patrick.net

All tribute from the far corners of the republic flow to imperial Washington.

Housing is expensive in the DC metro area because high paying jobs are plentiful. Sure lobbyists are growing in influence, but as a profession in DC they are a small piece of the pie. Tech unemployment is probably approaching 1-2% in the 703, 202 and 301 area codes. Go to dice, career builder or monster and search things like java, c#, oracle, sas or siebel. The list will be hundreds of entries long and all high paying. 75k for 5ys of exp, 125 for 10 and there will be plenty of jobs paying up to 150k.

Then there are the military jobs which pay ok but come with high COLA subsidies. I have heard of monthly COLA numbers over $2000 month. That's a nice subsidy when your figuring out your mortgage.

Then there are the GS jobs which all pay well and come with killer benefits for people who generally don't have to work hard or be all that qualified. Trust me, contractors do mist of the hard work based on more than a decade working in the area and often on government sites.

Stop looking for scape goats, lose rose colored partisan glasses and use unbiased logic.

Why is DC so expensive? The power to tax. And yes, the fact that our politicians are bought on the open market to the highest bidder.

Government prostitution and corporatism, they call it lobbying I think.

I drove through DC once. That was enough to convince me that you probably could not pay me to live there. Sure- traffic is pretty bad out here in the Bay Area... but the traffic there was... AWFUL! I mean it made my daily commute look like a walk in the park. Couple that with the fact that the weather is pretty cruddy there and its not exactly the 1st place on my list to live.

DC is so expensive because the federal government is HUGE and ever-expanding! Cut all federal gov't agencies and all federal spending to contractors by 20% and then you'd see much lower housing prices in DC.

I can confirm what TheLastGoodIdeablogspotcom is saying--I am a tech worker for the defense industry in the Boston metro area. I just went through a job search 4 months ago, during which I actively considered (but did not ultimately accept) the possibility of relocating. I did exactly the types of searches on dice and careerbuilder that TheLastGoodIdeablogspotcom mentioned, and what I found is that Northern Virginia and Maryland are basically black holes (i.e., gigantic inexorable vortices that just get bigger and bigger by sucking resources in and never releasing them again) for people with my education level and career profile. I know how much I earn personally, and I also have a good idea of what salaries for tech workers in the military-industrial complex look like generally, and looking at all the jobs I saw available online, I'm forced to conclude that he's correct: there are just a ton of high 5-figures/low 6-figures jobs available in the DC area right now. Federal employment in the DC area for certain specific types of high-earning upper middle class employees has been undergoing explosive growth, and the influx of people moving to DC in order to take those jobs as employment in other parts of the country dries up has no doubt been feeding the excessively high price of housing in the area.

Hey - not all the houses are too expensive, nor is the traffic awful. Believe me - you just have to be willing to not live in Dupont Circle and be okay with driving to a grocery store (as opposed to living above one in a fancy condo). PG County is up and coming, and Cheverly is like a Midwest town smack dab in the middle of DC. Buy my house! http://6002reedstreet.epropertysites.com/

TheLastGoodIdeablogspotcom says

The list will be hundreds of entries long and all high paying. 75k for 5ys of exp, 125 for 10 and there will be plenty of jobs paying up to 150k.

I don't make nearly as much as those numbers suggest. I doubt my co-workers do either (unless they are managers).

Why is DC so expensive?

It wasn't that long ago that central MD was a relatively inexpensive place to live. I mean when compared to most of the rest of the northeast corridor anyway. Pre housing bubble prices in places like PG County, most of Anne Arundel County, Carroll County, and Baltimore County were very reasonable. Housing in Montgomery County, Howard County, and near Annapolis were expensive before the housing bubble, and will be so afterwards as well. My guess is that prices just hasn't returned to normal yet.

In so far as housing in DC being expensive, it's been that way for some time in that it's (as long as I've been here) a very segregated city with the black quadrants being very inexpensive (and run down) and the non-black parts being much nicer and very expensive. With roughly the Potomac , the city line, and Rock Creek Park being the major diving lines. If you were a white person who didn't have a lot of money, you moved out of the district or into a group house and probably did not own a car.

I would also say that there is way more stuff to do here than probably anyplace else. When I take my vacations other people come from out of town and we do stuff all over the area and I don't forsee running out of new stuff to go and do anytime soon.

