Wealth

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April 20, 2012 | 2:15 PM | By

The Complexities Of Rent Control

Derek K. Miller / Flickr

Expensive rents can be a byproduct of gentrification and rising property values. So isn’t rent control one way to keep housing affordable?

Turns out that it’s not always that simple.

This week’s Washington City Paper Housing Complex column explores how one developer’s approach to purchasing and renovating old apartment buildings in D.C. has become a double-edged sword for renters. When landlords wants to sell their buildings, a D.C. law requires that they offer tenants the first right to buy. Urban Investment Partners buys old buildings, but they get the tenants to waive their right to purchase by striking deals that include keeping rents relatively stable for original tenants. Those old buildings need major renovations, and the company pays for them by substantially increasing rents for newcomers to the building. The result: rent-controlled, low rates for those who remain, but the number of affordable apartments in the building — and the city– declines.

But what other options exist? The pot of money intended to preserve affordable housing in the District is dwindling. For-profit developers want to make money, and it’s difficult to massively renovate a building without charging people more to live there.

These issues disproportionately affect people of color in the District. About twice as many African Americans, Asians and Latinos rent rather than own homes in D.C. Meanwhile, nearly the same number of whites own homes as rent them in D.C. About 55 percent of people who live in D.C. rent.

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FILED UNDER: Government, Affordable Housing, Housing, Rent Control, Renters, Washington City Paper, Wealth
March 7, 2012 | 10:07 AM | By

Poor Children, Rich Neighbors

Hawkins / Flickr

Columbia Heights is an economicaly diverse neighborhood, home to luxury high-rises and public housing.

Researchers have long noted the ills of growing up in a neighborhood of concentrated poverty — graduation rates are higher lower, access to healthy food is more limited and violence is more common.

“Neighborhoods of concentrated poverty are really hard on children,” said Gwen Rubenstein, deputy director of DC Action for Children, who ran the recent Kids Count report that found that concentrated poverty has dropped in D.C. She noted that children from upper and middle class families who live in high-poverty neighborhoods have an increased chance of being poor as adults.

But do poor children benefit if they live in neighborhoods of concentrated wealth? It’s a question that hasn’t been explored much in D.C. but one worth asking, given that the city’s childhood poverty remains high — one in three District children lives below the poverty line. At the same time, fewer kids live in neighborhoods of concentrated poverty now than a decade ago, but it’s not because their families are faring better. Rather, as more affluent people moved into neighborhoods that once had high poverty rates, more poor children are finding their neighborhoods transformed into wealthier places.

There’s a reluctance “to talk about concentrated privilege,” Rubenstein said. “Areas of concentrated privilege and poverty — we need to be talking about it and what it means for a community.”

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FILED UNDER: Around the City, Childhood Poverty, Wealth
February 7, 2012 | 12:30 PM | By

Five Facts About the Marriage Gap

Geoffrey Fairchild / Flickr

How likely you are to be married may depend on your economic stability and income. Marriage rates today differ depending on class, according to a new study by the Brookings Institution. Here are five facts behind the marriage gap:

There’s an association between marriage status and poverty.

Children born into single-parent households are more likely to live in poverty. That’s obviously not the case for everyone, but it’s more difficult to make ends meet for those who don’t have another breadwinner in the house.

In D.C., 3.8 percent of married couples with children live in poverty. But 42.3 percent of female-headed households with children live in poverty, according to census estimates. The median income for single women with families is $33,485; for single men with families, it’s $46,670; and for married couples with families, it’s $133,338.

It’s not all bad: declining marriage rates among women are partly due to increased independence.

Women are waiting longer to get married than 40 years ago. They have more freedom to pursue careers outside of the home, more control over when they want to have children and have “the ability to be more selective when choosing a spouse,” researchers noted. In 1970, 44 percent of middle aged women had no independent earnings. Today, only 25 percent don’t make their own money.

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FILED UNDER: The People, Family, Marriage, Poverty, Wealth
November 16, 2011 | 1:08 PM | By

Occupy DC Misses Golden Opportunity

Nicholas Kamm / AFP/Getty Images

U.S. Treasury Secretary Tim Geithner (R) and Wall Street Journal editor Gerard Baker (L) at last year's Wall Street Journal CEO Council, held in Washington, D.C. on November 16, 2010.

