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*GENTRIFICATION AT WORK* As gentrification marches on, we examine eight D.C. ZIP codes that have seen big changes. <www.bizjournals.com/washington/news/2019/08/16/heres-what-gentrification-looks-like-in-d-c-s.html?ana=e_wash_bn_exclusive&j=89820241&t&mkt_tok=eyJpIjoiTlRFMlpETmlPR1JtTmpNMCIsInQiOiJoKzd1M0VuVWpFZT…>
By Carolyn M. Proctor – Data Editor, Washington Business Journal Aug 16, 2019, 5:00am EDT Updated Aug 16, 2019, 12:11pm EDT
The Washington region stands among the richest enclaves in the country, with its own Great Falls nestled among the U.S.’s top 10 wealthiest ZIP codes. Four of the country’s 10 most educated ZIP codes lie within our borders, topped only by Cambridge, Massachusetts. And two District ZIP codes house among the highest concentrations of management workers nationwide.
But as wealthy as our region is, we also have ZIP codes where the median household income is below the national median. Ditto for the median home value, despite our famously robust local housing market. In these ZIPs, per-capita incomes are below the national average of $31,786 and fewer than 10% of the adult population has graduate or professional degrees, while less than a third work in management.
Today, pockets of the District have been changing, and changing fast, to bridge that wealth divide. That change, however, has come at a cost.
Enter the concept of gentrification.
That’s when “an influx of investment and changes to the built environment lead to rising home values, family incomes and educational levels of residents,” according to the National Community Reinvestment Coalition. As wealthier residents move in and rental rates rise, that, in turn, can lead to substantial displacement of the area’s original residents, many of whom are African American. Cultural and racial displacement occurs when “minority areas see a rapid decline in their numbers as affluent, white gentrifiers replace the incumbent residents,” said the coalition, a D.C.-based 501(c)(3) nonprofit.
Using U.S. Census Bureau and economic data from 2000 to 2013, NCRC found that the highest levels of gentrification occurred in a few U.S. coastal cities during that time period. About half of all gentrification found in the study occurred in just seven cities, per its report: New York, Los Angeles, Washington, Philadelphia, Baltimore, San Diego and Chicago. While New York had the most cases in terms of sheer size, the percentage of available living areas that were gentrified was higher in D.C. than anywhere else.
While that has raised the wealth levels in each of those areas and afforded more and better infrastructure that benefited the regional economy, it has also contributed to a significant shift in the ethnic make-up of the city’s population in those fast-gentrifying areas.
NCRC research found that some longtime residents get left behind in the process. It said 20,000 African American residents were displaced from 2000 to 2013 due to gentrification in D.C. neighborhoods, by far the highest of any other metro area and nearly one-fifth of all black residents displaced nationally.
In its own research, the Washington Business Journal tracked Census changes from 2000 to the most recent year available, 2017, for each of the eight District areas that the NCRC identified as having experienced the most gentrification, from Petworth to Penn Quarter, Capitol Hill to Southwest D.C. We looked at changes in ethnicity, focusing on African American and white representation, as well as household median income, per-capita income and percentage of management jobs.
While it’s difficult to say if the changes are due solely to gentrification or displacement, or merely more white residents moving into growing neighborhoods, the demographic shifts are unarguably stark.
The research
In its study, the NCRC analyzed Census tracts — roughly the size of neighborhoods — that, in 2000, were in the lower 40% of home values and family incomes in a given metro area. The group then followed economic changes and displacement in those areas through 2013.
Neighborhoods that ended up in the top 60% for increases in percentage of college graduates and median home values were counted as gentrified. When the population of a racial or ethnic group in a neighborhood decreased by 5% or more, and also more than two standard deviations from the national average, the group counted it as displacement.
It found that D.C. saw both metrics change the most in tracts spanning the eight ZIP codes for which the Washington Business Journal gathered its Census data: Shaw, Trinidad, Capitol Hill, Penn Quarter, Logan Circle, Columbia Heights, Petworth and the Southwest Waterfront.
Further, the NCRC overlaid the Metro map over the noted neighborhoods and found a cluster of gentrification and displacement around Metro stations, especially along the Green Line and eastern portions of the Red Line — aligning with a trend in development around mass transit.
“It wasn’t just that D.C. edged out the other cities in terms of most intense level of gentrification or the most displacement,” said NCRC Director of Research Jason Richardson, who co-authored the study with Bruce Mitchell, the group’s senior research analyst. “D.C. was head and shoulders above the other cities we looked at.”
While some economic experts are loathe to compare the District with other regions or metro areas because its dynamics are so different from both, when it comes to the NCRC study, “its findings are stark, there’s no arguing them,” said Yesim Taylor, executive director of D.C. Policy Center, a nonpartisan, nonprofit think tank that was incubated by the Federal City Council.