DC isnt that expensive , its just that other places are cheap .
I am in Anne Arundel County and the drive to DC isnt that bad , you can buy houses in this county from $100K on up , all depends what you want . 5 and 6 figure incomes are the norm around here , I get down in the dirt , work boots, blue jeans and I am swamped with work and I havent made less than 6 figures since 1982

Government jobs pay very well. A military Officer will make O-3 within 4 years of graduating from college. The after tax take-home pay amounts to about 79k after taxes (with one dependent) and about 73k without dependents. A civilian would need to make over 100k for that paycheck...and we haven't even talked about hugely subsidezed healthcare, childcare, food, and gas.

An 18 year old E-1 with a wife will bring in 42k (before taxes).

These are examples of high pay within the government that should give you an idea of why housing has been more stable and higher priced than the rest of the country.

Also, the average 20 year retired military Officer (O-5) will be able to leave work between 42-44 with what is equivalent to an inflation adjusted annuity worth about 1.8mil (interest rates are obviously very low, so the figure is historically high).

The home prices in DC stay up because all the Government employees. The average pay is 130K and the average raise is 8% a year. You do the math. I have friends that work for the Government. They bank on these raises every year. It comes like clock work. I know two people that retired from the government and they all make more than me a year. Yes, Rome is burning.

1) it is the capital of the country. So the majority of the hq's of various federal agencies are in the area...Pentagon is the largest office building in the country (2nd in the world)

2) Embassies can add up. Embassies technically are land owned by those governments. Maybe it is possible that they don't move as easily as people move with houses. So once country xyz has a embassy on 123 main st then maybe it is there forever.

3) You have a fair amount of schools in the area (Georgetown, GWU for starters) students rent apartments and can drive up rates

4) Like mentioned earlier lobbyists might also contribute.

5) Tourists. There's a fair amount of them

Knowing all of these though is that combined these generally don't close. Yes there was the shutdown in the 90's but more consistent employment means more confidence meaning that some would be more able to buy a home. If buyers and sellers know their jobs are stable they are more apt to pay more.

price to rent ratio says

An 18 year old E-1 with a wife will bring in 42k (before taxes).

Your quote on the E-1 is a bit misleading. The E-1 makes 1476 a month in pay before taxes and pulls in 1776 in monthly housing allowance. I will clarify on this forum that an E-1 pay is only that high in the DC area. Plus, living on 42K in DC would probably suck. That person better hope they have base housing available.

I can tell you that in the 1990's the military were prevelant in most positions. Over the past 20 years I have seen the Government service and contractor positions go ape shit. We built in these government jobs and contracts because it is cheaper in the long run. With these wars coming to an end I don't see why there wouldn't be a massive cut in all the governemnt service positions and contractor jobs. These cuts will happen. Why do you think these wars are being slowly pulled back. The lose in jobs would be tremendous if we cut everyone we should cut and pulled out of these foreign wars immediately.

I'd also point out that a fair amount of people don't live n DC but they do work there.

In addition there ARE restrictions for how tall buildings can be. This is probably one of the key reasons why housing is expensive. Cities build up when they cannot build outward.
http://en.wikipedia.org/wiki/Heights_of_Buildings_Act_of_1910
These laws are more than a century old. There really are no skyscrapers in the immediate area. 90 feet maximum is pretty small when you think of places like Boston, NYC, Philly, Chicago, LA etc. I've seen ladders that are 40 feet so to say that someone can buy a ladder that covers half the height of any residential building is saying something about that limit.
There are arguments for why it should be lifted
http://marketurbanism.com/2010/12/16/this-is-how-gentrification-happens-northwest-dc-and-the-height-restriction/

Taxes for sales aren't that high but hotel is 14.5% and meals is about 10%..

Owners certainly have an advantage knowing that other owners cannot expand their properties that much. After you reach that max for height well that is it.

So how do congressmen who come from "humble circumstances" afford to stay there?

All that I know is John Ensign (the piece of shit from Las Vegas who was outrageously wealthy, a vet school grad who never had to practice because daddy owns a casino) stayed in a house with other "christian" congressmen.

Is this common - do lawmakers share places or are they all wealthy enough to afford a house in DC and their home turf? Also, do they get cheap rent somehow? Or is that akickback?

