The region’s top one percent of households make more than a half million dollars yearly — far more than the national average for the one percent, according to a study of Census data by Sentier Research, an Annapolis-based data analysis firm.
And these top earners — many of whom are from dual-income households and benefit from federal contracting — weathered the recession better than their counterparts in some other metropolitan areas and the nation. More are moving beyond comfortable affluence to a much higher standard of living.
“What is unique to D.C. is that there has been a change in the complexion of wealth here. There didn’t used to be much of this ultra-high-net-worth business here and now there is,” said Susan Traver, the regional president of BNY Mellon Wealth Management.
The firm expanded its operations and opened a new office downtown late last year to capitalize on what it refers to as one of the top-10 wealth markets in the country. Since then, the firm has added more than two dozen clients whose assets range from $10 to $50 million on average, Traver said.
The firm works with real estate developers, heirs and small business owners who have sold their companies, some of whom are worth as much as $100 million, she said.
Data on assets can be difficult to come by at the metropolitan level because the sample sizes are so small, experts say. But wealth managers such as Traver point to industry research, for example, Capgemini’s Metro Wealth Index, which recently estimated that the number of high-net-worth residents in the region has grown from 127,000 to 166,000 since 2008, a 30 percent increase. They define “high net worth” as investable assets of more than $1 million, excluding the value of a primary home and collectibles.
Milton Pedraza, the CEO of the Luxury Institute, a research and consulting firm, said that purveyors of luxury goods are drawn to the area because it has a “critical mass” of affluent and highly educated consumers and a stable economy bolstered by the federal government.
Government contracting, where some local entrepreneurs and business owners amassed their fortunes, has been
a key driver of the region’s economy for three decades.
A third of the region’s gross regional product still comes from federal spending — although that is slowing
“Let’s face it . . . the only place with money during the recession was Washington, D.C.,” Pedraza said. “So it’s no surprise that it’s being seen as one of the hubs of luxury where companies want to plant some flags.”