Washington, DC, August 26, 2014 --  

Affordable Housing in America's capital is as scarce now as it was 125 years ago.

When local beer hall owner Edward Abner built five small rowhouses in Washington in 1890, he joined an innovative movement in affordable housing. As vacant lots on the city's streets became scarce, developers began subdividing lots to create new ones facing the inside of alleys. Abner's five-room red brick structures were built on these cheaper lots near the city's Navy Yard. They were given running water but spared the expense of an indoor bath. The $7 per month rent¹ was less than half the price of adjacent street-facing rowhouses with full amenities².

The brewmeister and landlord had little trouble finding renters for these modest homes. The population of the now crowded city had more than tripled in the three decades since the start of America's Civil War³. About 150,000 new residents included over 60,000 African-Americans immigrants from the South, along with thousands more from central and southern Europe, fueling demand for affordable housing. By 1912, more than 3,000 alley dwellings housed 12,000 Washingtonians.⁵

Over 120 years later, similar issues are gripping America's capital city. The metro area has been growing much faster than most American cities. In the year prior to July 2013, the area grew by 87,265 residents⁶ with the historic city taking up more than its share. Today's migration wave is fueled not by immigrants from Europe and the South, but by new college graduates from across the country who flock to Washington for its strong job market and hip urban lifestyle.

Developers have responded to this influx by creating an enormous boom in new luxury rentals. The same Navy Yard neighborhood where the brewer built the alley dwellings in the 1890s now has a dozen new high rise apartment buildings finished or under construction along its southern edge. These huge new apartment buildings feature amenities like gourmet kitchens with stone countertops, concierge services and rooftop pools.

The number of for these "class A" luxury units in the city has grown from 8,500 in 2010 to 14,500 in June, with their average rent in the city's Northwest quadrant now $2,648⁷. Meanwhile the number of cheaper "class B" apartments is stagnating, and vacancy rates in these more affordable units has fallen to an extremely low three percent.⁸ As cheaper housing stock disappears, less affluent residents of Washington are being pushed out of the city as they get priced out of the market.

Back in the 1890s, developers like Edward Abner satisfied similar demand by offering new housing stock on the alleys at a fraction of the cost of homes elsewhere. This boom in alley dwelling construction quickly became unpopular with the city's more affluent residents.

In 1892, William Thompson, a coppersmith, lived in the Navy Yard neighborhood in a 4-year-old rowhouse with that era's luxuries of gas lighting and an indoor bath. His back yard adjoined the property of one of the new alley dwellings rented from Edward Abner by the family of an unskilled laborer named Thomas Adams.⁹ From his bathroom window, Thompson would have had an unsavory birds-eye view of the laborer's family frequenting an outhouse just over the property line.

Not surprisingly, in July of that year, the U.S. Congress outlawed new construction of alley dwellings.¹⁰ In 1912, an activist Monday Evening Club lobbied for the buildings' demolition for "breeding crime and disease to kill the alley inmates and infect the street residents."¹¹. Housing shortages during two World Wars delayed much action, but by the late 1960s, most of the alley dwellings, including all of those built by Edward Abner, had been demolished, replaced by vacant lots and car parks.

A shortage of affordable housing continues to this day. But now the term has become synonymous with government subsidy. Many large public housing projects from the mid-20th century -- built by do-gooders to replace those evicted from private alley dwellings -- have been demolished and replaced with a smaller number of subsidized units in new luxury buildings, forced upon developers as a condition of receiving a building permit.

This approach does nothing to help residents whose incomes are too high for government subsidies, but too low for the luxury apartments that increasingly dominate the city. The proliferation of high rents in Washington DC is caused by developers chasing a booming demand on the high-end of the market.

So long as developers can continue to get big returns from luxury renters, they will continue to chase this lucrative market. But this can't last forever. When the boom finally ends, there will still be respectable returns to be made by going after the less well-to-do. Today's budget renters will certainly demand indoor bathrooms, but they can probably live without stone countertops and rooftop swimming pools. Will wealthier Washingtonians resent this squalor? Will they again agitate to have affordable housing banned? In the 124 years after Edward Abner made his mark, a new era of private investment in inexpensive housing has yet to come.

Notes:

1. Washington Star, Real Estate Ad for 731 Abner's Ct, SE, September 5, 1895.

2. Washington Star, Real Estate Ad for 730 9th St SE, December 12, 1893.

3. Census Bureau, District of Columbia -- Race and Hispanic Origin: 1800 to 1990, September 13, 2002

4. Ibid.

5. Directory of the Inhabited Alleys of Washington, DC, 1912

6. Washington Post, D.C. Region Continues Population Growth, March 27, 2014

7. Washington Post, Why It's So Hard to Find a Cheap Apartment in Washington, D.C., August 9, 2014

8. Ibid.

9. Boyd's Washington City Directory, 1892

10. Directory of the Inhabited Alleys of Washington, DC, 1912

11. Ibid.