MENU
Adding 100,000 DC Residents

IMPROVING DC'S TAX BASE BY REVITALIZING ITS NEIGHBORHOODS

A Vision Taking Shape...or a Myth Perpetuating Itself?

Summary:

Though it may be sociologically attractive, there appears to be no quantitative justification for trying to improve DC's tax base by coupling the revitalization of DC's many disintegrating neighborhoods and schools with the influx of 100,000 poorly defined, but necessarily demographically proscribed, new residents. There are a score of key questions and several competitive options to be analyzed. Who will call for the needed dialogue?

Introduction:

In April, 2003, under the imprimatur of the Brookings Institution and its subsidiary, the Greater Washington Research Center, the respected Alice Rivlin and her cohorts have produced a sequel to the earlier report entitled "Envisioning a Future Washington", which also received an extensive NARPAC rejoinder. Similar to the earlier paper which sought "to stimulAte vigorous debate and discussion about the District's future and it's role in the Greater Washington Region", this one purports to provide the "framework for a broad- based dialogue about how best to enhance the future of Washington's neighborhoods". To our knowledge, there has been no open debate about the original vision (or about NARPAC's alternative). Nevertheless, this follow-on proceeds from the basis that the salvation of DC's "economic development and fiscal viability" will flow from a more densely populated city, with a population increase of over 100,000 (18%) by 2015, in which "about half of the new residents are in households with children, while the other half are singles, couples without children, and empty nesters."

This new paper builds on that former "vision", which, to the surprise of most knowledgeable observers. was adopted (seemingly as an afterthought) as a goal by the mayor in his second inaugural address. It essentially tries to demonstrate that it would not be impossible to squeeze another 100,000 people into DC over the next decade or so, primarily by "revitalizing Washington's neighborhoods". Having thus asserted the validity of the initial hypothesis, the paper presents a series of suggestions for "focusing development resources in target neighborhoods to increase the effectiveness of the revitalization effort". These are summarized as follows:

o the Mayor and City Council must commit to a phased targeting of their revitalization efforts, and use it to set budgetary priorities (consistent with the new city legislation to establish six to eight Neighborhood Concentrated Investment and Development (NCID) Zones, backed up by a Strategic Neighborhood Investment Program (SNIP);

o A single capital budget should govern both city agencies and schools (in part because this vision includes some 25,000 more kids to swell the rolls of DC public schools, under the assumption that a "higher proportion of middle-income parents would increase support for education and enhance the chances of improving school performance");

o Public, private, and non-profit enterprises must effectively partner (verb), (particularly to develop "anchor institutions" in the target neighborhoods);

o Schools must become an integral part of planning and implementation (suggesting that DC needs foundation support to "integrate planning and communication" between the two!);

o DC needs a citywide housing strategy that both protects low income households and seeks to attract middle-income residents (admitting "tough choices" to be sure to "preserve housing available to its poorest residents, protect low income residents against rapidly rising rents and property taxes, and provide more incentives to develop more mixed income neighborhoods").

Revitalizing Existing Neighborhoods

The report quite wisely recommends that the city consider various strategies in the hopes that together "their combined effects will jump start revitalization in these neighborhoods, attract additional private and non-profit resources, and create visible, self-sustaining improvement". Six particular strategies are highlighted, with interesting summaries of the tools available:

1. Generate Quality, Affordable Housing by using DC's Housing Act of 2002 which limits tax increases for long-time, low income homeowners; provides tax credits for home improvements in historic neighborhoods, institutes tax incentives to keep landlords from opting out of the Section 8 program; and revives the Housing Production Trust Fund to provide city funds to help rehabilitate affordable housing. The report also points to successes of the Hope VI programs, but notes that they risk reducing the supply of very low income housing (which may, in fact, kill them).

2. Eliminate Blight by converting as many as possible of the city's 2900-odd abandoned properties to respectable livable homes. The city's Home Again Initiative is designed to "bundle" 5 to 20 properties and permit selling them to for-profit or non-profit developers as long as they set aside 30% of the converted properties for almost 1000 low-income families. The chart to the left is reproduced (edited) from the GWRC report for the targeted neighborhoods of Columbia Heights (the subject of separate analysis by NARPAC) and Georgia Ave/Petworth. Note the very high number (well over 200) of vacant and abandoned houses in this area, a subject treated by a separate NARPAC photo essay.

