D.C.’s ‘Missing Middle’: How Moderate-income Earners Are Squeezed Out of Affordable Housing

For many years, D.C. has experienced a housing crisis affecting low-income residents, but, often those earning a moderate income have a difficult time finding affordable housing too. 

Often, many working class residents are left behind due to making too much money to qualify for certain assistance programs like the Local Rent Supplement Program (LRSP), among others. This shortage of housing is called the “missing middle” and is “in critical short supply,” according to the National League of Cities (NLC). 

One housing leader said that agencies have had to get creative financially when working with developers to help moderate-income individuals get housing, even if it means reducing their return on investment. 

“We’re saying, look, we understand that there’s a missing middle out there that’s not being addressed, and we think that pays for itself if we bring some creative financing to kind of fill the gap,” said Christopher E. Donald, CEO of the DC Housing Finance Agency. 

Donald explained how the DC Housing Finance Agency is working to address the challenges. 

“So, we partnered together with developers, we put our money in, we’ve taken a lower return on our money, which allows that developer to charge less than he could, because he could max out that price, but instead of maxing it out, he brings it down so that it’s affordable to people who are part of the working middle,” he added.

Just last month, the Coalition for Non-profit Housing and Economic Development (CNHED) celebrated its 25th anniversary with a Silver Jubilee gala, bringing together government housing leaders including City Council Members Phil Mendelson and Kenyan McDuffie, advocates and corporation leaders who have helped shape the landscape of community economic development in Washington.  Led by its President and CEO Stephen Glaude, CNHED awarded community members for their advocacy in impact in serving low- and moderate-income communities (LMI) and progress in addressing the missing middle.

When it comes to who qualifies for housing, reconsidering who gets helped should be revised, according to Tyrell Holcomb, Jubilee Housing’s vice president of external affairs, who focuses on advocating for affordable housing. 

“I think we’ve got to start having the conversation about what it means to examine housing that’s reflective of what you make, so income-based housing, as well as thinking about how we’re providing opportunities for our frontline workers,” he said during the CNHED gala that took place at the Andrew W. Mellon Auditorium in Washington. “And those who are our teachers, our doctors, our firefighters, our journalists, the folks who make our economy work, the folks who make our city work, making sure that they have equal opportunity.”

In 2019, according to the Center on Budget and Policy Priorities, a non-partisan think tank, housing costs were outpacing wage growth in nearly every state in 2001. In 2024, reporting from the CBS News Money Watch team shows a rise in rent and a lack of wage matching. 

According to Glaude, president and CEO of CNHED, middle and low income have become synonymous. 

“So, lower-middle income is the new lower income. Meaning that typically, you try to provide housing assistance between zero and 80 [area median income] (AMI). But we see a big need between 80 and 120 (AMI), and what that really means in layman’s terms is that typically we direct subsidies and resources and assistance, to the very low income,” he explained. “But what we’re seeing in D.C., because of our market pressures, is that we need assistance for lower middle-income people as well, which is really the upper band of people that cannot independently afford housing in the District of Columbia.” 

During the gala, Shae Harris of JP Morgan Chase among others awarded changemakers that prioritize the needs of LMI District residents. The District has already put funding in place for residents needing assistance to contribute to Black and brown communities.  

However, Holcomb said, “[D.C.] needs to do more to ensure that we are funding at a substantial amount that allows [District of Columbia Housing Authority], to run their program as efficiently as possible.”

In discussing strategies for expanding affordable housing beyond D.C.’s Ward 7 and Ward 8, Holcomb highlighted the need for equitable development across all communities.

“I think there are ways that we can really balance the scale and think about what it means to do affordable housing in communities beyond Ward 7 and Ward 8,” Holcomb said. “Jubilee Housing is an example of what it means to be able to create opportunities for people to thrive and grow and even age in place beyond Wards 8 and 7.” 

A report from the Brookings Institute titled “Education and the dynamics of middle-class status” states that the ability to enter the American middle class is made possible through higher education. But what happens when individuals with college degrees find themselves ineligible for housing assistance due to income limits that may not fully reflect their financial circumstances?

Holcomb responded by emphasizing that there is a disconnect between encouraging education and societal contribution while failing to provide clear solutions for affordable housing.

“Is not fair for us to say, ‘Hey, go get your education, contribute to our society, but we don’t know what to tell you when it comes to housing,’” he said.