The perennial conversation around affordability in DC stems not just from high prices, but also from household incomes that are insufficient to cover costs—a situation that is particularly acute for Black households. Decades of historical and ongoing discrimination have greatly limited the economic outcomes of Black households, who in turn face the brunt of the District’s enduring affordability crisis. On average from 2020 to 2024, nearly 61 percent of Black households in the District had incomes below the estimated amount needed for an adequate standard of living, according to new analysis by the DC Fiscal Policy Institute (DCFPI).
Affordability Is About Both Prices and Income
To examine how DC residents’ income stacks up to the cost of living, DCFPI used the Economic Policy Institute’s Family Budget Calculator (FBC), which provides modest estimates of an adequate standard of living in the District for ten common household types (Table 1). Based upon the number of individuals in the household, the FBC calculates the yearly income required to afford essentials, including housing, food, childcare, healthcare, transportation, taxes, and other necessities. Out of an estimated total of 325,000 District households, the FBC provides estimates of an adequate standard of living for 285,000 of them in ten common household types, on average from 2020 to 2024. Notably, the FBC does not account for households with three or more adults.
Table 1:
For all households, the income required to reach an adequate standard of living is extremely high. For example, a household with one adult and one child would need to earn $125,468 a year to afford DC, including over $24,000 required to cover childcare costs. (All dollar estimates in this blog are in 2026 dollars.) As household size increases, it becomes increasingly difficult for a family to afford to live in the District. A family of two parents and two children would need an estimated $179,919 to attain a modest standard of living, well above DC’s median yearly household income of $116,000 in 2024.
The high thresholds required to attain an adequate standard of living in DC are the direct result of high prices for goods and services. According to Urban Institute’s Affordability Tracker, the District has some of the most expensive average monthly grocery and childcare costs in the country.
Of course, there is more to affordability than just the cost of essentials—bigger paychecks can offset high prices. Yet a significant portion of District households do not earn enough to make ends meet. More than one-third (37 percent or 104,000 households) of District households tracked by the FBC fell below an adequate standard of living, on average, from 2020 to 2024. Even for single person households, which need $72,000 to afford DC, 41 percent fail to reach the income needed for an adequate standard of living (Table 2).
Table 2:
Black Households Face an Enduring Affordability Crisis
High prices hit Black District households particularly hard because of the long-term suppression of earned income, driven by employment discrimination and systemic racism. Black workers in the District are more likely to work lower-paying jobs than white workers, limiting their economic opportunities.
Moreover, Black household income growth, regardless of household size, has stagnated when accounting for inflation. From 2017 to 2024, Black real median household income increased by only $5,000 to $62,000—not a statistically significant change. This income falls well below the District’s overall median income and any of the FBC’s thresholds for an adequate standard of living. Comparatively, the real median income of white DC households grew by a statistically significant $10,500 from 2017 to 2024 and is now an estimated $174,000, nearly three times as much as the Black household median income.
Figure 1:
As a result of stagnating incomes, Black households are less likely to be able to afford price increases for goods and services. While the affordability crisis affects most District residents, it is acutely felt by Black households. On average from 2020 to 2024, nearly 61 percent of Black households in the District did not reach an adequate standard of living set by the FBC. In comparison, only 16 percent of white households did not reach the same thresholds.
This analysis shows that as policymakers consider solutions to the affordability crisis in DC, they need to focus on both bringing down the cost of goods and services, such as housing and childcare, and increasing household incomes. In particular, policymakers should focus on affordability for Black residents, who have felt the increasing costs of goods and services most acutely because of chronic disparities in employment and income due to systemic and ongoing racism.
