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What HQ2 could mean for the Washington region’s housing market, in seven charts – Greater Greater Washington




Image by Erin used with permission.

This feature originally appeared on and is part of Urban-Greater DC, an initiative to inform policy debate and decision-making to address persistent inequalities and improve economic mobility and access to opportunity in the District of Columbia and the Washington region.

The Washington, DC, metropolitan area economy has expanded steadily over the past two decades, although since the Great Recession, it has lagged behind many other large US metropolitan areas. The region’s prosperity has attracted more residents, expanding the population from 4.8 million in 2000 to an estimated 6.2 million in 2017.

But in recent years, housing production has not kept pace with population growth, and home prices and rents are climbing in most communities.

Many households spend an excessive fraction of their income on housing, putting pressure on family budgets and forcing many to trade short commutes for more affordable housing options. Although the brunt of the housing affordability challenge falls on low-income households, households with moderate and middle incomes are increasingly feeling the squeeze.

These challenges could intensify if the Washington region’s recent slow-growth trajectory accelerated with the arrival of a major employer and tens of thousands of new jobs. The Metropolitan Washington Council of Governments estimates that the region needs 235,000 more housing units by 2025 just to keep pace with expected job growth. An additional 50,000 new jobs could push that production target above 275,000, requiring a pace of housing production substantially above current levels, which is expected to produce only about 170,000 new units by 2026.

To respond effectively, the region needs to understand today’s challenges. The current housing shortfall reflects the slowing of housing production in recent years. If jurisdictions return to higher rates of new housing construction while crafting policies that preserve existing affordable homes and protect residents, the region can support a well-functioning housing market and meet the needs of households across the income spectrum.

Here, we provide a starting point for conversation about how to realize this goal: seven charts that tell the story of the Washington area’s recent growth and housing market trends.

These charts provide current and historical data for the whole metropolitan statistical area (as defined by the Office of Management and Budget) and for the “inner region,” which includes the District of Columbia, five counties (Arlington, Fairfax, Loudoun, Montgomery, and Prince George’s), and three cities (Alexandria, Falls Church, and Fairfax).

1. Expanding job opportunities have fueled the region’s growth

The past two decades have brought robust job growth to the region. However, the number of jobs increased little during the Great Recession, and the pace of growth still has not returned to prerecession levels. In fact, employment growth since 2012 has fallen short of the national growth rate.

Nonetheless, 169,000 new jobs have been added to the metropolitan economy in the past five years. More than three quarters of this growth has occurred in the inner region, which gained 131,000 jobs between 2012 and 2017.

The region’s unemployment rate is only 3.2%, and labor force participation rates are high. But wage growth has been flat since 2010, leaving many people struggling to get ahead.

2. Housing units have not kept pace with population growth

Fueled by healthy job growth, the Washington region has also experienced rapid population growth. Between 2010 and 2016, the metropolitan area grew 9.1%, compared with 5.8% population growth among the nation’s 10 biggest metropolitan areas*. And more than half the metropolitan area’s recent population growth occurred in the inner region.

Until recently, housing production kept pace with population growth. But since 2010, housing production has fallen short. While the inner region’s population increased 7%, the number of housing units increased only 3%.

With the shortfall in production, housing vacancy rates have dropped for both rental and for-sale housing. As of 2012–16, the rental vacancy rate for the inner region stands at 5.0%, and the vacancy rate for for-sale housing is 1.1%.

* Including Washington, DC, the 10 biggest metropolitan areas by population are New York City, Los Angeles, Chicago, Dallas, Houston, Miami, Philadelphia, Atlanta, and Boston

3. The region’s population is growing fastest at the top of the income ladde

Average household incomes (adjusted for inflation) have climbed steadily since 2000, with the inner region slightly outpacing gains for the metropolitan area.

This overall increase masks a significant shift in the mix of households at different income levels. The number of households in the middle of the income spectrum remained essentially unchanged, while the number of low-income households increased less than 20%. Flat wages might be contributing to the lack of growth in the number of middle-income households.

In contrast, the number of households with incomes above $150,000 grew 34%, with the number of renters in this income bracket jumping 59%. This rapid growth in the number of households with high incomes can happen when existing residents move up the income ladder and when new, high-income residents move to the region.

Along with the shortfall in housing production, the surge in high-income households puts upward pressure on house prices and rents, making it more challenging for both low- and middle-income households to find housing they can afford.

4. Rising demand has pushed up house price

House prices have been climbing steadily (even after inflation) in most of the region since 2010, particularly in Arlington County and the District of Columbia, where median sales prices now surpass $500,000. Together, rising incomes and the shortfall in housing production put upward pressure on house prices across the inner region.