3. Take Advantage of Transit by adopting transit-oriented development principles which encourage the creation of compact, mixed-use high-density neighborhoods within a half mile of bus and rail stops. No specific legislation is available, and the report notes strong resistance of existing residents to such upgrades. (NARPAC strongly supports this thrust.)

4. Enhance Neighborhood Commercial Centers to bring back local businesses (and the jobs associated with them). The city's "reSTORE DC" initiative has begun work on several disadvantaged neighborhoods. DC is also offering tax abatement and other deals to lure national retailers to the city.

5. Modernize and "Reenvision" Schools to attract middle income families, and hope that schools with more middle-income families will exert more pressures for school improvements (!). The report points to the current DCPS plans to reinvent 14 "transformation schools" directed towards generally the worst schools in the city. It also highlights the need to integrate school and neighborhood revitalization (another of NARPAC's favorite themes).

6. Partner with Anchor Institutions with the potential for providing substantial numbers of jobs, as well as visible commitment to the community's quality of live. The report notes the current efforts by Howard University and the Navy Yard, but quite rightly notes that there is room for many more.

Targeted Neighborhoods

The report goes on to describe in some detail twelve blighted communities that were chosen by the mayor as deserving candidates for revitalization, and are currently designated for the new Strategic Neighborhood Investment Program. They are the dark blue areas within the light blue areas (clusters) on the chart to the left. They are categorized as "emerging", "transitional", or "distressed". An aggregation of the 10 clusters in which these communities are located includes one-third of the city's households and more than 38% of its population, 76% black, 24% under 18 and 11% over 65, only 34% homeowners, and a median household income of only $35,700. This is not a demographic mix likely to attract households from DC's far more affluent, home-buying, family-oriented, gentrification-driven, professionally-skilled, car-heavy suburbs. In fact, using the GWRC marginal costs numbers, the city would lose $64M more than it gained if the newcomers matched the existing demography of those clusters.

At the other extreme, if the newcomers all match the demographics of Cluster 13 (the city's most upscale, and shown in green), with a median household income of $113,800 and only half as many kids, then the city would gain $272M annually, by GWRC cost assumptions.

Creating New Neighborhoods

The report then turns from the option of neighborhood revitalization, to the creation of six new neighborhoods currently in the planning stage (five are already described in separate sections of this web site). These new neighborhoods, without the scars and other irremovable traces of earlier blight, would seem more likely to attract new urban residents. They are listed below, and currently provide rationale for a total of 10,000 new housing units by 2015. It should be noted, however, that whereas the estimate for housing units is presented in terms of "as many as xxx", there is no mention whatsoever of how many business office workers or commercial employees are to be, or could be, generated at these sites as well.

o the Mount Vernon Triangle;
o St. Elizabeth's Hospital Grounds;
o Soldier and Airmen's Home (not yet available);
o Reservation 13 on the site of the old DC General Hospital;
o Southeast Federal Center and Navy Yard; and
o Southwest Waterfront along Maine Avenue.

Accommodating 100,000 Additional People

The 50-odd page report then devotes three paragraphs to summarizing the practicality of achieving its admittedly ambitious goal to bring in 100,000 more residents by the end of this decade (2010?), within a decade (2013?), or by 2015. It exceeds the goal by 10% and provides the following vague break down:

o population in "new neighborhoods" = 22,000
o population in targeted neighborhoods and near public transit = 30,000
o other projects and private sector production = 66,000

It then notes than the Office of Planning in March of this year released its projection that the DC population will have risen by 101,300 over its Census 2000 level of 572,100 by 2015. This number, not found by NARPAC anywhere in the public literature, turns out to be the "official" DC projection for use by the Council of Governments in regional growth planning. The report offers no substantiation for the 66,000 number from private sector production, simply noting that many of the estimates were prepared by an outside consulting firm.

