DC STATISTICS ARE THOSE OF A CITY, NOT A STATE

Although the district is treated as a state in the gathering of statistics, those statistics do not reflect the trends in other states, as indicated by comparing DC to typical small states . They closely resemble the statistics for many American cities, or inner cities. A few demographic comparisons demonstrate this point. Both racial diversity and infant mortality bear little relationship to those of relatively comparable states; unemployment is higher, and so, oddly enough, is average personal income. A recent book entitled " DC By the Numbers " presents literally hundreds of statistics, virtually all of which show DC as an abnormality relative to US states--but not relative to typical cities and inner cities.

MACRO-ECONOMIC TRENDS
Unlike typical, more or less unified metropolitan areas , in which the relatively disadvantaged inner city comprises on average less than 25% of the MSA population, the division within the DC is closer to 50% relatively disadvantaged. This results in one well-off DC household rather than, say, three, contributing (figuratively) to the needs of one less fortunate household. The result is an understandable urge of the "haves" to abandon the "have nots"--or at least become part of a larger cohort of (even richer) suburbanites. This is clearly not just a problem in "white flight". Relatively affluent blacks have been leaving the District at a faster rate. The draining of the inner city has many complex causes, some qualitative and some quantitative. Urban factors tend to push taxpayers out and tax receivers in, while suburban factors attract well-off families but not welfare families. re-balancing these "magnetic forces" is critical not just in DC but nationwide.

The nation's capital will clearly remain a major regional drawing card. In the past decade, the GWMSA population grew three times faster (21%) than the selected state (SS) average, yet its inner city (DC) population declined twice as fast (-5%). See Metro Area Growth These inner/outer city imbalances are sometimes exacerbated by statistical weighting by population. Suburbs are typically 3-5 times the size of their inner cities, and their levels of wealth considerably higher. In the selected metro area (SMA) sample, the bigger the MSA, the poorer its core, and the richer its suburbs. Thus a city cost of $10 per (poorer) urban taxpayer (for, say, a new stadium) might be only $2-3 cost per richer and more numerous suburban taxpayer.

DC's Contributions to Its Metro Area

When the District of Columbia was first organized and surveying in 1791 -first as a "territory" and later as a county, it contained three separate cities (Georgetown, Alexandria, and the new capital Washington) with separate governments and a county government as well. The cities and county governments merged by 1874 but the "metropolitan area" was clearly smaller than its total original ten-mile square boundaries. By 1994, however, the district is a small part of its burgeoning metropolitan area, contributing:

o 2% of the land area
o 15% of the population
o 7% of the white population
o 38% of the black population
o 15% of all personal income
o 33% of all worker earnings
o 12% of retail sales
o 28% of the unemployed
o 23% of social security recipients
o 54% of dependent children
o 33% of infant deaths
o 14% of public school enrollment
o 1% of all white students
o 28% of violent and property crimes

DC'S SHARE OF METROPOLITAN AREA GROWTH

More serious is the fact that the trends are all in the wrong direction. Over the decade of the '80s, the District provided more of the jobs and retained less of the income, while its share of total population, employment, and business growth declined. See Regional Macro economic Trends and DC Shares of Inner Metro Growth . As former DC Council Chairman David Clarke frequently noted, our municipal city is not benefitting from the strong regional economic growth--even though our capital is surely its root cause. Under current conditions, there is no reason to expect DC revenues to increase, or even remain constant. In addition, DC's total debt of $6300 per capita is well over three times the area average ($1984) will surely keep growing as deficits continue.

The DC ranks just below the top ten US inner cities for minority population, but the per capita income of the DC is the highest in the nation for all segments of its population. This has led to the so-called "paradox" in the McKinsey report which seems to imply that the DC should be able to make its own way. The answer, of course, is that no inner city in the US is financially self-sustaining regardless of demographics , and the District of Columbia would be no exception--even if waste and inefficiency vanished. In fact, it is far worse off by not having above it a cooperative metropolitan area and a seasoned state government more representative of our national norms in governance. Arguing over Congressional infringements on home rule, or continuing to talk wistfully about DC statehood, is little more than bickering over who is granted authority to select the band music on the Titanic.

The matter of the soundness of DC's economy relative to that if its immediate surrounds is treated in greater detail in the DC Agenda Final Report , and a GUPPI Backgrounder .

Neighboring States Compete For Marriott Headquarters :In late 1998, the Marriott Corporation announced that it had outgrown in 3000-worker headquarters in suburban Bethesda, Maryland and would look for a new site in either Maryland or Virginia. The resulting bidding war by the two states is an example of the highly competitive quest for increasing the job base, even though both states have record low unemployment rates. The result is that the states are essentially giving away their taxing powers in the near term. Maryland has most recently (Feb, 1999) offered $50 million in tax and other benefits -- about $12,000 for every expected full time employee, and Marriott is still not satisfied NARPAC finds this a dubious practice: whether one looks at is as bribery by governments or extortion by the firms. It seems particularly inappropriate in view of the recently uncovered activities of The Olympics Committee and supposedly decent cities like Salt Lake City.

In this case, it is even more ironic, as Councilmember Evans has pointed out: the Marriotts began their highly successful business in DC, and lived for many years in Northwest DC, but are not even considering re-locating within the District. It is interesting that business ethics now encourage extortion rather than returning something to the community. In fairness, however, it should be noted that Marriott does maintain a training school in DC to provide job skills for the unemployed. Nevertheless, it is significant that DC is not even in the running for this substantial economic boost from one of the major firms in this high priority DC "business cluster".