These prices are increasingly out of reach for many of the region’s middle-income workers, based on wages they can earn working full-time in such occupations as nursing, public safety, and administrative support.

But housing market trends vary across communities. The District of Columbia has seen its median sales price climb from close to the lowest in the region in 2000 to the second highest in 2017. In contrast, Prince George’s County suffered the biggest decline in the Great Recession and experienced the slowest recovery.

Strategies for managing the region’s housing market pressures will need to be tailored to the differing circumstances of individual jurisdictions.

5. Rents have been steadily increasing across the region

Renters, who can be especially vulnerable to rapid changes in the housing market, have seen steep rent increases in many parts of the region.

Rapid growth in the number of high-income renter households drives these increases, which have been especially dramatic in Loudoun County and the District of Columbia. Between 2011 and 2017, rents in Loudoun shot up 11% and climbed 8% in the District of Columbia.

Rents, like house prices, are considerably lower in Prince George’s County than in other inner-region jurisdictions. And the average (inflation-adjusted) increase in rents for the region as a whole, 3.8%, falls short of most other large metropolitan areas, including San Francisco and Seattle, Houston, and Atlanta.

6. Many pay a large share of their income for housing

Because of high costs, many renters and homeowners have to devote unaffordable shares of their income to housing.

Almost half of renters and a quarter of homeowners in the inner region pay 30% or more of their income on housing, a share that the US Department of Housing and Urban Development considers unaffordable. And 23% of renters and 10% of homeowners are severely cost burdened, meaning housing eats up at least half their income.

The share of cost-burdened renters in the inner region has stayed about the same over the past 12 years, while the share of cost-burdened homeowners has fallen from 35% in 2008.

Most large US metropolitan areas have even more severe housing affordability challenges. And low- and moderate-income households bear the brunt of the affordability challenges.

Among households with incomes below 80% of the area median ($70,150 for a family of four), 80% of renters and 73% of owners have unaffordable cost burdens. And George Mason University has projected that the Washington metropolitan area will add 149,000 households with incomes below 80% of the area median by 2023.

7. Workers trade short commutes for affordable housing

Rising housing costs, particularly near job and transit centers, have forced many to seek cheaper housing options in other areas. But this sometimes lengthens their commuting times.

Places with low housing costs, such as Prince George’s County and Loudoun County, have long commuting times for workers, with 20% of Prince George’s County workers traveling more than an hour to get to work, compared with only 6% in pricier Arlington County.

This presents a challenge to the region in improving the quantity and quality of transportation options, as well as balancing the locations of job centers with housing that serves the full income spectrum.

So does this tell us about the impact could Amazon have?

The arrival of a major new employer, such as Amazon HQ2, would increase pressure on the DC region’s housing market. Without substantially more housing production at a wide range of rent levels and price points, the challenges of rising affordability pressures and lengthening commutes will intensify, and more households will experience hardship.

But since the Great Recession, the Washington area has shown tremendous resilience, and many leaders in the public, private, and nonprofit sectors are focused on housing affordability. Ongoing conversations are addressing what it would take to boost the pace of new housing production in communities throughout the region, and local jurisdictions are exploring various planning and policy options.

Although the region’s housing affordability challenges warrant serious concern, they can be addressed by a coordinated and committed effort by our entire region before they reach the extremes confronting the nation’s highest-cost markets.

Working together, the jurisdictions that make up our region have the capacity and resources to respond to accelerated job and population growth, strengthening the housing market so it better meets the needs of households across the income spectrum.

Whether they do so will go a long way toward determining whether we are building a prosperous and inclusive region for all our residents.

Project credits:

RESEARCH: Leah Hendey, Peter A. Tatian, Margery Austin Turner, Bhargavi Ganesh, Sarah Strochak, and Yipeng Su.

DESIGN: Christina Baird


EDITING: David Hinson

View this project on Github.

Leah Hendey is a senior research associate in the Urban Institute’s Metropolitan Housing and Communities Policy Center, co-director of the National Neighborhood Indicators Partnership, and a key member of the Urban-Greater DC team. Leah is experienced in transforming national and local administrative data sets to create neighborhood indicators and studying neighborhood conditions.

Peter A. Tatian is a senior fellow at the Urban Institute and research director for Urban–Greater DC. He advises nonprofits on performance management and evaluation and heads Urban’s work providing technical assistance on data collection and use to grantees of the US Department of Education’s Promise Neighborhoods initiative.

Margery Austin Turner is senior vice president for program planning and management at the Urban Institute, where she leads efforts to frame and conduct a forward-looking agenda of policy research. Turner is also a nationally recognized expert on urban policy and neighborhood issues.