The chart above presents a schematic of the projected growth pattern (heavy red), along with light dotted lines for the equivalent growth projected for the other "central" jurisdictions (Alexandria and Arlington) originally part of the DC square, and for the burgeoning "inner" jurisdictions of Fairfax, VA,. And Montgomery and Prince George's Counties, MD. In essence, this vision requires that DC grow in population at a slightly higher rate than its more prosperous neighboring suburbs for the next 25 years.

Also shown is the five-year projection from DC's Chief Financial Officer (in black) who is apparently unaware of the projections being made by the Office of Planning. The skimpy rationale provided in the letter of transmittal of this projection to the regional council of governments (COG) is summarized to the right of the chart. NARPAC has seldom seen a more transparent effort to "satisfy the boss" (the 2015 number matches the Rivlin-inspired mayoral objective), thus giving the GWRC report the dubious right to assert that the city confirms its objective. It appears to be a case of circular spin.

There are two other shortcomings in this strange projection. This "official" city estimate assumes there will be no further drop in average members per household, even though there is a real if modest decline in similar projections by every other COG jurisdiction. Second, DC has now become the only jurisdiction within COG providing a projection that residential population will grow as fast as employment opportunities. Hence, DC employment is being forecast to also grow 23% by 2025, although this number has not been changed from the previous projection which was, incidentally, developed not by DC but by the Census Bureau.

It is difficult to believe that those six "new neighborhoods" of mixed residential/commercial development will not raise the rate of growth of employment too. On the other hand, the CFO projects even smaller employment growth in the near years. For comparative purposes, the chart below compares the jobs vs residents growth rates for various metro area aggregations. NARPAC is partial to comparisons with Alexandria and Arlington because of their "in-town", metro- oriented development patterns. By that yardstick, DC's 25-year residential growth is more likely to be only about 14% (80,000 people), while jobs are more likely to grow by a whopping 38% (258,000)! Contrary to some analysts, that would do far more to stabilize DC's tax base (see below)


Developing a Housing Strategy

The final substantive chapter of this report turns back to the need for "articulating a comprehensive housing strategy, since housing is key to such growth and revitalization". It suggests the need to "adopt quantitative goals for the production of different types of market place and publicly assisted housing". It then goes on to stress the various considerations and opportunities for subsidized housing; housing for the homeless, elderly and those with special needs; preserving affordable housing; preventing gentrification; other forms of housing assistance, definitions of Section 8 rental assistance, and so forth. The focus is clearly on attracting the less well-heeled.

It also notes the difficulty of establishing proper housing assistance criteria when the Washington Area Median Income has been set at $84,800, substantially above DC's median income of $52,000 (NARPAC cannot substantiate either of those numbers from standard Census data). It stresses the fact that DC, with 12 percent of the region's population, has half the region's federally subsidized units. It notes that DC is now operating some 9000 public housing units, 11,000 subsidized units, and 5000 with federal housing vouchers. It reports that some 10,000 households are on the wait list for public housing, and another 15,000 are waiting for vouchers. To cap it off, it also notes that some 10,000 Section 8 housing units may soon drop off the HUD program as a result of the strong local housing market. Again the focus is on subsidized housing, not "middle-income" housing that would contribute to the desired tax base.

This chapter concludes by summarizing potential tools for alleviating this low-income housing shortage such as the Housing Production Trust Fund, Inclusionary Zoning (to "deconcentrate" affordable units into neighborhoods with new market-rate housing); employer assistance (such as the Howard University/Fannie Mae partnership to generate affordable housing); and prevention of displacement of low-income renters.

NARPAC COMMENTARY

This document starts out by stating that it is intended to provide a broad-based dialogue about how best to enhance the future of Washington's neighborhoods, claiming that DC can be made a better place to live and work for all the city's groups by revitalizing neighborhoods and boosting population at the same time. It also asserts that:

" Above all, the paper concludes that improving the District's economic and fiscal viability depends on attracting and retaining more residents especially middle income families with children." and coupling that directly with the conclusion that "focusing development resources in target neighborhoods will increase the effectiveness of revitalization efforts."

NARPAC has no significant objection to the report's suggestions for revitalizing the many neighborhoods that need revitalization, or for targeting certain neighborhoods and focusing development resources on them by the various methods and tools suggested.