UPDATING IRS STATISTICS OF INCOME TO 1999

NARPAC has not updated its analysis of IRS's Statistics of Income derived from federal income tax returns since the availability of 1995 tax returns Four more years are now available. These data provide interesting insights into the distribution of households, their adjusted gross and taxable incomes and exemptions. Data in more recent years also indicate the number of joint returns.

1999 Federal Tax Returns for DC, MD, VA, and the US

NARPAC consolidates the data into four income categories: $0 to 20K called "No Income" (NARPAC designation, not IRS); $20 to $50K as "Low Income"; $50-100K as "Middle Income" (perhaps a misnomer); and everything over $100K as "High Income". Four sets of identically scaled graphics present the summary data for DC, the US in toto, and the states of Maryland and Virginia. Maryland and Virginia are quite similar, but DC is quite distinctive, and even further from the US total norm.

The upper charts of each pair show the distribution of tax filers, total exemptions, and non-filer exemptions (primarily kids and the blind) between each of the four aggregate income categories delineated above. Here is our interpretation of the results:

o the number of filers (red bars) from DC in the two lower income categories is significantly higher than for the US norm, which is higher than for DC's neighboring states;

o the total number of exemptions (green bars) is far higher in the lower income categories as well;

o and the total number of exemptions for kids or disabled (blue bars) is higher still leaving only about 20% in the two higher income categories, vs about 42% for the US as a whole, and over 50% for Maryland and Virginia.

The lower charts of each set repeats the number of filers (red bars), and compares them to the shares of total Adjusted Gross Income (AGI) green bars), taxable income (TI--after deductions factored in) (blue bars), and the share of the total federal taxes paid (yellow bars). These show how much income taxes fall on the wealthiest 10-15% of taxpayers.

Of particular interest is the fact that the lower two income categories provide at most 15% of total revenues (to the federal government). The biggest discrepancy is that in DC, the "middle income" taxpayers provide only about 17%, whereas the two states and US norm are 22 to 24%. This leaves DC's wealthy paying some 70% of all DC's federal income taxes, compared to 60% elsewhere.

Estimating DC Tax Revenues
Based on the data available from the Statistics of Income, and from the DC FY02 budget proposal, it is possible to estimate the DC revenues derived from a given Household Adjusted Gross Income, in a two-step process. First AGI is converted to Taxable Income, (left chart below) which is considerably lower (particularly at the lower income levels). Then Taxable Income is converted into revenues (right chart below) using the DC income tax rates, plus an average sales tax rate (3.2%) and an average property tax return (2.2%) derived by comparing total sales and property taxes to the total Taxable Income for the District. For instance, a DC household providing $15,000 in local revenues requires a Household AGI of perhaps $140,000, while returning $5000 implies an AGI of almost $60,000. Such estimates can provide independent checks of assumptions made in studies such as the mid-2001 Rivlin Vision for DC's future.

Historical Data for DC The next chart in this series provides (somewhat sketchily) available data on the total number of returns, exemptions, and total AGI (divided by ten to balance scales) from 1950 through 1999. The primary question of interest to NARPAC is whether or not the "mass exodus" of middle class taxpayers, both black and white, between 1970 and 2000 is supported by these data. In fact, it seems clear that the decline in taxpayer returns was modest at best (dark blue line), and the total AGI continued to climb until about 1990 after which it leveled off for 5-7 years and then began another steep climb (green line).

The question is whether this leveling off in the first half of the '90s is peculiar to DC, or whether it reflects as well for the US as a whole. To explore this, the US total AGI (divided by 3000 for scaling) is also shown. This indicates that the US economy (and tax policies?) are responsible for some but by no means all of the temporary leveling off. The rest is due to a modest decline in DC taxpayers compared to a continuing climb in total US taxpayers. (See explanatory chart below). In any event, DC's AGI per tax return stays well above the national average, but that remains at the borderline of the "low income" and "middle Income" categories of DC taxpayers. It was relatively low income taxpayers that left.

DC POPULATION TRENDS

There has been a great deal of interest in DC's declining population. The assertion is made that DC is losing its "middle class tax base" due to high taxes, and that heroic measures (such as federal income tax relief) are needed to reverse this trend. There does indeed seem to be a significant migration out of the city, but the reasons for it are not clear, and the downturn in population is not equally matched by a downturn in taxpayers or revenues.

These empty row houses stand along Florida Avenue two blocks from Rhode Island Avenue--a mile from the Capitol.

DC Population Trends by Age and Households

The three pop-up charts indicate population trends since 1930, when the nation's capital first approached half a million residents. As shown on Figure 1 , the build-up for World War II was very substantial, almost doubling the city's population. The trend has been downwards ever since with slight "bumps" due to the Korean War (early 1950), the onset of the "Great Society" programs (late '60's) and the hiring of large numbers of new federal workers, with emphasis on minorities; and then the "Reagan build-up" (mid-'80's) in federal spending which again enlarged the federal payroll.

The changing balance of age groups is informative: there was a large, but temporary increase in the number of children--with enrollment in DC public schools reaching almost 150,000 in the late '60's. It is only half that now, in a school system virtually the same size!. Second the number of residents over 65 has continued to increase despite the drop in total population, presumably due to the favorable DC climate for welfare and public housing. The result, however, is that the number of working-age adults (20-65 year olds) has changed very little since 1960.

The smaller drop in adults has actually been accompanied by a slight increase in the number of "households" which appears to have peaked in the late 1980's. This indicates that family size has been decreasing, and the number of non-family individuals has declined significantly.