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4 things kids need to know about money




(NC) Responsible spending includes knowing the difference between wants and needs. Back-to-school season, with added expenses and expectations around spending, is the perfect time to not only build your own budget for the year ahead, but also to introduce your own children to the concept of budgeting.

The experts at Capital One break down four basic things that every child should know about money, along with tips for bringing real-life examples into the conversation.

What money is. There’s no need for a full economic lesson,but knowing that money can be exchanged for goods and services, and that the government backs its value, is a great start.
How to earn money. Once your child understands what money is, use this foundational knowledge to connect the concepts of money and work. Start with the simple concept that people go to work in exchange for an income, and explain how it may take time (and work) to save for that new pair of sneakers or backpack. This can help kids develop patience and alleviate the pressure to purchase new items right away that might not be in your budget.
The many ways to pay. While there is a myriad of methods to pay for something in today’s digital age, you can start by explaining the difference between cash, debit and credit. When teaching your kids about credit, real examples help. For instance, if your child insists on a grocery store treat, offer to buy it for them as long as they pay you back from their allowance in a timely manner. If you need a refresher, tools like Capital One’s Credit Keeper can help you better understand your own credit score and the importance of that score to overall financial health.
How to build and follow a budget. This is where earning, spending, saving and sharing all come together. Build a budget that is realistic based on your income and spending needs and take advantage of banking apps to keep tabs on your spending in real-time. Have your kids think about how they might split their allowance into saving, spending and giving back to help them better understand money management.

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20 Percent Of Americans In Relationships Are Committing Financial Infidelity




Nearly 30 million Americans are hiding a checking, savings, or credit card account from their spouse or live in partner, according to a new survey from That’s roughly 1 in 5 that currently have a live in partner or a spouse.

Around 5 million people — or 3 percent — used to commit “financial infidelity,” but no longer do.

Of all the respondents, millennials were more likely than other age groups to hide financial information from their partner. While 15 percent of older generations hid accounts from their partner, 28 percent of millennials were financially dishonest.

Regionally, Americans living in the South and the West were more likely to financially “cheat” than those living in the Northeast and Midwest.

Insecurity about earning and spending could drive some of this infidelity, according to industry analyst Ted Rossman.

When it comes to millennials, witnessing divorce could have caused those aged 18-37 to try and squirrel away from Rossman calls a “freedom fund”.

“They’ve got this safety net,” Rossman said. They’re asking: “What if this relationship doesn’t work out?”

As bad as physical infidelity

More than half (55 percent) of those surveyed believed that financial infidelity was just as bad as physically cheating. That’s including some 20 percent who believed that financially cheating was worse.

But despite this, most didn’t find this to be a deal breaker.

Over 80 percent surveyed said they would be upset, but wouldn’t end the relationship. Only 2 percent of those asked would end the relationship if they discovered their spouse or partner was hiding $5,000 or more in credit card debt. That number however is highest among those lower middle class households ($30,000-$49,999 income bracket): Nearly 10 percent would break things off as a result.

Roughly 15 percent said they wouldn’t care at all. Studies do show however that money troubles is the leading cause of stress in a relationship.

That’s why, Rossman says, it’s important to share that information with your partner.

“Talking about money with your spouse isn’t always easy, but it has to be done,” he said. “You can still maintain some privacy over your finances, and even keep separate accounts if you and your spouse agree, but you need to get on the same page regarding your general direction, otherwise your financial union is doomed to fail.”

With credit card rates hovering at an average of 19.24 percent APR, hiding financial information from a partner could be financially devastating.

But, Rossman adds, it’s not just about the economic impact but also the erosion of trust.

“More than the dollars and cents is that trust factor,” he said. “I think losing that trust is so hard to regain. That could be a long lasting wedge.”

Kristin Myers is a reporter at Yahoo Finance. Follow her on Twitter.

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7 Examples Of Terrible Financial Advice We’ve Heard




Between television, radio, the internet and well-meaning but presumptuous friends and family, we’re inundated with unsolicited advice on a daily basis. And when it comes to money, there’s a ton of terrible advice out there. Even so-called experts can lead us astray sometimes.

Have you been duped? Here are a few examples of the worst money advice advisers, bloggers and other personal finance pros have heard.

1. Carry a balance to increase your credit score.

Ben Luthi, a money and travel writer, said that a friend once told him that his mortgage loan officer advised him to carry a balance on his credit card in order to improve his credit score. In fact, the loan officer recommended keeping the balance at around 50 percent of his credit limit.

“This is the absolute worst financial advice I’ve ever heard for several reasons,” Luthi said. For one, carrying a credit card balance doesn’t have any effect on your credit at all. “What it does do is ensure that you pay a high interest rate on your balance every month, neutralizing any other benefits you might get from the card,” Luthi explained. “Also, keeping a 50 percent credit utilization is a surefire way to hurt your credit score, not help it.”