However, the assumption, now apparently a foregone conclusion, that the development resources to both revitalize DC's many substandard neighborhoods (no small task) and improve the economic and fiscal viability can best be achieved by packing 75,000 low- and middle-income residents and their 25,000 kids into this city in a decade (or two decades for that matter) remains totally unproven and almost certainly specious. The basic issue is not whether the city can generate 40 to 60,000 new housing units over the next ten or fifteen years (even though it is highly unlikely) , but whether anything approaching that demographic mix would add anything at all to DC's marginal coffers. In fact, there is so little quantitative analysis behind these claims that it almost defies rational broad-based dialogue of any sort. Here are twenty unanswered questions, hopefully arranged in some logical groupings:

Defining the Real Fiscal Problem:

1. Why perpetuate the myth of a disastrous exodus of taxpayers?

The myth of a disastrous exodus of middle-income residents and their essential revenues dating back to the early seventies remains unsubstantiated by quantitative analysis. During most of that time Census and IRS statistics show that there was no significant reduction in total DC households, and no reduction at all in the number of, or revenues from, federal taxpayers. Surely the issue is not as simple as returning to some earlier golden age (!), but of finding a realistic solution to the real-world, and not uncommon, problem of developing and retaining American inner city fiscal solvency.

2. Just how much more income does the city need for development and viability?

No quantitative estimate is provide of how much additional annual city revenue (or reduced expenditure, for that matter) is needed to assure "economic development and fiscal viability", whatever that may mean. Other studies and reports have referred to a nominal number of $400M, but NARPAC believes that number was picked primarily because it is estimated that $400M might be raised by taxing commuters. That is four times as much as the nominal bonus gained from 100,000 new residents meeting GWRC's minimum demographic "rule of thumb", and may be impossible to achieve within the social framework being emphasized.

3. What will be the added costs to revitalize blighted communities?

No quantitative estimates are presented of the municipal fiscal resources required to revitalize as many as 60 or 70 failing neighborhoods to the extent needed to attract disgruntled suburban families. Picking numbers from the ceiling, NARPAC would expect such public costs to reach $25-50M each. The revenues needed to treat 12 neighborhoods in a decade simply cannot be raised by a linear increase of 100,000 "middle-income residents" over that decade. On this limited facet alone, NARPAC very much doubts that this proposal will do much for the nation's capital economic development and fiscal viability.

4. What will it cost to realistically improve as well and enlarge DCPS school enrollment?

There are no quantitative estimates of the resources required to "improve" DC's failing public school system, or to accommodate the additional 25,000 kids suggested. In fact, this is an unrealistic number since only two-thirds of kids under 18 are school-aged, and most certainly not all of those of school age would be sent by their middle-income parents to public schools, rather than charter schools, parochial schools, or other private schools. Accommodating some 15,000 kids could probably be handled within the present decaying and vastly under-utilized DCPS infrastructure , but not without a far greater facilities improvement budget than now projected . Furthermore, if this goal of up to 25,000 new kids in DC does not materialize, DC is likely to be left even longer with the oversized set of poorly maintained facilities which it has consistently refused to downsize.

The assumption that a large influx of new-to-DC parents would put their kids in DC's current public schools with confidence that their very presence would promptly improve the performance of those schools is not credible on its face. Rather it gives one early hint of an unspoken hidden agenda not related to DC's long-term fiscal viability.

5. In the earlier study from which this flows, why are the marginal costs of adding residents so low compared to the baseline?

There is no satisfactory explanation for the relatively optimistic costs of additional municipal services that these new urban immigrants will require. Rivlin's earlier work seems to allocate such costs by the individual rather than the household. This has the impact of lowering the costs of non-family households, and single-parent families. More troubling, the underlying marginal costs seem to represent an unrealistically small fraction of the per household costs now being experienced. To NARPAC, there appear to be no added costs, for instance, for increased public safety or public health for any of the 100,000 new residents, even though many of them are expected to require subsidized housing. It is difficult to fathom how this group contributes to a more solid tax base, and even more difficult to imagine ex-suburbanites settling for significantly lower quality city services than they have been accustomed to.