On Monday and Tuesday, 120 of the world’s top executives convened at the Four Seasons hotel in D.C. for the annual Wall Street Journal CEO Council. The people assembled represented companies generating a combined total of $2 trillion and employing 5 million people, according to the organization’s website. In addition to CEOs, attendees included lawmakers, policy wonks and former ambassadors. The meeting’s theme centered around China’s role in the global economy, job creation and American deficits.

The meeting brought together, in essence, the 1 percent around which the Occupy movement protestors have centered their critiques. And yet, Occupy DC protestors weren’t at the meeting. Occupy DC participant Brandon Darby, a member of the group’s media team, said protestors didn’t know about the meeting.

“As far as I know, we didn’t do anything [at the CEO meeting],” he said.

Darby said Occupy DC has a committee that focuses on finding events where protestors could get involved. It’s no small task figuring out where to go in a city like D.C., where such events happen very frequently.

“If we went to every single thing like that, it would rapidly spiral into us doing nothing but going to those kinds of meetings,” Darby said. “We definitely sort of pick and choose.”

Protestors probably didn’t hear about the meeting “because a lot of the energy was focused on what was going on in New York,” Darby added.

Early Tuesday morning, New York City police cleared Zuccotti Park of Occupy Wall Street protestors, under orders to clean the area. The middle-of-the-night raid outraged protestors around the country. In D.C., protestors spent part of the day Tuesday marching to Brookfield Properties’ D.C. office. The company owns Zuccotti Park.

FILED UNDER: Occupy DC, Wealth
September 21, 2011 | 11:43 AM | By

Poll: Is the D.C. Tax Hike Fair?

Plashing Vole / Flickr

While the national debate on raising taxes on the wealthy rages on, D.C. has already made its move. On Tuesday, the City Council narrowly approved a tax hike on those making more than $350,000 a year. The measure raises the tax rate by 0.45 percent, affecting about 6,000 D.C. residents.

Despite the strong divide in the District between the rich and poor, the debate surrounding a tax hike on wealthier residents is quite contentious, with some officials calling it fair and others characterizing it as lazy government. So, what’s your take on the tax hike? Participate in our poll below — or leave your own answer in the comments below:

FILED UNDER: Government, Income disparity, Taxes, Wealth
August 18, 2011 | 12:52 PM | By

D.C. Home Ownership By Race

Alan Cleaver / Flickr

Whites make up the largest percentage of D.C.’s home owners, and they are followed closely by African Americans. That’s according to new U.S. Census Bureau data detailing the race of people who are on deeds and leases of the District’s 266,707 occupied housing units.

Despite the seeming parity between whites and blacks in home ownership, there are far more black than white people in the District — 70,702 more in 2010 — and a disproportionately low number of blacks own homes when compared to whites. Whites over-represent home owners.

As for renters, African Americans are on most of the leases in the District, followed by whites, Latinos and Asians. And all of this data excludes D.C.’s 17,316 multiracial residents, which constitute 2.9 percent of the city’s population.

Owner-occupied units
 Renter-occupied units
 Percentage of total population
Black: 48,887 77,012 50.7%
White: 51,838 55,144 38.5%
Latino: 5,676 12,342 9.1%
Asian: 3,311 6,246 3.5%
Source: U.S. Census Bureau

Why is home ownership so important? It’s long been viewed as one of the keystones in building wealth and climbing out of poverty. And although the black middle class was particularly hit hard when the housing bubble burst because so much of their wealth was tied up in home equity, District home owners have fared better than elsewhere. D.C. is the only city where housing prices increased over the past year. The District’s home ownership rate has risen by 45 percent over the past decade, but it appears the rate isn’t increasing fast enough for everyone.

FILED UNDER: The People, Housing, Race, Wealth
July 28, 2011 | 1:40 PM | By

How to Close the Wealth Gap

David Steltz / Flickr

The gap in wealth between whites, blacks and Hispanics has grown to historic levels, as discussed on today’s Diane Rehm Show.