Some credit experts recommend keeping your balance below 30 percent of the card limit, but even that’s not a hard-and-fast rule. Keeping your balance as low as possible and paying the bill on time each month is how you improve your score.

2. Avoid credit cards ― period.

Credit cards can be a slippery slope for some people; overspending can lead to a cycle of debt that’s tough to escape.

But avoiding credit cards on principle, something personal finance gurus like Dave Ramsey push hard, robs you of all their potential benefits.

“Credit cards are a good tool for building credit and earning rewards,” explained personal finance writer Kim Porter. “Plus, there are lots of ways to avoid debt, like using the card only for monthly bills, paying off the card every month and tracking your spending.”

If you struggle with debt, a credit card is probably not for you. At least not right now. But if you are on top of your finances and want to leverage debt in a strategic way, a credit card can help you do just that.

3. The mortgage you’re approved for is what you can afford.

“The worst financial advice I hear is to buy as much house as you can afford,” said R.J. Weiss, a certified financial planner who founded the blog The Ways to Wealth. He explained that most lenders use the 28/36 rule to determine how much you can afford to borrow: Up to 28 percent of your monthly gross income can go toward your home, as long as the payments don’t exceed 36 percent of your total monthly debt payments. For example, if you had a credit card, student loan and car loan payment that together totaled $640 a month, your mortgage payment should be no more than $360 (36 percent of $1,000 in total debt payments).

“What homeowners don’t realize is this rule was invented by banks to maximize their bottom line ― not the homeowner’s financial well-being,” Weiss said. “Banks have figured out that this is the largest amount of debt one can take on with a reasonable chance of paying it back, even if that means you have to forego saving for retirement, college or short-term goals.”

4. An expensive house is worth it because of the tax write-off.

Scott Vance, owner of, said a real estate agent told him when he was younger that it made sense to buy a more expensive house because he had the advantage of writing off the mortgage interest on his taxes.

But let’s stop and think about that for a moment. A deduction simply decreases your taxable income ― it’s not a dollar-for-dollar reduction of your tax bill. So committing to a larger mortgage payment to take a bigger tax deduction still means paying more in the long run. And if that high mortgage payment compromises your ability to keep up on other bills or save money, it’s definitely not worth it.

“Now, as a financial planner focusing on taxes, I see the folly in such advice,” he said, noting that he always advises his client to consider the source of advice before following it. ”Taking tax advice from a Realtor is … like taking medical procedure advice from your hairdresser.”

5. You need a six-month emergency fund.

One thing is true: You need an emergency fund. But when it comes to how much you should save in that fund, it’s different for each person. There’s no cookie-cutter answer that applies to everyone. And yet many experts claim that six months’ worth of expenses is exactly how much you should have socked away in a savings account.

“I work with a lot of Hollywood actors, and six months won’t cut it for these folks,” said Eric D. Matthews, CEO and wealth adviser at EDM Capital. “I also work with executives in the same industry where six months is overkill. You need to strike a balance for your work, industry and craft.”

If you have too little saved, a major financial blow can leave you in debt regardless. And if you set aside too much, you lose returns by leaving the money in a liquid, low-interest savings account. “The generic six months is a nice catch-all, but nowhere near the specific need of the individual’s unique situation… and aren’t we all unique?”

6. You should accept your entire student loan package.

Aside from a house, a college education is often one of the biggest purchases people make in their lifetimes. Often loans are needed to bridge the gap between college savings and that final tuition bill. But just because you’re offered a certain amount doesn’t mean you need to take it all.

“The worst financial advice I received was that I had to accept my entire student loan package and that I had no other options,” said Gina Zakaria, founder of The Frugal Convert. “It cost me a lot in student loan debt. Now I tell everyone that you never have to accept any part of a college financial package that you don’t want to accept.” There are always other options, she said.

7. Only invest in what you know.

Even the great Warren Buffett, considered by many to be the best investor of all time, gets it wrong sometimes. One of his most famous pieces of advice is to only invest in what you know, but that might not be the right guidance for the average investor.

In theory, it makes sense. After all, you don’t want to tie up your money in overly complicated investments you don’t understand. The problem is, most of us are not business experts, and it’s nearly impossible to have deep knowledge of hundreds of securities. “Diversification is key to a good portfolio, and investing in what you know leads to a very un-diversified portfolio,” said Britton Gregory, a certified financial planner and principal of Seaborn Financial. “Instead, invest in a well-diversified portfolio that includes many companies, even ones you’ve never heard of.”

That might mean enlisting the help of a professional, so make sure it’s one who has your best interests at heart.

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