6. Won't 100,000 new residents require additional transportation infrastructure?

There is no apparent consideration of costs associated with the increasing transportation needs of the "normal" expected growth in commuters (which is seriously underestimated in the "Rivlin Vision"), or of the additional private vehicles certain to be brought into the city by 100,000 residents who can presumably afford them. Based on NARPAC's earlier analysis of trends in metro area car ownership and notional work on the need for more high-density parking in DC, we would guess that there would be an influx of between 60,000 and 70,000 cars and SUV's if the new arrivals come from the inner suburbs, or even from Alexandria and Arlington.

Selecting a Demographic Mix

7. Why should DC strive for a demographic mix just like its suburbs?

There seems to be a particular predilection in this report to steer DC's distinctive urban demography back towards that which is common in the wealthier suburbs. Intentional or not, NARPAC seriously doubts the wisdom of trying to make over the city in the image of the suburbs. In fact, there are good and sufficient reasons why some individuals and households live in the city while others do not. Trying to assure the city's economic development and fiscal viability by aping Fairfax, Montgomery, or even Pr. George's County would be an exercise in futility, given the extraordinary differences in the number of poverty and minority households. DC would do better to acknowledge its differences, and build upon them.

A far better source of comparisons would be to strive towards a demographic mix more like those of Arlington and Alexandria (once part of DC, and certainly considered urban jurisdictions). If DC could transfigure itself into a composite Arlington/Alexandria and retain exactly the same number of households (and housing units) it now has, it would have 10,500 less families with kids, 26,000 less households in poverty; 26,600 less kids and 29,000 less families headed by single females, but 29,000 more families headed by two adults, and a $19,000 higher median household income. Its fiscal viability would be assured!

The proposal that 25% of incoming residents should be kids (including non-school age) certainly does not represent current family trends in urban jurisdictions. While Pr. George's has over 26,000 kids/100,000 residents, and Fairfax and Montgomery just over 25,000, DC now has only 20,100, while Arlington and Alexandria (which have achieved fiscal viability with significantly lower taxes) each have roughly 16,500.

8. Why try to match suburban fractions of families and children in the inner city?

Despite the report's premise that the vast majority of the marginal costs of adding residents is the high cost of public education, and despite the current trend of declining DC public school enrollment (directly related to declining birth rates some years prior), there is no mention of any program to reduce the number of resident kids (or special ed kids) in DC using the public school system. If DC strove to achieve the kids/resident ratio now existing in the neighboring urban jurisdictions of Arlington and Alexandria, current costs would be reduced by $50M annually, and the costs of adding 100,000 new residents would be reduced by another $100M.

There are significant differences in the demographics between DC and each of its neighboring jurisdictions. The influx will be very different if it comes from Fairfax County or from Prince George's. The chart below shows some of these key differences, and indicates to the right hand side that each results in a very capacity to finance either the poverty households (top) or the kids they would bring with them. For instance, Fairfax has almost ten times the tax base per poverty household than DC for two basic reasons: it has a far higher median household income, and very much fewer households below the poverty line. For similar reasons, Arlington shows the best tax base per kid, over twice that if DC. This is because its median household income is relatively high, but its number of kids is far fewer than, say, Fairfax. Depending on the source of DC's new resident influx, then, the outcomes can be substantially different, and not necessarily predictable ahead of time. (Click on image to enlarge):

 

9. Why focus on "middle-income" residents who hardly pay their way?

There is no adequate substantiation for the (apparently preconceived) assertion that the only course to increased revenues is by adding residents, nor why they should all be some undefined "middle-income" as opposed, say, to a substantially smaller number of upper-income residents (a category never mentioned in this report). All prior NARPAC analysis would indicate the need to stress a disproportionately large number of high-income taxpayers to compensate for the disproportionately large share of households in poverty.

10. Where is the quantitative definition of what "middle-income" really means?

There are no quantitative measures provided for what revenues will be produced by the undefined "middle income residents" to be attracted back to urban life. As shown on the chart below, Median household incomes vary across the metro area by more than a factor of five between household segments, and by a factor of four within specific jurisdictions. By many implicit definitions of such middle-income earners, NARPAC seriously doubts they will "pay their share" in the face of DC's excessive levels of the families they must support near, at, or below the poverty level. For instance, DC has only 4.4 taxpaying households per household below 150% of the poverty level, while Alexandria and Arlington have 13.5.