DC Population Trends by Race and Children

Figure 2 shows the dramatic change in racial mix in the city, indicating far larger demographic turbulence than just the post-war decline. Whites fled the city in droves in the '50's and '60's, in large measure (according the Junior League's "illustrated History of Washington") due to DC school integration in the early '50's. At the same time, racial unrest and government job opportunities attracted many blacks to their nation's capital. It is interesting, however, that there has been a larger drop-off in black residents than white residents since the '70's.
This chart also shows the total population of children (under 20 years old). It is clear that the build-up, and the subsequent drop-off was largely in the black community. The decline has been in some measure due to family planning, but also due, almost without question, to the declining conditions in DC public schools compared to the opportunities in the suburbs. NARPAC, Inc.'s analysis strongly suggests that the current "out migration" is of young blacks starting their families and looking for better schools and safer and more modern housing.

DC Population Trends: by Jobs and Taxpayers

The "economic demography" of the city shown on Figure 3 again indicates that the drop-off in population has not (until very recently), been accompanied by a drop-off in wage earners. Note that the number of DC residents paying both federal and DC income taxes declined very little between 1970 and 1990, and that the DC work force was relatively "stable" during that period as well. On the other side of that coin, however, note that DC's job-holders did not reflect the overall trend towards increased jobs in the DC from 1960 to 1990--as many more workers chose to commute from the burgeoning suburbs. More recently, however, the decline in residents seems to almost exactly match the reduction in available jobs in the city, under the new era of federal austerity, coupled with "de-federalizing" many government operations, and returning them to the states. While in the late '90s it appeared likely to many that the Washington area's inner city would be down to a population of 500,000 again by the year 2000, the results of Census 2000, showed that the drop had been much smaller only 25,000 rather than the 100,000 predicted by knowledgeable demographers..

That the drop in DC population is related to the cutback in government jobs should come as no surprise. The 1990 Census indicated that in Wards 7 and 8 ( over 90% black), 45% of employerd adults worked for the federal or city government. In the past seven yeats, the population in each of those wards has dropped almost 20%. Only one-third of the adult population in those wards had attended college for any period of time, making them more vulnerable to government downsizing. Those wards also have the highest unemployment rates--well over 10%.

DC's Middle and Upper Income Taxpayers
Middle income residents have not begun to leave in startling numbers. The IRS operates a huge national computer program to track "migrating" federal taxpayers, based on where they file their tax returns from one year to the next. Net migration out of DC so far in the '90s (5100 less tax returns per year) has been above the '80s rate, but still somewhat below the '70s rate. 62% of the recent loss is in households below age 35. The average income of those exiting returns (1.7 exemptions) is $33,500, which seems too low for the mature middle class. Only 15% of the loss is for those over 45. But almost 80% of the 150,000 drop in population from 1970 to 1990 was in children under 20 years old --at no loss to the tax base! DC now has 10% fewer "exemptions per taxpayer" than its neighboring states or the US norm. Furthermore, the number of federal and DC tax returns from DC residents with adjusted gross incomes above $50,000 has continued to rise each year, and the share of total taxes paid by this cohort has continued to rise quite substantially. Clearly, the DC tax base is poorly related to DC population figures, and to IRS migration numbers taken out of context. But even a "stable" inner city tax base cannot keep up with a fast-growing (3.7% p.a.) suburban tax base. (See prior section on 1999 statistics of income.)

A New Estimate of Demographic Trends

A recent study by the Greater Washington Research Center for the DC Tax Reform Committee confirms the general thesis outlined above, but suggests a slower drop in the black share of DC's population, accompanied by a somewhat higher rate of decline in households. There also appears to have been a larger drop in population in Wards 1 and 2 (Ward 3 is still growing) than projected by the earlier statistics.

Household size apparently continues to drop (from 2.27 to 2.16) but this small change in the totals masks the fact that the average departing household in the past six years contained 3.76 persons, of which only 1.01 are children--implying that one or more older relatives were part of these households. This may in part account for the unexpected 18% drop in senior citizens. This also hints that the demography of DC's registered voters is also changing significantly.

It should also be noted that this GWRC analysis estimates a 15% reduction in children of all ages, and almost assures that there has been a more substantial reduction in school-age population than has been admitted by school authorities (who have just released an "official count" of the current student population at 77,100--down 1500 from last year, but only down 3000 since 1990). There are some inconsistencies in this part of the analysis, but they should not change this conclusion.

Only one-third of those leaving are of the best earning age (35-64 yrs old). and the total household income of almost all of those leaving was below $15,000. This further confirms the NARPAC, Inc. contention that the taxpayer base has not been dropping even though the population has declined 10%. In fact, the average household income is clearly increasing. This position is further confirmed by the fact that total DC tax revenues in 1996 were up 9% from 1990, including a 6% increase in sales tax receipts, an 8% increase individual income tax receipts and a 13% increase in business tax receipts--according to the most recent official DC audit. In short, DC seems to be losing more "tax-receivers" than tax- payers, and primarily taxpayers at the low end of the income spectrum.

Other Clues to Demographic Changes

The 1994-1996 version of DC INDICES also provides some indications of the non- migratory demographic changes underway. Between 1991 and 1995, for instance, live births within DC went down almost 24%, and abortions went down 29%. The number of births to unwed mothers is also down slightly from its 1993 peak of 73%. Over the same period, however, deaths in DC declined only 2% (down 11% for whites, but up 1% for non-whites). Amazingly enough, we now find that in hundreds of cases, the cause of death was never determined! In any case, the ratio of births to deaths declined substantially from 1.62 in 1991 to 1.26 in 1995.