But, she said, causes for the demographic changes are much more complicated, stemming not merely from gentrification, but instead from an overall concentration of poverty, according to center research.
“When you look at just the African American community in the 1980s and ’90s, poor and rich African Americans lived kind of close to each other, generally in the District of Columbia. When you look at 2016, the most affluent blacks had moved way out of the city. And that movement happened in the late 1990s and early 2000s,” she said. “So, what we see as a trend of white people pushing out black people, this is already happening within the black community as well. The black exodus largely happened by 2010. But the influx of whites still continues today.”
The word gentrification has varying connotations, depending on whom you talk to. The concept itself can divide many a community, on its origins, implications and best fixes.
City planners must work toward the broader economic good of a district and within the confines of its existing coda. Developers must rein in spiraling costs and bring in a financial return on expensive real estate projects for their own investors. Community activists must speak for those left behind in the system. All of their interests can often stand at odds with one another, complicating the ability to ease the situation and agree on solutions.
But few contest that the wealth gap and its effects are becoming a larger part of the region’s collective consciousness.
“We’re all much more aware of the affordability problems in the city. So, if I compare it to 20 years ago, there was almost no discussion of it at all. But today, it’s discussed all the time,” said Monty Hoffman, founder and CEO of PN Hoffman, which developed The Wharf in Southwest D.C. “Every development is unique, because it has its own economic stress points. And it also has its own community needs.”
At The Wharf, built by PN Hoffman and Madison Marquette, developers were required to incorporate affordable housing into their plans under D.C.’s Inclusionary Zoning program. Of its 649 new apartments, 200 are affordable and workforce apartments.
The D.C. Department of Housing oversees a lottery system for those affordable units, which are based on an applicant earning a certain percentage of the region’s median family income. There are 62 units for families earning 30% of the MFI (rent starts at $533 a month), 69 units for those earning 60% MFI (for $1,149 and up a month), 46 units for those earning the exact median (at $1,590 and up a month) and 23 for families earning 120% MFI (rent starts at $1,670). The Wharf also has five condos at 525 Water available to families earning 50% MFI, and six condos for 80% MFI, also through a lottery selection.
“We’re happy that when we did develop everything here that we were able to put a real community — not an exclusive resort-type thing, but a real community — connecting a lot of people together,” Hoffman said.
But critics say that’s not nearly enough to create a true mix of incomes. They say the District and developers are redefining affordable housing to include families earning up to 120% of the area median income, or $141,000 a year.
“It would be one thing if we said, ‘This is also a bracket of people that needs housing,’ and there’s some private development that suits that bracket,” said Parisa Norouzi, who co-founded Empower D.C. in 2003 with Linda Leaks to help low- and moderate-income residents build political power on issues like affordable housing and fight gentrification. “But to put public subsidy towards that is the thing that we seriously object to.”
Hoffman said that his team could build more residential into the development by adding that level of workforce housing on top of the affordable housing for lower-income families. “Originally the city had simpler math,” he said. “It was 30% affordable housing, half of which had 60% [AMI], for a minimum of 160,000 square feet of affordable housing. So OK, we took that, and we could have just done that, and the rest of the whole community would have been office and retail and parking. But we decided we wanted to put a lot more residential in. And so, we negotiated with the city, and they worked with us on this to create this moderate-income housing.”
That was a purposeful move by the city, according to Andrew Trueblood, director of the D.C. Office of Planning, who opts to call that tier “middle-income housing.” While programs are in place directed toward low-income housing, “we don’t have as many for middle-income households, and many of them are getting squeezed out of the city as well,” Trueblood said. “We’re still looking for ways of ensuring that there are opportunities for those middle-income families to live in the city.”
Any discussion on gentrification is incomplete without mentioning the latest battle playing out over the planned redevelopment of the Barry Farm public housing community in Southeast D.C. Demolition started early this year, and hundreds of families have already been relocated during the construction phase. The redevelopment team, which includes Boston-based nonprofit Preservation of Affordable Housing and minority-owned and District-based A&R Development, was also required under Mayor Muriel Bowser’s New Communities Initiative to offer current and eligible former residents — largely African American — the right to return to a one-for-one replacement unit upon completion.
The development team did not return a request for comment as of press time.
But community leaders remain skeptical that Barry Farm’s redevelopment — now stalled in legal action and appeals — will benefit its original residents.
“I believe that when there’s a lack of oversight at the Zoning Commission, which there was for a significant amount of time, it contributes to things like gentrification,” said attorney Ari Theresa, principal partner of Stoop Law and a fourth-generation D.C. resident who had filed a $1 billion class-action lawsuit against the District over the redevelopment plans. “Barry Farm was a perfect example.”