Some might stay but it depends where they live. For anyone living in the northeast it isn't that far..the Acela can take people to Boston, Philly and NYC.

From what I understand reps from Hawaii and Alaska are much more apt to stay because it is too taxing to fly back each week or so.

When congress is in recess they go back home to hear from their constituents.

it seems like all of the jobs are being concentrated in a handful of areas. So people who cant find work in other parts are migrating to job centers. Which is Driving up rents and housing prices.

@Patrick.

The amount of BS thrown here by few new IDs that suddenly appeared after this thread is up is just ridiculous. Can you check what's going on?

@toothfairy.

PesainCAT had nice explanation about some numbers, though I think it's based on 2009 data. what zzyxx said above is something to think about, segregation, which quite is true for every life in DC area. DC metro is a hugh area spanning 52 counties and 4 states. Among them, fairfax county is the biggest in terms of job oppotunity and job pay (lots of hi-tech companies, accounting firms, legal firms, retail stores, military firms such as boeing and Lockheed Martin, Northrop Grumman and SAIC. Can you smell "lobbyist" there? Fredie and Fannie? Sure, they're in fairfax). DC is second largest. it is the center of our elected crooks. They don't do a shit though, they are pretty good at petting their buddies, the lobbysts, back. And about 20 thousand federal workers and 5 thousand DC workers that are working hard under the pressure from those crooks. Not getting as much as people like to think they do though. Then the montegomary county MD, bio research in NIH and some other stuff like genome project etc is going on in there. It's about 100 miles long wide spreaded area full of job opportunities.

That's what DC metro is. and what makes it unique is ... there's no job center like that in 100 miles. Take a look at the map. To the south and the west, you won't find anything. To the east and the north. You see baltimore and philadelpia, but you know they suck.

It's 2.45am in washington. I gotta go, may write something if I feel like to after i wake up.

"With these wars coming to an end I don't see why there wouldn't be a massive cut in all the governemnt service positions and contractor jobs. These cuts will happen. Why do you think these wars are being slowly pulled back. The lose in jobs would be tremendous if we cut everyone we should cut and pulled out of these foreign wars immediately."

Would that this were true, but it's not. We're now hitting Pakistan with ten drone strikes a month, and Afghanistan is sucking as much money and material as ever. There are secret wars in Libya and Yemen, and Iraq ain't going away with the largest U.S. embassy on earth in Baghdad.

The military-industrial complex, which is calling the shots to whoever is the president, grows ever larger and more powerful.

Don't worry about job losses in this sector too much, at least until the country collapses. Ancient Rome is a good model for what's happening here at comparative hyperspeed.

monkframe says

The military-industrial complex, which is calling the shots to whoever is the president, grows ever larger and more powerful.

I would have to disagree. The defense department is taking 450 billion in cuts over the next decade. Iraq is being drawn down as we speak and they are only negotiating how many advisor roles there will be. Afghanistan has a planned draw down in 2014 and planning is already occuring.

http://www.npr.org/2011/09/24/140748420/defense-leaders-make-their-case-against-budget-cuts

With the drawdown in Iraq and Afghanistan comes huge contractor cuts. You have to understand we don't fight wars the way we used to. All services on the major military bases in these two countries are contractor heavy. If we have 100K in military forces in Afghanistan, we easily have 100K of civilian contractors. It helps the government in a few ways. They don't have to cover civilians through the VA and build up a massive force. It also helps in deception when you actually have 200K people (military/civilians) fighting this war but the only number that is reported is military on the ground.

http://tpmmuckraker.talkingpointsmemo.com/2009/12/so_how_many_private_contractors_are_there_in_afgha.php

As we start drawing down and reducing defense spending, so go the jobs. I have seen the beginning of this drawdown and it is happening very slowly and methodically.

I'll believe the so-called cuts to defense when I see them.
I also don't buy the "drawdown" theory. It's window dressing for the gullible American public put up by the politician-generals such as Petraeus.
The US has no intention of withdrawing from its colonies. Control of regions and resources is what it's all about.
800+ US bases around the world say so.

WASHINGTON (AP) — A Republican on the Senate Armed Services Committee said Sunday that the U.S. should consider military action against Pakistan if it continues to support terrorist attacks against American troops in Afghanistan.

"The sovereign nation of Pakistan is engaging in hostile acts against the United States and our ally Afghanistan that must cease, Sen. Lindsey Graham of South Carolina told "Fox News Sunday."