Medicaid payments rose 70% between 1991 and 1995 to $796M, and the total number of recipients rose over 38% to 138,400. However, the number of recipients in the "aged" category dropped 30%. The increase (due in part to more comprehensive coverage) was for adults with dependent children, and those children. Nevertheless, the number of paid hospital days dropped a remarkable 46.5% in four years, while paid nursing days fell 20%.

These changes show up in DC Hospital statistics as well: total "patient days" dropped a full 33% in four years, as did the average number of hospital beds in use. Disappointingly, however, DC Hospital costs dropped only 2.2% to $141M. All of these statistics would appear to indicate a significant drop-off in the older black population--particularly males who have a depressingly low life expectancy (10 years below the national average). In addition, the number of young children adding to the population is also dropping off, even though more of the current minor population is eligible for welfare payments. It is also clear that medical costs have continued to rise disproportionately, offsetting the expected cost benefits of a healthier, more middle-aged population.

In December, 1998, the Urban Institute prepared three background reports in support of the Strategic Economic Development Plan commissioned by the DC Control Board. One entitled "Growing Washington's Population discusses trends and prospects. The individual findings and conclusions are interesting and contribute more new information to DC's changing demography:

1. While most US metro areas have grown, many central city populations have declined: 25% in DC, compared to 57% in Detroit and 46% in Cleveland--whose "industry" was not government;

2. The image of continuing "white flight" was not an accurate reflection of reality in DC in the '80's: the city's net loss was only in black households;

3. The types of households growing most rapidly throughout the region are those that traditionally favor central city living, primarily married or unmarried households with few children;

4. The accelerated losses in households in the 1990's was mainly among blacks, with some whites being replaced (not displaced) by Hispanics;

5. The accelerated net losses in the 1990's were almost entirely due to fewer households moving in (particularly from outside the region--possibly due to declining government jobs), not more households moving out!

[It is becoming harder and harder to support the earlier Chicken Little claims that a mass exodus was being driven by faulty services. It may be more astounding that it wasn't!]

6. The period of accelerated losses may well be over as indicated by a strong pick- up in DC (90%) and regional (45%) house sales in the past two years.

[Clearly, however, these are not to buyers of limited means. The median purchase price in DC was $168,000, (as reported in NARPAC's daily headlines ), only 13% below the median prices in affluent Fairfax, VA and Montgomery, MD Counties. Although some 38,000 DC homes changed hands, relatively few new units were built. Hence, while DC leased an additional 3 million square feet of office space--enough for 13,000 additional workers, most of that increase will have to be commuters unless/until DC builds substantially more middle/upper class housing units.]

7. The differing needs and interests of incoming home buyers could form the basis for more effective marketing and improvement initiatives to attract and retain new residents. Recent surveys quote jobs and city convenience as the leading reasons for arriving non-blacks; family and friends for incoming blacks.

[If the net influx is substantially "whiter", richer, and with fewer kids, "natural gentrification" is on the way.]

8. City renters transforming themselves into city homeowners appears to be a major trend, previously unreported by NARPAC. A recent survey of current DC home buyers indicated that 68% were already DC residents, predominantly renters.

[This adds strength to NARPAC's conviction that DC's rent controls should be phased out.]

NARPAC remains troubled by these migration statistics based primarily on reports of the changed addresses of tax filers. The following example will point up this problem. Let's say a married government worker moves to DC in the '60s, rents a house and produces four kids. Three grow up, get jobs, marry, start a family, and move out the early '90s. The fourth gets a job, has kids and buys a house in the district. IRS computers will not catch the four new taxpayers (since they never filed elsewhere), but will record the three who leave as a net loss. DC has gained a young taxpaying household, while IRS (and Chicken Little) report the loss of three.

On a broader note, the study tries to address the basic question often raised by NARPAC, Inc.: who should the city try to attract to replace those leaving? The answer, in NARPAC's considered view, amounts to a dubious committee platitude:

" The general consensus of the participants....seemed to be that the city should try to attract and retain a broad variety of households (diversity in household types, races, income levels). Middle income families should certainly be an important target, but the city gains by attracting many other types of residents. As one example, the younger elderly ("empty nesters") represents the largest growing households type in the country at this point. They have economic assets, and they rank high among those who find urban living the most attractive. Participants emphasized that the possibility of "gentrification" (higher income groups displacing the poor) still exists and needs to be guarded against. " (emphasis added by NARPAC).

In a city whose demography is as far from the national norm as it is, and which is known to suffer from a shortage of middle class taxpayers, concern about "gentrification" seem totally out of place. Moreover, the notion that that word implies the rich forcing out the poor appears to be overreaching. Surely if poor kids grow up, get richer and leave the depressing public housing tracts, the city fathers are not obliged to find new poor to occupy them. If DC is eventually to become an American model, a substantial number of dependent poor are going to have to be replaced (not displaced) by residents who pay their way.

Regional Influx of Latinos Noted

A January analysis in the Washington Post (1/23/00) reports on the rapid growth of Latinos in the DC metro area. Over the past 30 years, their numbers have swelled more than fivefold from 70,000 to 355,000. While the immigrants themselves have tended to fall into the lower income categories (56% of first generation Latinos in the area are in households making less than $30,000 per year), it is clear that as a group they have proven their ability to adapt and move quite quickly up the economic ladder. Second generation DC Latinos (i.e., born in the US) have overwhelming learned English and 53% have brought their household income up above $50,000--just about the national average.

