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Report: ‘Affluent families are displacing low- and middle-income families’ from D.C.

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The District’s prosperity has not benefited all residents, the D.C. Chamber of Commerce says

The Wharf, a high-end development in Southwest D.C.
The Washington Post/Getty Images

A D.C. business group that has previously criticized the District’s unemployment and estate taxes as well as its progressive paid leave law for being too costly has a different message in its latest report: Many people are falling behind or moving out as the local economy booms.

Published on Wednesday, the D.C. Chamber of Commerce’s “State of the Business Report” for 2018 explores how the District’s renaissance has not benefitted everyone, even though D.C. is thriving overall. The report marks a change in tone and focus for the group, founded in 1938 and now headed by ex-D.C. Councilmember Vincent Orange. One indication of that shift: The word “inclusive” is in the report’s title but appeared only twice in last year’s report.

In his introduction to the 2018 edition, Orange writes that the publication “is the beginning of the D.C. Chamber’s aggressive advocacy for quality education for all, affordable housing for all, and a highly trained workforce for every business.” He also says “the exodus of low- and middle-income families from the District continues unabated,” with income inequality getting worse and with concentrated poverty dividing the city “into haves and have-nots.”

“Some readers of this report might ask why the D.C. Chamber is examining the impact of these critical so-called social issues,” writes Orange, adding that the group is still devoted to issues like workforce development, international trade, and regulatory reform. “...[O]ur economic prosperity and robust employment levels depend on addressing the disruptive effects of population growth and development that have remade our neighborhoods.”

Chief among those disruptive effects, according to the chamber, is the displacement of longtime residents who can no longer afford to reside in the District. Citing U.S. Census Bureau data, the report says that between 2009 and 2016, some 4,300 families who had incomes of less than $35,000 a year left D.C. Meanwhile, more than 10,000 families who had incomes of more than $200,000 a year arrived during that time—accounting for the vast majority of income growth and currently comprising 22 percent of all families in the city.

“The consequence of this change is affluent families are displacing low- and middle-income families, who now comprise 52 percent of all families compared to 64 percent just 10 years ago,” Orange explains. The report says D.C. has become “whiter and richer” in recent years, as have other cities, but “is unique” in that wealthy families are largely driving displacement forces, not “young persons, artists, or other groups typically associated with gentrification.”

D.C. Chamber of Commerce/D.C. Policy Center

The D.C. Policy Center, a local think tank, complied the report on behalf of the chamber, and the Office of the Deputy Mayor for Planning and Economic Development “provided financial support and guidance.” The report states that “funders do not determine research findings.”

Among other insights, the report finds that although the District’s population has swelled to around 700,000 (a 20 percent increase from a decade ago) and includes more families, the homeownership rate has gradually dropped since 2007—to 40.3 percent from 47.2 percent. In part, the decline stems from newer construction involving rental instead of for-sale units, according to the report. But also fewer starter homes are affordable to young families today.

District homeownership is especially low among communities of color, the report says. The authors cite a 2016 study by the Urban Institute—another D.C.-based think tank—that found that the typical white household in the District had a net worth 81 times greater than the net worth of the typical black household ($284,000 compared to $3,500). The chamber reports that 47 percent of households headed by white residents own their homes versus 36 percent of those headed by black residents. Within both groups, buying is not within reach for many.

D.C. Chamber of Commerce/D.C. Policy Center

Per the authors, income is not the only barrier to finding an affordable home in D.C.; tight supply is as well. “The District’s housing stock suitable for families is extremely rigid,” they write. “Many neighborhoods filled with single-family housing cannot accommodate new units unless older ones are demolished. In neighborhoods with good schools, quality retail and public transportation, there is little public acceptance of new multi-family buildings.”

The chamber currently has more than 1,400 members (including, as of recently, Amazon). The D.C. Policy Center—the think tank that prepared the report—was established in 2016.