"He said if experts decided that the U.S. needs to "elevate its response," he was confident there would be strong bipartisan support in Congress for such action."

So much for your "drawdown" theory, especially if a great thinker like Perry is elected next year. Obama seems willing to bomb the crap out of innocent people as well.

monkframe says

Obama seems willing to bomb the crap out of innocent people as well.

LOL. Qaddafi's mercenaries were not "innocent people", clown.

monkframe says

So much for your "drawdown" theory, especially if a great thinker like Perry is elected next year.

Well, it is up to the voters to tell the politicians to stop beating the war drums.

Listen, I understand your frustration at this time. People are out of jobs and we are still embedded in the never-ending wars or conflicts. The small conflicts will never change because we must look after our international interests. I truly believe the American public has no appetite for another long term and expensive conflict fiscally or righteously.

I am in the military and everyone in the military sees the writing on the wall. It is common sense. Defense spending is about to get a serious downsize and I think it is a fiscally smart decision at this time. Our country can't afford the price tag of our defense complex at this time.

There is no propaganda here. The government moves slowly and the military are not much faster. It takes time to wind all these programs down, but I can tell you we are beginning to wind some of our programs down.

The bad news is, we already created trillions of dollars in debt due to these wars. We should have been protesting the invasion of Iraq in 2003 but oh wait…. Everyone was flipping houses, getting HELOC money to buy BMW’s and take great vacations while I was eating sand for the past 10 years. BUT NOW you want to start bitching about the MIC?? Hypocrite!

The defense budget is available for anyone to look at:
http://comptroller.defense.gov/budget.html

This first chart shows the increase since 9/11. This is the cost of going to war.

The second chart is the downward trend in forecasted budget expenditures. I think this forecast with minor decreases is pretty laughable if we are out of Afghanistan and Iraq. Again, John Q Public needs to educate themselves before the cost of the military exceeds our ability to function as a nation.

This doesn't include the VA budget either. Due to our expenditures in OCO for fast procurement of equipment that saves lives we have a higher casualty rate and lower KIA rate. This means there are 100's of thousands of newly injured veterans that the VA has to now support since they were not killed in action.

The VA has tripled in budget expenditures since 2001.

Budgets that have tripled: DoD, Department of Agriculture, Department of Homeland Security, etc...
Budgets that have quadrupiled: Department of Labor, Department of State, Executive Office of the President, Small Business Admin, etc...

The government expanded rapidly in a lot of areas and will have to be parsed back. However, will it be parsed back in the appropriate areas, or will this be an excuse to go after social programs?

Or, maybe we have a revenue problem. Percent of budget outlay versus Defense spending.

But that doesn't make sense? The Tea Party and extreme republicans said we must cut taxes!

See how quickly I can work on both sides of the arguement. Hell, I could even bounce it off GDP and the trend wouldn't look bad at all.

I've lived in or just outside DC since 1963. The area has gone from being a small, just-desegregated southern town to a metropolitan area. I actually remember when cows roamed at Tysons Corner, now one of the largest shopping and office centers in the country.

Housing prices can only exist when there's income available to support the monthly payments. DC has a huge population of people who make excellent salaries and have extensive benefits. No less important, the job base here is rock solid-- no one is shipping government jobs overseas.

I live not far from the Bethesda Medical Center, FDA, and NSA. My neighborhood is filled with medical researchers, engineers, medical doctors, mathematicians and computer scientists. With such educations home prices are not much of an issue. Moreover, it's entirely common to see households with two professionals, both with six-figure incomes and benefits.

PersainCAT --

I understand your point. Now, would you then say that two-income households should be banned?

>>>I wouldn't mind seeing a stronger policy on lending though so all those regions that spend 50+% of their income on housing cant get a mortgage.

The traditional ratios for a conventional mortgages were 28/36 for fixed rate financing, 33/38 for adjustables, 31/43 for FHA and 41/41 for VA loans.

These ratios are much tighter than what you suggest. Yet if you combine small ratios, low rates and high incomes you can still get mammoth mortgages.

Mr. and Mrs. Smith make $300,000 a year, $25,000 a month. With a 28 percent front ratio they can spend $7.000 for mortgage interest and principal, property taxes and property insurance -- say $5,500 a month for principal and interest. At 4.25 percent they can borrow $1,085,486.37.