11. How does the proposed demographic mix of the newcomers relate to reality?

There is insufficient detail in the proposed demographic "rule of thumb" (not even repeated in the new report) to allow realistic comparisons with the actual demography of DC or any of its nearby jurisdictions. By NARPAC's reckoning, it is way off the mark. The suggested "acceptable" mix is not well matched to the current mix (which, NARPAC can demonstrate, does not provide fiscal viability) in which only 25% of households have kids and two-thirds of those are one-parent families. This is reflected in the somewhat complicated chart below, which compares current parameters in various jurisdictions (bars) with the limits proposed by the GWRC report (lines, same color). (Click on image to enlarge):

12. Does the mix of new residents match the predictions of available housing?

The report devotes most of its considerable efforts to suggesting mechanisms for providing better housing for very low, to lower-middle income residents already in the city. However, embedded in the assumptions about where the 100,000 new residents will live, NARPAC guesses that probably less than 10,000 would move into targeted neighborhoods, and that they will be at the lower end of the amorphous middle-income range. The other 90,000 higher income newcomers are either going to be in new neighborhoods, transit-oriented developments, or in "other DC projects in the pipeline, and private section production" (about which nothing whatsoever is said).

The only suggestion for this predominant share of the anticipated housing solution is to make sure that as much as 20% of these housing units are reserved for households that cannot independently afford them. This is a much higher share than needed to reflect suburban household poverty and near-poverty rates. It would, in fact, present the risk of further increasing DC's already disproportionate share of households requiring housing subsidies.

The chart below illustrates, for instance, how the number of kids per household varies between the metro average and the DC specifics for the two basic variables. For instance, among two-adult families, both blacks and whites have fewer kids in the city that in the suburbs. On the other hand, among one-adult families (predominantly now-single moms), black families are far more likely to have more kids than whites both in DC and beyond. Predicting both needs and the financial means that accompany them will be unreliable at best.

13. Doesn't this proposed new mix have to be regulated to avoid ending up with negative revenues?

The tacit assumption that the arriving families can be limited so that "no more than 60% of new households have children, and that three person (i.e., one-parent) families comprise no more than half of all households with children" is dubious at best, and almost certainly unenforceable if it were correct. Actually, it appears to be incorrectly or incompletely stated, but the entire concept of regulating demographic immigration or controlling its subsequent evolution seems to NARPAC to be ill-conceived (or overlooked).

Like it or not, and 'unpolitic' as it may be, it is impossible to establish realistic fiscally-dictated demographic rules of thumb without also establishing quotas, or at least limits, on the incoming racial mix. There are very significant differences in: the earning power of Blacks and Whites ('middle-income 'is substantially different between the two); the fraction of two-parent families and married families; the level of parents' education and the number of kids they have; the number of single-parent families and the number of kids they have; or even the public component of their respective health and welfare requirements. The same rule of thumb will provide completely contradictory results if the incoming residents are two-thirds black or two-thirds white. Typically, if the 100,000 new arrivals are all white, city revenues will increase by almost $300M, but decrease almost $100M if they are all black. This is illustrated indirectly on the chart below (Click on image to enlarge):

It should also be noted from the chart above that there are also large disparities in financial characteristics between home owners and home renters. It may be necessary to strictly limit the number of rental units to be made available, even if this skews the result away from the proposed demographic balance.

14. Are the proponents for this approach confusing a social agenda with a fiscal agenda?

With all due respect for the competence and motivations of the proponents of this major initiative, it appears clear that the enthusiasm for a populist, diverse, all-welcoming, compassionate approach to attracting new residents is not consistent with the city's financial problems. As long as the city has a substantially disproportionate share of the region's poor, it cannot solve its budget problems by attracting a demographic mix that barely pays their own way, particularly by including additional public school kids who are almost as expensive to the city per capita as each adult welfare recipient. It seems incontrovertibly obvious to NARPAC that the tax base problem requires creative solutions which address rather than ignore where the majority of DC revenues are expended.

