As Washington, D.C., voters head to the polls to select a new mayor, real estate stakeholders say it isn't about how many houses and apartments the candidates are pledging to build — it's about policy.
Developers, building owners, agents and experts contend that the nation's capital remains a challenging environment for multifamily projects and other residential developments, and its next top elected official needs to drive capital back into the city.
Voters will choose between a slate of aspiring officeholders in the June 16 primary, including Democratic frontrunners Kenyan McDuffie and Janeese Lewis George, who have both gained experience on the D.C. Council.
Washington's real estate community has emphasized that some of the candidates' new housing supply goals may be more feasible than others, but in their view, regulatory reform that spurs investment should be the next mayor's priority.
Multifamily construction in Washington has been leveling off, given tighter capital markets, rising costs and a sharp reduction in groundbreakings, according to CoStar's latest market report. Meanwhile, townhouse and single-family detached homebuilding have been limited, with an average of 237 houses built each year over the past decade, according to the U.S. Census Bureau. The number dropped to 181 last year.
"Whether one has a higher number of units, and whether we can achieve that number of units, to me is not actually important," Patrick McAnaney, a director of development at Somerset Development Co., told CoStar News in a phone interview. "It is what are the actual policies that they will put around it, because a target is not actual policy."
The District's next leader is expected to usher in a new era of commercial and residential real estate.
Longtime Mayor Muriel Bowser made good on her second-term promise to develop 36,000 homes in the city by 2025, reaching that goal five months ahead of schedule. While most of that was new construction, a small portion consisted of existing residences preserved under affordability covenants.
Since Bowser first entered office in 2015, the city has seen more than 50,000 homes built, a quarter of them affordable.
Bowser, who has a reputation for being business- and developer-friendly, is also committed to bringing 15,000 new residents to downtown by 2028, and a series of office-to-residential conversions throughout the city is helping to achieve that.
Since her start in the first quarter of 2015, office vacancy across the Washington area has risen from 13.6% to 17.6%, while retail vacancy remains consistent at around 4.4%, per CoStar data.
Bowser's tenure hasn't been without obstacles, including the COVID-19 pandemic and sweeping federal workforce layoffs. She has also frequently butted heads with the D.C. Council's more progressive members.
Among her most high-profile accomplishments was securing control of nearly 180 acres of federal land along the banks of the Anacostia River to establish a new stadium for the NFL's Washington Commanders and create a wider mixed-use neighborhood.
Keeping the nation's capital a sports destination with the ongoing revitalization of Capital One Arena, seeing through the development of The Wharf neighborhood on the Southwest waterfront and selecting a wellness retreat to transform underdeveloped land in Southeast Washington are just a handful of the other projects the city has moved forward with in the past decade.
“I used to drive around the city and see cranes everywhere. They’re few and far between now."
It remains to be seen whether the next city leader plans to expand measures adopted by Bowser's administration, or if they'll take guidance from other newly elected mayors like Zohran Mamdani in New York. What is certain is that whoever is tapped to take the reins will face hurdles in addressing the health of the District's commercial and residential real estate industries. Washington continues to face the consequences of federal job losses, relatively high office vacancy, limited new construction and a reported drop in both consumer spending and visitor demand.
The Democrat selected in the primary to make the general election ballot in November is likely to be the next mayor, as no Republicans are running for the position. The District has had a Democrat at the helm since the 1970s, when the District of Columbia Home Rule Act enabled D.C. residents to elect a mayor.
Who are the candidates?
When Bowser said in the fall she would not run for another term, several candidates stepped up for what is set to be the first election in the District to use ranked-choice voting.
Former D.C. Councilmember Kenyan McDuffie, who spent more than a dozen years in the local legislative body, is backed by the Small Multifamily Owners Association, Associated Builders and Contractors Metro Washington, the Greater Capital Area Association of Realtors, the District of Columbia Association of Realtors and the Restaurant Association Metropolitan Washington.
Current D.C. Councilmember Janeese Lewis George, a self-described democratic socialist who's been compared to Mamdani, has served on the council since 2021 and is supported by a number of labor unions, the nonprofit Greater Greater Washington and DC YIMBYS.
Others competing to become mayor include real estate developer Gary Goodweather, broker Ernest Johnson, former Councilmember Vincent Orange, former Georgetown Business Association vice president Hope Solomon and federal contractor Rini Sampath. Bowser has not endorsed a successor, as of this publication.
How do the candidates' plans differ?
On housing, McDuffie has set his sights on creating 12,000 housing units by 2030 and preserving 20,000 affordable residences, while Lewis George is aiming for a whopping 72,000 new homes over the next five years.