Home costs in the Washington area are substantially lower than prices in many California areas -- thus there have been fewer foreclosures here and home prices have not fallen as far.

OurBroker says

Moreover, it's entirely common to see households with two professionals, both with six-figure incomes and benefits.

Yeah, the area you're talking about is like that. If your HH earns less than 300K or can't afford 2M SFH in north bethesda or in potomac MD, you guys are just not cutting the average.

In the mean time, a HH who earns 80K/yr, living in 250K SFH in Oxenhill MD is doing great, way above the average there.

Up to the NW DC, you're doing great when you don't need food stemp.

This is a kind of segragation we can see in DC area.

PersainCAT says

Which is part of why someone like me in their 20's earning a decent wage all i can afford if i dont want a 2 hour commute is a small crappy one bedroom condo for nearly 300k.

So, the average guy in DC metro area is doing like this. Oh, Don't forget to pay $450/mo HOA if you want that crappy condo. lol.

As we all know commuting to DC is hell to drive in and out. That's why they're paying 600Ks for having metro railrord at the backyard.

Seaside --

Alas, I work at home. Two Metro stops are within a few minutes.

Not everyone fits the profile or generality.

"The bad news is, we already created trillions of dollars in debt due to these wars. We should have been protesting the invasion of Iraq in 2003 but oh wait…. Everyone was flipping houses, getting HELOC money to buy BMW’s and take great vacations while I was eating sand for the past 10 years. BUT NOW you want to start bitching about the MIC?? Hypocrite!"

I was at every antiwar event here in the Bay Area before the Iraq invasion. You don't know me and I don't know you, but know that you have been lied to - bigtime.

The restrictions on building height, as mentioned by mdovelll and PersianCat, are downright criminal.

I'll never forget my first visit to DC as a teenager in the late '90s: White House and Capitol Building aside, it did not feel like the capital of anything.

No tall buildings, at least by the standards of this New Yorker. Vast amounts of space between all the buildings. And outside the city, automobile-dependent housing tracts that took up obscene amounts of space. Go northwest of the city and look at all those cul-de-sacs and needlessly-twisting roads. Imagine how much more compact and efficient this could be! Don't like paying those ridiculous prices for real estate? Look right there: wasted space by the mega-acre.

Washington, DC is the nation's capital. The low density at which it was built, and the even lower-density residential housing outside the city, much of which has pathetically limited access to trains and which are not livable without an automobile (no stores within walking distance, for an entire development!?) should have gotten entire generations of city planners fired. As I've said before, a "No Coloreds" community would be a disgusting, racist affront to anyone's sensibilities, but "No Non-Drivers" communities are everywhere, unremarkable, just as discriminatory... and they're sending RE prices sky high.

How was this allowed to happen?

monkframe says

but know that you have been lied to - bigtime.

Believe me, I know.

There are no tall buildings in DC for the same reason there are no tall buildings in Rome -- they would block the view.

Washington is specifically designed so that views of the Capitol are not impeded. For decades the tallest building in the city (and perhaps today) was the National Press Building. The Press Club is on the 13th floor.

OurBroker says

There are no tall buildings in DC for the same reason there are no tall buildings in Rome -- they would block the view.

Washington is specifically designed so that views of the Capitol are not impeded. For decades the tallest building in the city (and perhaps today) was the National Press Building. The Press Club is on the 13th floor.

Then the Capitol should have been made much taller!

It's really not the center of the city, though, so much as those endless, land-devouring suburbs. Had density there been built even at central-DC scale, the problem wouldn't be as bad.

My brother lives among that sprawl and the development he and his wife moved into pulled something of a bait-and-switch on the residents. Promises of bookstores and shops among the townhouses failed to materialize, and he's stuck getting in his car and onto a 50-mph highway-like road just to pop down to get some milk at what should be the corner store because there's literally no non-residential zoning within a mile of his house. Without a car, his neighborhood would be unlivable.

>>>Then the Capitol should have been made much taller!

The Capital building is on, er, Capitol Hill...

From Case-Shiller this morning:

>>>On an annual basis, 18 of the 20 MSA’s (as well as the two Composites) were down in July 2011 over July 2010. Detroit and Washington DC were the only two MSA’s that posted positive annual rates of change