THE DIFFERENCE BETWEEN MEAN AND MEDIAN INCOME

Some NARPAC readers may be struggling through life without a highly mathematical bent--or interest, for that matter. Nevertheless, it is important to know both how much and how little can be derived from the use of these terms. Hence this short and hopefully non-offensive tutorial with a large meaning. The mean value for a set is its simple arithmetic average: add up the values and divide by the number in the set. The median may tell a very different story. Lne the set up by increasing (or decreasing) value (height, weight, cost, whatever). The one in the middle is the median, with half of the set above it and half below.

To take an absurdly simple example, take a family of five in which Dad is 74" tall, Mom is 69", their four-year old daughter is 38" tall and the one-year old twins are each 22" tall. The mean heighth of the family is 45", the median heighth is 38" (the daughter)--indicating there are more shorter people than taller people. But neither value, or both of them for that matter, would provide a clue as to how to buy clothes for them.

To take a more serious example, consider a group of city households divided into nine equal sized groups, ranked by their adjusted gross income AGI from lowest to highest. Two samples are shown below. In Case A, the household incomes vary from 20 in the lowest group to 90 in the highest group graduated as indicated. Their mean AGI is 38 and their median is 20% lower, 30. Case B presents greater extremes: the income of the lowest two cohorts is 0, and of the highest single cohort, 120. The distribution in between is picked so that their mean AGI is again 38, and their median is again 30. But the implications are very different for city planners.

As explained in detail elsewhere, the total expenditures required for city services are usually weighted heavily towards the poor, and the total revenues generated to pay the bills are usually weighted heavily towards the higher incomes. (See statistics of income. Using hypothetical correlations of service costs and revenues to household income, the significant differences in the sample city's ability to pay its bills becomes evident. In Case A service costs are projected to reach $360, and revenues $358 for essentially a balance. In Case B with the same number of total households and with the same mean and median incomes, services costs are projected to rise over 20% to $430, and revenues to reach only $411 for a $19 deficit. The differences in magnitude and balance are significant, and the circumstances that caused a shift from Case A to Case B are essentially uncontrollable. This is explored in greater detail under household productivity.

The material in this section provides important graphic highlights from Census 2000. It has been archived separately to shorten loading time, and to make possible reprints of this section alone.

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METRO AREA COMPARISONS FROM CENSUS 2000

By early 2002, Census data became available for all the counties in the DC metro area. This first pair of charts shows the distribution of population and those in poverty between DC and its Maryland suburbs (left bars) and Virginia suburbs (right bars). Montgomery and Prince George's Counties in Maryland, and Fairfax County in Virginia drive the inner suburbs, while Alexandria and Arlington tend to be borderline urban jurisdictions. Background bars present the relative totals for each state. Maryland remains the larger contributor to the metro area's population, rich and poor, than Virginia. More disturbing, of course, is that DC now represents only 11.8% of the population, but is home to 28.7% of the region's poor.

Virginians are somewhat richer per capita than Marylanders, so that their total shares of regional household income are closer to the same, and in the value of their homes sold in 2001, Virginia pulls 20% ahead. Note however, that DC with 11.8% of the population has only 8.4% of the household income, and 2.9% of the total value of housing sold. The latter is a direct result of DC's relatively high number of poor residents and small number home owners.

DC is home to 26.3% of the region's black population, surpassed only by Prince George's County, MD. Virginia, on the other hand, has only a quarter as many as Maryland. On the other hand, DC has a little more than its share of college graduates (12.8%) whereas Virginia still lags somewhat behind Maryland. Note the similarity in pattern for the individual counties between household income, housing sales, and academic success. This correlates well with NARPAC's claim, developed under education, poverty, and ignorance, that total householder education level is the prime determinant for household income.

According to national comparisons of government employees DC has at least 50% more personnel in its police department than other major cities with similar minority populations. Despite literally thousands of other federal police forces in the nation's capital (Park Police, GSA Police; Capital Police, etc.) DC's Metropolitan Police Department is extraordinarily oversized, according to the latest numbers available. With 11.8% of the population it sustains 35.3% of the region's total uniformed and civilian police personnel, even though it suffers only 21.8% of the total major crimes (not just homicides). The number seems high even relative to its high share of households in poverty (28.7%). On the basis of purely statistical comparisons, DC's police force has between 1000 and 2000 too many employees. Only if the benchmark parameter is police per poor person can DC's police force level be justified relative to the rest of the metro area.

COMPARISONS OF METRO AREA KIDS FROM CENSUS 2000

This section continues the Census 2000 comparisons from the prior section but focuses particularly on differences pertinent to the younger generation within the metro area.

These first two charts above show the gross distribution of more than 1.2 million kids across the metro area. some 670,000 are Marylanders, 430,000 Virginians, and about 110,000 live in DC. While DC has 11.8% of the total metro area population, it has only 9.5% of the kids. To NARPAC, this indicates a "natural selection" towards the suburbs for young families to raise their kids, a trend no doubt enhanced by the differences in the public schools. On the other hand, the right-hand chart above indicates that DC has 14.7% of all metro area kids with disabilities, suggesting that such disabilities are yet another consequence of poverty (DC has 28.7% of the area's population below the poverty line).

The causes of the imbalance in poverty are shown on these two charts which single out the distribution of minority adults (left side) and minority kids (right side). Note here that Maryland has almost double the number the minorities as Virginia, but again that DC has more than its proportionate share of both: almost 20% of the minority adults, and over 16% of the minority kids. Note here also that the minorities in the inner suburbs are proportionately greater than in the outer suburbs.