The solutions
For the D.C. Policy Center’s Taylor, the fix is simple.
“We have a housing problem,” she said. “Gentrification in this region is largely a housing issue. Just producing more housing is the simplest, most straightforward way of solving it.”
The key, she said, is reexamining zoning policies for single-family housing — it accounts for 75% of all taxable lots in the District, even though single-family homes only make up 30% of the city’s housing stock, according to a research paper the center published last month. Furthermore, the center found that the share of nonwhite families is significantly lower in single-family housing zones in the city, especially west of the Anacostia River.
“While the District has undergone a massive transformation, single-family zoning looks pretty much the same (except for downtown) as it did almost a century ago, when zoning was first adopted in the District,” read the research paper. “Increasing housing supply in the District requires rethinking of single-family zoning.”
From the city’s perspective, Trueblood agrees that building more housing is key, pointing to Bowser’s goal of creating 36,000 new housing units, one-third of them affordable units, by 2025. He said his office is working closely with the Department of Housing and Community Development and other agencies to improve its systems for both residents and landlords and strengthen policies such as inclusionary zoning, which requires developers to set aside 8% to 10% of a residential floor area for affordable rental or for-sale units in all new residential development projects entailing at least 10 units or in rehab projects that expand a building by at least 50%. Since its 2009 start, the program has grown rather slowly, logging two new units in 2011 and 14 units the year after that.
In all, between fiscal 2011 and 2018, the IZ program has led to the creation of 792 units of affordable housing in 102 total developments, raising questions of whether it’s enough to meet the need.
Hoffman said one potential fix is for the District government to attach more affordable housing requirements to any city-owned land going toward a project and to exclude all transfer taxes on affordable housing.
“We should look at affordable housing as zero real estate tax,” Hoffman said. “That could definitely help counter the negative aspects, economically speaking, for a developer on affordable housing. It could help offset it.
Ed Lazere, executive director of the nonprofit D.C. Fiscal Policy Institute, said he thinks the city’s programs work well, but they lack sufficient funding and priority.
“Housing is 3% of the D.C. budget and way more than 3% of the city’s challenges,” he said.
His organization has proposed to D.C. leaders that they institute a 10-year plan to build or subsidize deeply affordable housing for the city’s 30,000 lowest-income residents, using a combination of tenant-based vouchers, gap financing for new subsidized housing construction and operating assistance for built units. By year 10, the combined funding would be $1 billion, which Lazere points out is still half of what the city spends on schools. “We just need a sense of urgency to act now and think of housing as a core city function, the way we think about schools, the way we think about public safety,” he said.
But community leaders like Norouzi and Theresa often blame D.C. government for allowing the gentrification shifts. They say the city too often subsidizes projects and offers public land for luxury-scale developments that seem designed to attract wealthier newcomers while pricing out the original residents. As District leaders hammer out changes to the city’s comprehensive plan, they say they worry the advantage will continue to go toward developers in the race for density.
“It doesn’t have to be that way,” Norouzi said. “Community economic development is a model where you work with impacted communities to build new institutions, rather than building things in a way that essentially excludes the people and makes it such that they’re unable to stay in their homes.”
Norouzi and Theresa both point to more community investments in land trusts, schools and small businesses to build up a neighborhood, before putting up new building facades. They advocate for allowing current business owners to get financing to buy their own buildings and lower-income residents to tap the Tenant Opportunity to Purchase Act to purchase their own homes.
Norouzi said she expects to see more to come as the gentrification movement heads eastward. “Anacostia is going to be the next Columbia Heights, in terms of the rapid move towards unaffordability.”
The Washington region stands among the richest enclaves in the country, with its own Great Falls nestled among the U.S.’s top 10 wealthiest ZIP codes. Four of the country’s 10 most educated ZIP codes lie within our borders, topped only by Cambridge, Massachusetts. And two District ZIP codes house among the highest concentrations of management workers nationwide.
But as wealthy as our region is, we also have ZIP codes where the median household income is below the national median. Ditto for the median home value, despite our famously robust local housing market. In these ZIPs, per-capita incomes are below the national average of $31,786 and fewer than 10% of the adult population has graduate or professional degrees, while less than a third work in management.
Today, pockets of the District have been changing, and changing fast, to bridge that wealth divide. That change, however, has come at a cost.
That’s when “an influx of investment and changes to the built environment lead to rising home values, family incomes and educational levels of residents,” according to the National Community Reinvestment Coalition. As wealthier residents move in and rental rates rise, that, in turn, can lead to substantial displacement of the area’s original residents, many of whom are African American. Cultural and racial displacement occurs when “minority areas see a rapid decline in their numbers as affluent, white gentrifiers replace the incumbent residents,” said the coalition, a D.C.-based 501(c)(3) nonprofit.