“These people draw upon their assets… to finance their children’s education, or to help with children’s tuition or to use as a down payment on their first home,” Roderick Harrison, senior research fellow at the Joint Center for Political and Economic Studies, said on the show. “This will play out not only until we see the net worth of these families rising back to the levels that they rose to in 2005, but it will play out in the lives of their children.”

We caught up with Harrison after the show to ask if D.C., with its rising home prices, stands in contrast to the growing wealth gap seen on a national level. He said, “D.C. is an exaggeration. It’s more polarized by income and by race [than elsewhere].”

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FILED UNDER: The People, Economy, Employment, Wealth
July 26, 2011 | 11:13 AM | By

Racial Wealth Gap Reaches Historic Levels

MoneyBlogNewz / Flickr

The wealth gap between whites and minorities has always been wide, but the recession has deepened the division to a record level.

The racial difference in wealth — how much a person owns minus any debt — is the most severe its been since the government began publishing the data in the 1970s, according to a new Pew Research Center report.

Members of the black middle class have seen many of the economic gains they’ve achieved over the past few decades erased or reversed during the recession, and black households have much less wealth than other groups. But Hispanic households experienced the biggest drop in household wealth during the recession:

Median Net Worth of Households
2005 2009 Percentage Change
White $134,992 $113,149 -6 percent
Black $12,124 $5,677 -53 percent
Hispanic $18,359 $6,325 -66 percent
(Source: Pew Research Center)

The housing crisis is one of the principal causes of the gap widening, according to the report. Hispanics and blacks had more of their wealth tied up in home equity, so when home values dropped or homes went into foreclosure, they saw much of their wealth disappear.

The study examined wealth between 2005 and 2009. Since then, housing prices have risen, particularly in D.C. But an increased home value may not be enough to offset lasting effects of the recession on minorities, as NPR reports:

Tom Shapiro of Brandeis University, who has studied the racial wealth gap for years, says he’s concerned about the long-term impact. He thinks the wealth gap will likely grow even more, unless the economy turns around soon.

“If a family doesn’t have enough for a safety net for itself, it can’t think about moving forward or moving ahead,” he says.

That means fewer resources for things like education or buying a house or starting a business. Shapiro says that only puts the average minority family further behind, and less able to weather the next economic storm.

FILED UNDER: The People, Economy, Recession, Wealth
May 19, 2011 | 3:09 PM | By

‘Will Work for $44 Million’

Some guerrilla marketing hit D.C.’s streets this morning with young, suited men promoting HBO’s film “Too Big To Fail,” as tweeted by @PeoplesDistrict.

Courtesy of Danny Harris/People's District

A promoter for HBO's "Too Big To Fail" holds this sign up at 14th and I streets NW Thursday morning.

The signs may seem more appropriate on Wall Street, where financial executives are more likely to pull in multimillion dollar salaries, than in downtown D.C. But there are definitely people living or working in the District who aren’t doing so bad for themselves. Contrast that with the city’s poverty rates: D.C. has one of the highest percentages of children living in poverty (29.4 percent) and seniors living in poverty (14.6 percent).

FILED UNDER: Media, The People, Wealth
April 12, 2011 | 3:07 PM | By

Forbes Reminds Us Of D.C.-Area’s Wealth Disparity

Flickr: The.Comedian

Forbes just came out with its list of top 10 richest counties, and guess what: four of them are in the D.C.-area.

And what isn’t on that list? D.C., of course. The richest jurisdiction is Falls Church, which boasts a median household income of $113,313. According to 2008 U.S. Census Bureau statistics, D.C.’s median household income was $58,553 — which not only falls extremely short of all top 10 counties on the list, but barely exceeds the 2008 national average of $52,029.

From the story:

In recent decades northern Virginia has become an economic dynamo, driven by a private sector that feasts on government contracting. These counties are also home to corporate lobbyists, lawyers and consultants who work in or around the nation’s capital, soaking up federal government spending. And government-related hiring manages to keep the unemployment rate in places like Falls Church City down to 5.7%.

That so many District-based jobs are held by non-District residents has long been a point of contention for D.C. leaders and community organizers, particularly since unemployment ranges from 10 to 15 percent in parts of the city.

FILED UNDER: Media, The People, Forbes, Wealth