Not surprisingly, the distribution of public school kids roughly matches their corresponding totals. However, in both Montgomery and Fairfax Counties, and in DC itself, a somewhat larger number choose a private school route. A far greater difference is indicated in the right hand chart, however, in the distribution of Asian kids (famous for raising school test scores, in part due to their older, better educated parents). DC has attracted only 4.4% of the area's Asian youngsters, whose parents evidently prefer the area's two richest counties (Montgomery and Fairfax).

From this last set of charts, it is also clear that DC kids, despite their relatively poor test scores, are served by more than their share of teachers (13.8%) and school houses (14.5%). This is directly related to the much smaller than typical size of DC schools compared to both the immediate suburbs and major urban school districts across the country.

In short, then, if today's 115,000 DC kids matched the overall norms for the entire metro area, 4000 less of them would be handicapped, almost 42,000 fewer of them would be minorities, 17,600 more would be Asian, and they would learn from 2100 less teachers in 56 fewer schools. In all probability, they would get a better education, and better test scores, and cost the city considerably less.

COMPARISON OF METRO AREA CAR OWNERSHIP FROM CENSUS 2000

Car ownership continues to be a fundamental element of the American Dream. The left chart below indicates the number of households that own cars in each of the metro area jurisdictions, and how many each owns. Only DC has a substantial fraction of car-less households (37%). In fact, DC residents account for 46% of all the car-less households in the region. The right chart indicates that the majority of cars are owned by people who also own their homes, and that, except in DC, the vast majority of car owners are white.

The left chart below indicates how many cars, on average, are owned by each household that owns cars, showing that the average drops below two cars per household in the inner suburbs, and below 1.5 in DC itself. It is of some surprise to NARPAC that this fraction has not changed significantly since 1990. The right hand chart shows that the area has gained almost 400,000 cars over the past ten years, but this is consistent with adding some 200,000 households with cars. Only DC has shown a slight drop in total cars (down 6100 to 219,100), and this is consistent with its drop in population.

This next chart, to the left, provided the car numerics for the entire region, and indicates what share of each of those totals accrues to DC residents. As is noted, DC has only 7% of the region's cars: on the one hand it has 9.5% of all households with cars, but on the other, 46% of those without cars. It has more than its share of single-car owners, and substantially fewer multi-car owners.

By NARPAC analysis, however, the lower number of cars seems to be primarily the result of not being able to afford them. This is shown on the chart below which (randomly) plots some 60 of DC's individual census tracts, comparing numbers of households in poverty with households without cars. Although there is, as would be expected, considerable scatter, there is a clear trend that most people who can afford cars buy them, regardless of where they live. In fact, it may help define where they prefer to live!

Finally, there does appear to be some secondary trend in central city car ownership related to the size of the metro area. This chart to the right shows the trend in car-less households both within the central city and in the suburbs of American metro areas of different sizes. The larger the metro area, the higher the percentage of car-less homes in the central city. DC, however, is outside the norm even for larger American metro areas, and probably because of its higher than average poverty rate.

COMPARISON OF METRO AREA COMMUTERS FROM CENSUS 2000

Consistent with the analysis of car ownership above, it is clear that most residents in this metro area still commute by car (over 81%), and most of those drive alone (84%). At the left below are shown the proportions of residents who work in the same county they live in, and those who work elsewhere, either out-of-county, or out-of-state. It may be somewhat surprising that over half cross a county line, and over a quarter cross a state line. With this type of diversity, it is not surprising that one of the family cars is generally involved. The right hand chart below shows the various modes of commuter transportation, and also shows the rather unique break-out for DC itself, where commuting by car falls to but half of the total trips.

Some of the pertinent data buried in the tables above are summarized on the table to the right. In short, DC has only 10% of the region's resident workers. A larger than average share works within its own jurisdiction (DC has only one 'county'), but a typical number cross state lines. Far fewer drive to work, and far more, percentage-wise, use the Metro system. It is of minor interest to note that only some 7700 workers claim to bike to their jobs, and almost 40% of those live in DC. Ten times as many walk to work, suggesting that sidewalks should be higher priority than bike trails, at least from the standpoint of commuting!

The unrecompensed costs of DC's large number of daily commuters is treated in a separate section of NARPAC's chapter on DC's dubious 'structural imbalance'.

TOURISTS and VISITORS STILL FLOCK TO DC

Despite the changed national mood since 9/11, tourists and other visitors still flock to the American capital city from across the nation and across the world. Recently published statistics for 2002 provide interesting insights into who comes, how long they stay, and how they compare to the much maligned daily commuters from the suburbs. As shown on the upper chart to the left, DC is invaded annually by some 83 million "person-days" of daily commuters who work in DC (green bar). However, they are nearly matched by some 72 million "person-days" of tourists and other visitors, the large majority of whom come for several days (red).

It is also of some interest, though little surprise, that tourists come to Washington, DC, for somewhat different reasons than they visit other US places. Tourists flock in for historic sites and museums, but do not come here for sports and outdoor life (!). On the other hand, perhaps DC should take note that relatively few tourists come to DC to shop. DC would profit from continuing its current efforts to make the nation's capital city a shoppers' paradise in addition to its other attractions.

REVENUES FROM RESIDENTS

Any red-blooded American tax collector flying over the Washington metro area would salivate uncontrollably when looking down on the million-plus rooftops of the area's generally wealthy residents, with their multi-car garages and aquamarine swimming pools. On closer inspection, however, it would become obvious that many of the residents of the inner city do not share that luxury. In fact, the "revenues per rooftop" are significantly different within and outside DC, and between its Southeast and Northwest halves. Although the median household income for the four neighboring states and DC average out very close to the US norm (see chart to left), DC and West Virginia pull the average down, while Maryland, Virginia and Delaware are well above the US average. There is in general far less wealth inside DC homes.