Alternative Approaches

15. Why not change DC's existing economic/demographic mix?

For presumably political reasons, there is no consideration given to changing the current demographic mix, either by improving the lot of current disadvantaged residents, or replacing some of the very poor households with high demands for city services with a few very rich households with little dependence on city services and no hang-ups about gentrification. As a possibly extreme illustration, replacing 10,000 poverty households with 10,000 childless households with a median income of $150,000 could change DC's fiscal balance by $550M per year. Those funds could be used to alleviate the illiteracy of 50,000 persons per year, spending $11,000 on each.

16. Why perpetuate current levels of poverty instead of alleviating it?

There appears to be a strong implicit bias towards the "benevolent perpetuation of poverty" by simply making the poor more comfortable with better housing. NARPAC prefers a far more pro- active local government effort to alleviate poverty and its sources, an approach that we might call the "benevolent pursuit of self-sufficiency". It would be applied primarily to the young poor with a significant potential for practical, vocational education and the ambition to pursue it for themselves and their still very young offspring. The key subject of functional illiteracy is not mentioned even in passing.

In fact, the report does not address any realistic opportunities to achieve fiscal viability by reducing the crushing municipal costs of its disproportionate share of very poor residents, young or old. The very dubious estimates of the marginal costs or revenues of 100,000 new residents appears at best to add $100-$200 million annually to DC's revenues, while the current annual costs of over 100,000 persons below, at. or near the poverty level current cost the city in excess of $1.5 billion;

17. Why ignore the benefits of additional education for DC's families in poverty?

More basic, however, is the absence of any acknowledged relationship between total parental education and their household income, or between parental education and the subsequent education level achieved by their offspring. In this regard, city funds spent to remediate the extraordinary levels of functional illiteracy among many current DC adults and parents would be more beneficial to their own economic lot and their kids' subsequent learning capacity than trying to accomplish the same end by force-feeding the public school system. There is a peculiar reticence to face the fact that those who fail to finish high school, or remain functionally literate are a continuing burden on city for another half century. The graph below shows the direct relationship between education level achieved and earning power for individuals of all races and both sexes throughout the Washington, DC metro area as collected by Census 2000. It should be remembered that household income for two adult breadwinners of equal education can essentially double household income. There is no significant difference between black and white, or male and female. Education leads directly to prosperity.


18. Why should DC provide subsidized housing for half the region's poor?

Furthermore, although the report correctly notes that DC, with 12% (or less of the population) has half of the region's federally-subsidized housing (and a demand for a great many more), and although the report suggests that neighborhood revitalization will benefit from the "deconcentration of poverty", there is no mention of the possibility of enlisting theregion (which also has perhaps 92% of the metro area's wealth) in the deconcentration of poverty. The word "region" appears only once in the 50-page report, and the lack of affordable/subsidized housing in the suburbs (where many of the jobs are) is not mentioned.

It is generally true that some fraction of the very poor quite understandably want to stick together. They prefer to remain in a familiar community where their ingrained "life support systems" may provide what little solace they can find. But this is by no means characteristic of many young families, generally led by working moms who are determined to improve their lot and move into the American economic system. These are typical of the many younger families who are currently slowly buying their way into DC's several HOPE VI housing projects

with the intent of becoming homeowners and eventually becoming financially independent. NARPAC suspects that these more ambitious families would be willing to move into an equivalent HOPE VI project in any of the neighboring jurisdictions where the job opportunities exceed those in DC. If the city's aim is really to "deconcentrate poverty", they should insist that COG "deconcentrate" HOPE VI housing throughout the metro area.

19. Are there other ways to help increase the availability of desirable housing?

The GWRC report faithfully itemizes all the various publicly-instigated programs to get rid of abandoned housing in low-income neighborhoods, attract low-income families, and underwrite first-time home buyers. None of these will significantly bolster DC's tax base. On the other hand, no suggestions are offered for easing the myriad of constraints which keep the private sector from achieving the full potential of more appealing housing accommodations. Enforcing higher-density zoning and restricting tax-free institutional uses near metro stations would be one significant change, but there is little indication from current experience that this will be achieved. Ridding the city of second-rate historical preservation gimmicks used to protect neighborhood backyards would be another. Relaxing outdated building height limitations (at least outside the original L'Enfant plan city limits) could substantially increase the availability of upper income households, mostly married and mostly without costly school-aged. kids.