To pay for her plan, Lewis George said she'll leverage federal dollars and the city's Housing Production Trust Fund, a special revenue allocation used to produce and preserve affordable homes. The fund gets its money from deed recordation and transfer taxes, as well as the District's general fund.
She said she also plans to streamline the building permitting process and overhaul the building code.
"There's no way that she's going to build 72,000 units of housing," McDuffie said in a debate earlier this spring. "It costs too much to build in Washington, D.C."
In response, Lewis George said her opponent's plan is "not ambitious enough. It doesn't meet the moment. It doesn't meet the crisis."
Goodweather has proposed 50,000 new homes by 2032.
McDuffie's plans also entail establishing a housing ombudsman and accelerating the conversion of vacant federal office buildings.
On the commercial end, Lewis George wants to promote mixed-use development to reduce downtown office space to 50% or less; provide free temporary or permanent spaces for pop-ups, incubators and small businesses in D.C.-owned properties or in vacant commercial buildings; and create public grocery stores in underserved neighborhoods east of the Anacostia River.
What do CRE developers and experts say is feasible?
"I used to drive around the city and see cranes everywhere. They're few and far between now," Ian Ruel, the co-founder and managing principal of Feldman Ruel, told CoStar News in a phone interview. He added that McDuffie's number is more realistic.
Nigel Crayton, a senior director at Greysteel and co-leader of the firm's mid-Atlantic multifamily team, emphasized that "certainty and partnership" is what the industry is looking for from the next mayor, meaning assurance of consistent policies.
To increase housing development in the city, industry leaders said officials need to double down on legislative changes that incentivize investment.
McAnaney, of Somerset, said there has been a huge drop in investor interest in Washington due to broader macroeconomic challenges affecting market-rate housing and nonpayment of rent for affordable housing.
He cited the passing last year of the RENTAL Act — legislation that exempts certain multifamily buildings from requiring an offer of sale to tenants — along with recent reforms to the DC Emergency Rental Assistance Program, which reworked policy on eviction cases, as steps toward addressing the situation. But he acknowledged that they are not enough, and that it will take time to determine whether they're working and what else needs to be done.
Other recent legislative moves the industry is watching:
- A council-approved measure to allow six‑story residential buildings to have a single stairwell, replacing a previous three‑story limit.
- New legislation to expand short-term rental options.
- The creation of tax break programs, like the 20-year abatement initiatives known as Housing in Downtown and Office to Anything, to spur conversions.
Liz DeBarros, CEO of the District of Columbia Building Industry Association, said her team is not endorsing a candidate, but whoever is chosen should look at "rigid, mandatory regulations that offer no flexibility" and can be "cost-prohibitive," such as those on bird glass and moving heritage trees.
"The city's going to have to formally invite investors back. There's too many moving parts and too many hurdles to build," DeBarros told CoStar News in a statement. "Collectively, these issues make it incredibly difficult to get a shovel in the ground for commercial development and most certainly for new housing in this rewired DC market. If we want more housing, we have to address the stability of the process itself."
Building up neighborhoods and major corridors
More than 50,000 new market-rate and affordable residences have been built during Bowser's tenure. More than half of them are concentrated in two of the city's eight wards, which are political designations used for voting and representation.
A large share of the new construction has been in the city's NoMa, Wharf and Navy Yard neighborhoods. The new housing has consisted mainly of large multifamily buildings, with a tendency toward studios and one-bedroom apartments rather than larger family-sized units.
While the city has a vision for some additional large-site housing projects, including at the Robert F. Kennedy Stadium site near the Anacostia River, some policy experts and real estate agents said the answer is not to try to build more of the same. Instead, they said, the city should emphasize infill, building more in older neighborhoods and along major commercial and transportation corridors.
"In order for the city to grow, it requires all types of housing, not just multifamily," Yesim Sayin, D.C. Policy Center executive director, told CoStar News. "You need start-up units, maybe small townhouses and single-family, low-rise multifamily. Those things are extremely difficult to build in D.C. right now because there is simply no room."
A report released last month by Sayin's group calls for doubling the share of the city's land area where multifamily housing is permitted to 50%. In areas where only single-family houses are currently allowed, the report said, this could generate 4,500 new residences over 10 years in small buildings with two to four units.
The group also backs eliminating parking requirements, allowing smaller lots and encouraging accessory dwelling units — smaller units located on the same lot as a primary residence — to stimulate new construction. And it said the city should allow residential buildings in certain neighborhoods up to the limits of the federal Height Act, or 90 feet. The law restricting the height of buildings in Washington dates back to 1910.