The distribution of wealth within DC also differs from the US average and from the State of Maryland as shown on the chart to the right, comparing tax returns and tax revenues in the three basic categories of everything below $50,000, everything above $100,000, and everything in between the two limits. As has been described in more detail elsewhere, DC has more poor taxpayers than "normal", less rich taxpayers than Maryland, and considerably fewer taxpayers "in the middle". Because the poor are poorer and the rich are richer, the revenues from the lowest category are about the same, while DC makes up for what it lacks in the middle with wealthier taxpayers at the top

The comparison in the chart directly above reflected federal tax returns and federal revenues. Though the local taxpayers number about the same, the less progressive local taxes change the distribution of state and local revenues. Looking just at DC now, the total revenues from DC residents is estimated by pegging both local sales taxes and local real estate taxes to the Taxable Income shown on federal returns, taxed at the current DC rates. Of the $1.5 billion raised in DC in 1999 from these three categories, it is clear that the lion's share still comes from those with incomes over $200,000; more in fact, than comes from all taxpayers between $50K and $200K. This leads directly to NARPAC's skepticism that DC can swell its coffers much by packing more "middle income" taxpayers into the city, particularly if they bring with them kids destined for public school education. Families are by no means necessarily net revenue producers.

This last chart more graphically portrays the revenue burden placed on some 8,200 households at the top of DC's food chain. In this chart, the width of the bar symbolizes the number of people in each income category, and the height of the bar represents the taxes collected from each. Here the area of each bar depicts the total revenues derived from that taxpayer bracket. The actual numbers of taxpayers in each bracket is printed at the bottom of the chart in red. This further accentuates the lack of realism in hoping that a few thousand more middle income residents can solve DC's revenue problems. If the number of poor requiring extensive government services cannot be lowered, then DC sorely needs more millionaires!

THE 1999 METRO AREA HOUSING SURVEY

Under the guise of a housing survey, this Census data presents a great deal of useful comparative demographic and socioeconomic data for the DC metro area. It has been archived to reduce the loading delays, and to make possible separate printing of this section.

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RISING REAL ESTATE VALUES

The growth in the real estate market in 2000 over the prior year is quite significant throughout all the "inner metro area" counties except Alexandria which suffered a small drop. Perhaps more interesting however, is to note the overall "real estate product" (REP) for each jurisdictions. NARPAC uses the product of number of homes sold and their unit price as an indicator of the overall "gross domestic product" for the real estate sector. It is somewhat surprising that each Alexandria and Arlington have an REP about the same size as DC's, while Prince George's roughly the same size and population as Montgomery and Fairfax counties has only about half their REP. It might also be noted that the REP for each the Virginia and Maryland inner counties have over six times the REP of DC, leaving the inner city with well under a 10th of the region's residential real estate wealth.

It is a little more informative to look at this REP per total residential unit, the household (middle chart to the left). NARPAC prefers this per household measure, because per capita comparisons are substantially skewed by the numbers of children which have very little impact on comparative real estate economic value. Under this unit measure, it is clear that both Alexandria and Arlington are far wealthier communities. NARPAC considers these two relatively small jurisdictions to be natural extensions of the inner city (they were part of the original 10-mile square DC layout), and it is interesting to note the extent to which their economic strength has grown, particularly compared to DC's equivalent area East of the Anacostia. Again, however, Fairfax and Montgomery compete for top honors (as they do in most socioeconomic measures) both with each other and with the best the US has to offer.

Finally, it is interesting to note the differences between the highest and lowest REPs in each jurisdiction (bottom lefthand chart), arbitrarily singling out the four wealthiest and four poorest Zip Codes in each jurisdiction. This reinforces the NARPAC concern for the disparities between rich and poor so evident in DC. Interestingly, Fairfax County has this same high ratio (4.1:1), but with the poorest cohort still more than 40% better off than its DC equivalent. Not surprisingly, three of DC's poorest Zip Codes are those East of the Anacostia, as described in more detail in DC's economic challenges.
Finally, the chart below plots the cumulative REP as a function of the number of housing sales, starting at the least expensive end. The difference in curvature of the resulting lines is another indication of the difference in value of the low-end and high-end properties. DC's trace (the black line) is unique as it bends sharply up towards the more expensive housing units.

REAL ESTATE VALUES CONTINUE TO RISE 2001-2002

Home Sales

Despite the discouraging influences of national economics and world affairs, real estate values continued to rise throughout the national capital metro area during 2001 and 2002. Although the number of sales was significantly lower than in '99-'00, the median sales prices have continued to rise significantly. These are shown on the chart below. For the 87,000 homes changing hands, the rise in average median price for the entire region reached 15%, with the largest increases within DC (19%), and the lowest in the outer suburbs (12%). Sales within DC rose 33%, but remained essentially steady for the entire region, with Maryland losing some, and Virginia gaining some.

The difference in sales rates between 2000 and 2002 for the "inner city", comprising DC, and Arlington County plus Alexandria City is shown on the graphic below. Total cumulative sales are shown on the horizontal axis, while the cumulative product of number of units sold times their median sales price is shown vertically. (this technique is developed in the preceding section). The slope of each curve indicates the unit price from lowest to highest. As before, Arlington and Alexandria sell fewer low-cost homes, and many fewer high-priced homes. The break in the curve for DC continues to indicate the absence of middle-priced homes.

