - "The rising cost of housing is one of the most pressing and critical issues facing the District and the region. To achieve our goal of an inclusive city, we must meet the challenge of providing housing for a variety of household types.."
Proposed Changes to Housing Element - "However, as Washington, DC remains attractive to and retains higher income households, rising demand and competition will put upward pressure on rents and a greater number of lower-income households will experience greater pressure from rising housing costs.
Metropolitan Washington Council of Governments - calls for three-quarters of the new units should be affordable to low-to-moderate income levels, which means a monthly housing cost of $2,500 or less
Dozens of opportunities to attenuate this crisis have been missed as with the lax affordability requirements for developments involving public land (e.g. Randall School redevelopment, the Wharf, SW towncenter). Zip code changes in median rent are not an accurate picture of increasing rent burden because Southwest contains one-third public housing. The average percentage change in median gross rent between 2009-2013 and 2014-2018 in SW was 33% (US Census/Policy Map). It varies by census tract: SW tract (27%), NW tract (27%), NE tract (18%), and SE tract (61%). The average percentage change across all census tracts in the District for this period was 24%. The SE tract comprises most of the public housing development in SW, meaning that rising rent in public housing and turnover in adjacent private rent occupants are likely contributing factors.
WUSA9 analyzed Zillow data on median rent in the District and found that Navy Yard and Southwest Waterfront grew by more than 12 percent in a single year - more than 3x faster than the rest of DC. Based on Zillow data by unit type, the SW-Waterfront neighborhood ranked high among roughly 50 neighborhoods for median rent: studio or one bedrooms (#9), two bedrooms (#16), and three bedrooms (#16).
Demographic Shift in SW from 2010-2018
Changes in Black Population in Census Tracts in Southwest between 2010-2018
Median Income by Race for 20024 Zipcode and DC Overall
Income Shift Among Black Households from 2010-2020.
Most of Southwest is within "Opportunity Zones" (grey) which was passed under the Trump administration and widely spurs gentrification throughout the District and nation.