It was noted under question 15 above, that 10,000 childless couples with a median household income of $150,000 could generate more than half a billion in net revenues all by themselves. By simply re-zoning the commercial and high-density residential acreage between Tenley Circle and Western Avenue along Wisconsin Ave, NW for twenty story buildings, 10,000 upscale 3,000 sqft apartments and condos could easily be built and sold within the next ten years. And they could incorporate the upscale stores of Lord & Taylor and Nieman Marcus in their ground floors. They would have access to Tenley Circle and Friendship Heights Metro stations, and would essentially match the developments already finished or currently in planning for the Maryland side of that intersection. There is no great mystery to solving DC's fiscal viability if one accepts the presence and willingness of wealthy people to provide it. The photo below looks north on Wisconsin Ave and indicates its partial state of development. The tallest building in the background is in Maryland.

20. Why not address the more lucrative revenues from tax-paying businesses?

There is no discussion whatsoever in either report of the very real (almost unavoidable) opportunities to raise substantial, virtually uncertainty-free revenues from tax-paying commercial businesses. In fact, commercial revenues are rising faster that residential revenues now, and are likely to continue to. There are on the order of 300 "wasted" acres of commercial/industrial zoning within the ten targetted clusters. Properly "bundled" or relocated by "zoning swaps", these acres should be able to generate $300-$600M annually.

Perhaps more to the point, each of the major new "neighborhoods" is expected to include high- density business and commercial development as well as residential, under the accepted DC mantra of "mixed use". At least 500 acres are involved altogether at these six sites, and even if 10,000 housing units with an average of 2000 sqft usable space do materialize, they will represent a "FAR" of less than 1.0, where as much as 3.5 would probably be acceptable. If an "FAR" of a little over 1.0 is devoted to private sector office workers, then these 500 acres can support 100,000 additional workers with an average of 250 sqft of office space each regardless of where they reside.

What most urban analysts seem to ignore here in DC is that such workers generate substantial revenues for the city even without a commuter tax of any sort. In 2003, DC expects to derive some $1.37 Billion in revenues from all aspects of tax-paying business and commerce (from property, income, sales, and licensing taxes). Pro-rated across a non-government workforce of some 430,000 workers, each worker (independent of where he lives) generates about $3000 in revenues for the city from about 250 sqft of office space, and uses no more than about $300 in city services. By comparison, a two-earner (white) middle income household can generate revenues of $16,000, but inflict total costs of city services of $8,000 with half a single kid in DCPS. The rub is that they may well occupy a 2000sqft flat. That household generates about $4 per sqft in net revenues to the city, while the typical office may generate $11 per sqft. In cramped urban areas, that is a very significant advantage for workers, regardless of where they live, or even how much they earn! See below:

$24,000. So how will a "broad-based dialogue" on these unanswered questions take place?

Since the release of this report, there has been no indication of a forthcoming public debate on the basic issue of whether fiscal viability derives from your typical urban residents, or whether the answers to each of the foregoing questions would lead the city in a different direction. NARPAC wants very much to participate, but who will lead?

Summary

Though it may be sociologically attractive, there appears to be no quantitative justification for trying to improve DC's tax base by coupling the revitalization of DC's many disintegrating neighborhoods and schools with the influx of 100,000 poorly defined, but necessarily demographically proscribed, new residents. There are a score of key questions and several competitive options to be analyzed. Who will call for GWRC's broad-based dialogue?

return to the top of the
page

Did you find this of interest?
Please give us your FEEDBACK


This page was updated on Jun 5, 2003



homeissuesstatusanalysesemail
| HOME PAGE | MAJOR ISSUES | CURRENT STATUS | RECENT ANALYSES | SITE MAP | EMAIL |

SEARCH THIS SITE

© copyright 2007 NARPAC, Inc. All rights reserved