An earlier analysis of DC property assessments is included in another chapter on DC Budgets. However, it is interesting to note the continuing improvement in total assessed value of both residential and commercial properties that are taxed (excludes government, foreign, and non-profit properties). For the first time in six years, commercial assessments have risen to exceed residential assessments. This trend is likely to persist for several years as the commercial building boom continues. Recognizing that commercial property tax rates are twice those for residential property, this supports the firm (but unpopular) NARPAC position that it is both easier and quicker to raise tax revenues from the commercial sector rather than the residential sector. New construction is also summarized (from the 2002 DC Comprehensive Annual Financial Report) on the chart below. Note that construction rates for the past six years are double those of the prior seven years in each sector, and that the value added to the tax base from commercial construction is well over ten times that of residential building.

DC INTEREST IN CONDOS HAS A WAYS TO GO

For a large, densely populated American city, DC residents are only now beginning to become more interested in owning condos. As a matter of fact, 28 new condos went on sale in Georgetown in June of 2003 for anywhere from $2 million to $7 million each, though this is hardly the norm. As shown in the top chart to the left, DC home and condo sales both increased in 2002 over 2001, as they did in Arlington (Arl) and Alexandria (Alex), but remain relatively modest compared to Fairfax (Ffax), Montgomery (Monty) and Prince George's (PG) counties. Only in Alexandria, however, did condo sales match single-family house sales, although one might well imagine a similar pattern eventually developing in the central city itself if DC is to be successful in attracting 100,000 more residents overt the next 10-15 years.

The middle chart shows, however, that only in DC does the median sales price for a condo begin to approach that of a home: both exceeding $200K for the first time in '02. Unfortunately, this appears to be more because of the relatively low price for the average home sold. Nevertheless, condo prices in DC are higher than anywhere else in the Washington metro area, though home prices exceed only those of PG County. Finally, the bottom chart indicates that the ratio of the number of condos to homes sold is far lower in DC than in Arlington and Alexandria (the other two "urban" jurisdictions), while the price comparison is much closer. Analysts would expect DC's condo sales to increase in the future, and their prices should increase relative to houses as well.

GROWING REGIONAL DIVERSITY One of the best indicators of future diversity in this metro area is the composition of the public school systems in each of the region's counties. In October, 2000, The Post published a table showing the racial/ethnic breakdown in each for '99-'00 (Montgomery County is for '00-'01), summarized immediately below. The 30-year demographic changes in the Montgomery County School System are shown in the second table, from 1969 to 1999.

The news in this area has grown substantially over the past twelve months

TABLE OF PROPOSED LONG-RANGE SOLUTIONS--ECONOMIC DEVELOPMENT

The table below presents NARPAC, Inc.'s updated listing of functions and aims within this general category, offering simple goals and approaches for achieving them, and noting the progress (if any) to date. The tabulations and entries are clearly preliminary, but are intended to indicate the full range of steps needed to assure long-range solutions to the District's systemic problems.

Function/Aim	(o) NARPAC goal (>>>)Approaches to solution	Progress to Date
VISION OF FUTURE	o Develop Forward-looking Vision of City's Future	.
.	>>>Reconcile role of core city in shadow of federal gov't	no change
.	>>>Develop new concept of purposes of metro area core city	no action
.	>>>Reconcile conflict between "neighborhoods" and "downtowns"	avoided so far
.	>>>Find ways for city and suburbs to reinforce each other	no action
INCENTIVES	o Develop Positive Rationale for Working/Living in DC	.
.	>>>Avoid appearance of bribing people to live/work in DC	Doing opposite
.	>>>Expect to extract premium for living/working in DC	not perceived
.	>>>Define businesses/residents better off in suburbs	not perceived
BUSINESS CLIMATE	o Assure DC Laws & Regs Are Regionally Competitive	.
Planning	>>> Develop cooperative business/govt/residents plan	good start made
	>>> Foster major growth in global tourism to American Mecca	some start made
.	>>>Find ways to exploit tourism w/hi-tech 'virtual history'	new idea
.	>>>Accept multiple business areas, not one "downtown"	beginning around Metro stations
.	>>>Focus on rezoning/developing around metro stations	some progress, some resistance
.	>>>Adopt fewer/larger neighborhoods --102 is too many!	planning now done in 37 'clusters'
.	>>> Recognize need to eradicate some blighted neighborhoods	avoided to date
.	>>>Focus on 6-10 major zones (NoMa, Navy Yard, Conv Cntr, Howard U., Anacostia, etc.)	essentially done
.	>>> Single out 'East of Anacostia' for special long-range actions	good start, funds committed
Outdated Regs	>>>Establish Commission to Review DC Receptivity to Business	Done, report out
.	>>>Streamline Business Regulations, Committees, etc.	Done
Outdated Laws	>>>Phase out rent controls--encourage ownership	hot potato--avoided
.	>>>Adopt graduated building height limits away from core	hot potato--avoided
New Regs	>>> Oblige new businesses to help improve schools/lower crime	one or two cases like Oyster School
RESIDENT CLIMATE	o Focus Efforts on Most Likely Urbanites	.
Selectivity	>>>Accept reality of losing young, growing families, the poor	developers know inevitable
.	>>>Encourage 'gentrification'/higher revenue properties	happening anyway
.	>>>Develop attractions for 'empty-nesters', retired, etc.	happening anyway

KEY:
COG = Council of Governments

This page was updated on Oct 5, 2003