Both McDuffie and Lewis George have expressed support for reforming the city's rules to allow more housing types, but they have shared few specific policy changes. Neither could be reached for comment for this story.
Georgetown is a good model for other urban neighborhoods in the city in how it accommodates a variety of housing — from single-family to small apartment buildings, Robert Hryniewicki, cofounder of HRLS Partners at TTR Sotheby's International Realty, told CoStar News.
That mix of home types doesn't always make sense, however, for more suburban-style neighborhoods farther from the city center, David DeSantis, TTR Sotheby's CEO, said in an interview.
"Frankly, single-family areas are what make D.C. an attractive place to live," he said. "I don't know that it would be a good thing to significantly upzone those neighborhoods. Having said that, it's been a struggle for years to grow major corridors like Connecticut and Wisconsin avenues. We have to develop them — we're a major city."
Matt Cheney, a D.C. agent with Compass, sees building townhouses in single-family neighborhoods as feasible, but even that modest uptick in size can draw a backlash.
"It's a double-edged sword, because I know some folks who have moved out of Arlington County [across the river from D.C.] after they allowed townhouses in single-family areas there. It's perceived as driving down values."
Judy Chesser, who chairs the Committee of 100 on the Federal City, a century-old grassroots group that seeks to protect Washington's historical appearance, suggested that efforts to upzone neighborhoods would face significant opposition.
"Four-story apartment buildings in the single-family neighborhoods — I would suggest that's pretty dramatic," Chesser told CoStar News.
She added that the city is taking a "leap of faith" by pointing to a projected population increase to justify building more housing, though recent federal layoffs could cause the city to lose people instead. The population fell in 2025 to 693,000 residents after topping 700,000 the prior year, according to the U.S. Census Bureau.
Other areas for potential reform
To encourage more housing development, the city needs to streamline the permitting process, experts said.
"When you look at permits, the first step one has to take is to get one, and it's generally two to four years before the actual unit materializes," Sayin said. Her group's recent report describes the city's permit system as "slow, fragmented and difficult to navigate," making it hard for developers to justify the cost of some projects.
Harrison Beacher of Keller Williams Capital Properties, who is also president of the D.C. Association of Realtors, told CoStar News that he agrees the city seems to put up many obstacles to construction.
"You've got to do inspections, do things safely, correctly, but also move them along the pipeline," Beacher said. "For people who still want to invest in the city, how do we reduce the friction?"
If the city is serious about helping first-time homebuyers, it should not further reduce funding for its Housing Purchase Assistance Program, Beacher said. A source of down payment and other financial assistance, the program received $25 million in funding in the current fiscal year, down from $31 million in fiscal 2025, according to The Coalition, a nonprofit economic development advocacy group.
The city should also intensify efforts to transfer buildings the federal government is trying to unload into housing developers' hands, Sayin said. She pointed to the FBI's headquarters downtown, which the agency said it will vacate. Sayin estimates that building alone could hold some 2,000 housing units.
In an effort to rightsize its real estate portfolio and save taxpayer money, President Donald Trump's administration has accelerated the disposition of federal office buildings nationwide. At least two have sold in recent months in D.C., with several more listed for sale, creating opportunities for possible housing redevelopment. Bowser has even proposed a tax break to encourage office-to-residential conversions of government properties.
District incomes, home prices rise
The median household income in Washington was about $110,000 in 2024, according to the U.S. Census Bureau. That's up 29% from where it was near the end of Bowser's first term, in 2018, outpacing a roughly 15% to 20% increase in median home prices over the same period.
Sales prices have fluctuated in recent months, falling about 12% in April from the year prior. The city's median sale price was $605,000 that month, according to Homes.com's Washington, D.C., market report, making it the nation's eighth-priciest housing market.
The federal government eliminated an estimated 348,000 jobs in 2025, according to the Pew Research Center. While that led to an uptick in the supply of homes on the market as some former workers moved out of the city, it doesn't appear to have had an obvious impact on prices.
"We need more housing. For a myriad of reasons, we need to be building more," Mark Simpson, director of Planning & Economic Development for the DowntownDC Business Improvement District, said during a conference earlier this year, noting his group is thrilled about the mayoral candidates' housing goals.
"But, these visions cannot become a reality if we do not continue the policy gains like the ones we saw in the RENTAL Act, the investments and abatements and things like the Housing in Downtown program or the Office to Anything program, and we need to look creatively at public financing mechanisms that can make projects pencil that otherwise would be stuck in the pipeline."