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Household incomes in the District rise dramatically in 2017

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Just a year after sluggish household income reports in the District prompted speculation that the city’s boom years were ending, new numbers from the Census Bureau released Thursday suggest D.C. household income has swung dramatically back up.

Median household income for the city in 2017 was $82,372, 9.1 percent higher than in 2016, according to new data from the bureau’s annual American Community Survey.

The rise reflects an increase nationwide: Median household income rose to the highest recorded levels last year, according to a separate set of census numbers released Wednesday.

Middle-class incomes exceeded $61,000 for first time last year, Census Bureau says

But the gain in the District was sharper. While the city’s median household income had been rising in previous years, it had decreased slightly in 2016, a change some experts attributed to a decline in high-paying government jobs and a tendency for young families to leave the city in search of more space and better schools.

There are several possible explanations as to why the city’s income would have gone up last year, said Jeannette Chapman, deputy director and senior research associate at the Stephen S. Fuller Institute for Research on the Washington Region’s Economic Future at George Mason University.

“This does indicate a pretty big jump compared to prior years,” she said, adding that it could be driven in part by the fact that the city’s population increase in recent years has been driven primarily by working adults with incomes. “Even the interns, they have some income,” she said.

Also, she said, average wages in the city finally rose in 2017 after decreasing for three years and then staying flat for four years. “Wage growth is a key component of income; if wages aren’t growing it’s hard to have household income go up,” she said.

Geraldine Gardner, director of urban and regional policy at the German Marshall Fund of the United States, sees the bump as the result of long-term urban policy planning under several mayors coming to fruition. The effects, she said, can be seen in neighborhoods, schools, and transportation.

“The District’s really hit its stride,” she said. “It is increasing its reputation nationally and globally as an interesting place to live, work and play.”

Chanda Washington, communications director for the deputy mayor for planning and economic development, lauded earlier mayors’ planning and added, “I think it is also the [current] administration’s efforts to try and support our small businesses and to improve our workforce development and to fight for our wage-earners.”

In the past year, several new luxury housing developments were added to the market, including new condominiums along the Wharf in Southwest D.C. geared toward residents with six-figure salaries or higher. Gentrification in neighborhoods with older housing stock has also helped push up the median income in recent years.

But Ed Lazere, executive director of the D.C. Fiscal Policy Institute, cautioned against reading too much into the 2017 jump. Noting that household income had been going up in smaller increments before 2016, he said the sag that year could have been a statistical sampling blip and that the 2017 number fit the earlier pattern of growth.

“There’s always some noise in the data,” he said. “Even though this is the best census survey for the District, the sample size is still small enough that it’s hard to know if changes over a short period of time are meaningful.”

Counties in the greater Washington region also showed upticks in median household income, although not by as much as in the District, and several rank among the top 10 nationwide.

In Virginia, Loudoun County continues to be the highest-
income county in the United States, with a median household income of $135,842. Fairfax County is still No. 3, at $118,279. Arlington County rose from No. 6 to No. 4, with a jump from $110,388 to 117,237. Howard County, Md., fell from No. 2 to No. 12 as its median household income dropped from $120,941 to $111,473, bringing it closer to its level two years ago.

The District ranks fourth among the nation’s 50 largest cities in median household income, behind San Francisco, San Jose, and Seattle.

But the city’s rising incomes are not equally distributed, noted William Frey, a demographer at the Brookings Institution. Among racial groups in large cities for 2017, the District ranked second for whites, 18th for blacks, first for Hispanics and second for Asians.

The median household income for blacks in the city was $42,161 while for whites it was $134,358. For Asians it was $96,394, and for Hispanics it was $84,728 — the highest for Hispanics in the nation’s largest 50 cities.

“It shows we have some work to do,” Washington said. “We still have a wage gap and income disparity that we need to figure out. . . . Then we will be like, ‘Yeah, I’m loving that number’ — when we get all our residents on a strong pathway to the middle class.”

The divide was less extreme on both ends in the suburbs, where income for blacks was $72,564, the second-highest among the nation’s metropolitan areas, and $120,327 for whites, also second in the nation.

The difference was likely a reflection of white gentrification in the District and the continued movement of higher-income blacks from the city to the suburbs, Frey said, adding that overall, “Both whites and blacks are doing much better in the Washington region than in other parts of the country.”