Policy Center in your inbox

In my inaugural article for the D.C. Policy Center  I noted that from 1950 to 2010, as the region’s central city, Washington DC had lost 25 percent of its population “by nose count but [that was] offset by a 19 percent increase to total households.”

How can that be?

You can discover much of the answer for yourself by paying attention to all the high-rise apartments and condominiums that have sprung up in NoMA in the past two decades.  They are filled not with larger families but with singles, mingles, and some empty nesters (who have moved back into the District after raising and educating their children in the suburbs).

In fact, D.C.’s population resurgence—we had an “unbroken string of 11 years of population growth since 2005”—has been so strong that updated data to 2015 show that, once strong growth years are included, since 1950 D.C.’s nose count drop is 16 percent, and the household count increase is 26 percent.  From a local government perspective, the District has one-quarter more residential taxpayers than it had almost seven decades ago. That’s good fiscal news.

Over these past 65 years, average household size in D.C. shrunk from 3.19 persons per household to 2.24 persons per household. That’s almost a 30 percent reduction.   Families are having fewer children and the proportion of single-parent families has grown. With greater prosperity, more young adults are living independently from their families; with more generous retirement incomes and Medicare so are elderly parents. Many newcomers are moving in not with young families (as the soon-to-be three child Rusks did 54 years ago), but as one-person households (42 percent of all D.C.’s households).

The upshot is that if keeping nose count up were truly the goal, D.C. would have needed 30 percent more households by now just to maintain its historical peak population of 802,158 in 1950.

The table I append at the bottom (and you can download it) looks at the demographic paths followed by the 50 central cities at the heart of the country’s 41 largest urbanized areas that I analyzed in the inaugural article. The list is organized by city population change from 1950 to 2015 with Las Vegas (with its population increasing almost 25-fold) being at the top and St. Louis and Detroit (which lost almost two-thirds of their population) being at the bottom.

Cities with growing populations have stronger household growth, too.

The general pattern is that cities with a growing population added households at an even faster rate; cities losing population lost households at a slower rate. Overall, household size dropped in 46 of the fifty cities, averaging a 21 percent reduction.

However, four California cities increased their average household size modestly: San Jose and Los Angeles by 1 percent; Riverside by 7 percent; and San Bernardino by 13 percent. The reason: major increase in each city’s Hispanic population. In 35 years San Jose’s Hispanic population jumped from 22 percent to 32 percent; Riverside’s from 16 percent to 50 percent; San Bernardino’s from 25 percent to 63 percent; and Los Angeles’s, from 27 percent to 49 percent. Hispanic households have tended to have larger, even multi-generational families.

Of the 34 cities that gained both population and households, 31 are “elastic” cities that expanded their boundaries significantly either through annexation or, in the cases of Jacksonville and Indianapolis, city-county consolidation (as Denver, San Francisco, Philadelphia, New York City, and, in effect, the City of Washington had done in the 19th century).

Washington, D.C. fell into the small group of post-WWII “inelastic” cities with St. Paul, Boston, Milwaukee, and Minneapolis which lost population but gained households: fewer noses but more taxpayers. Net household growth has been primarily fueled by gentrification. Though today’s smaller households have fewer mouths to feed and backs to clothe, most singles, mingles, and empty nesters have more discretionary income to spend.

Central cities that are truly hurting are the eleven that have lost both population and households: Philadelphia, Chicago, Providence, Baltimore, Wilmington, Newark, Cincinnati, Pittsburgh, Cleveland, St. Louis, and Detroit. That’s almost a roll call of America’s most distressed cities. All contain a handful of gentrifying neighborhoods they promote and celebrate but city-wide they are in decline.

Fiscal implications of household losses are significant

Residential property accounts for about 70 percent of a typical city’s property tax base so there are fiscal consequences to losing households. Let’s see how Moody’s Investors Service awards its ratings for tax-backed General Obligation bonds.   (You might consider this a city’s “credit rating.”).

Aaa is the best possible, “blue chip” rating. Ratings proceed down the scale:  Aa1, Aa2, and Aa3 (excellent/good); A1, A2, and A3 (average/mediocre); Baa1, Baa2, Baa 3 (below average/ poor); to Ba1, Ba2, Ba3 and B1, B2, B3 (junk bond levels).

The lower on the scale a city’s bonds are rated, the higher the interest rate it must pay to compensate investors for greater risk of non-repayment.[1]   Having a low bond rating costs a city – in reality, its property taxpayers – more to borrow money to repair streets, build new or upgrade police substations, firehouses, recreation centers and senior citizen centers, etc.

The eleven household-losing cities average A3 bond ratings (mediocre). Population-losing but household-gaining Washington, DC and its four mates average Aa1 bond ratings (excellent).[2] Thirty-one population-gaining and household-gaining cities also average Aa bond ratings (this group includes eight of the nine “blue chip” cities).[3]

Of course, rating agencies take more than just trends in residential assessed valuation into account in determining level of risk associated with municipal bonds. A city’s current debt level, budgetary prudence, professionalism of its fiscal management, etc. are all factors to be considered.

A generation ago DC had a Ba1 bond rating. By 2002 D.C.’s bond rating was Baa1 and would rise further to A3 by 2010. D.C.’s bond rating is now Aa1.

All credit to better fiscal management, but the District’s current demographics, which are different from that earlier era, matter too. In 1989, the District’s per capita income was 87 percent of suburban levels. With gentrification, the city-to-suburb income level rose to 94 percent in 1999; to 99 percent in 2009; and to 114 percent by 2014.

In short, as measured by relative per capita income levels, Washington, DC is richer than its suburbs.[4]

So, if someone tells you that Washington, D.C. is a distressed city, since you now know that, per your D.C. Policy Center Fact Checker, D.C. has a Aa1 bond rating and per capita income of $50,187 (14 percent higher than its suburbs and exceeded only by Seattle and San Francisco), you can award that someone three Pinocchios.

Why not the full four Pinocchios? Because there is still a real problem. Let’s unpack D.C.’s per capita income statistic. White, non-Hispanic per capita income ($83,742) is more than three times higher than black per capita income ($26,409).

The shadow of racial inequality still clouds the Nation’s Capital. Race as well as sprawl has shaped America’s growth patterns, I told the Metropolitan Washington Council of Governments back in December 1999… and it still does.


In text notes

[1] Most non-Aaa cities choose to pay for-profit, municipal bond insurance agencies to guarantee repayment as if the bonds were rated Aaa; thus, the lower the underlying rating, the higher the insurance premium paid.

[2] Minneapolis and St. Paul’s credit ratings are undoubtedly boosted by their participation in Minnesota’s pioneering seven-county, 188-municipality Fiscal Disparities Plan that pools 40 percent of the growth in business property tax base.   If either central city gets in trouble from a declining tax base, the regional pool allocates more collective revenues to them.

[3] Riverside, San Bernardino and Salt Lake City do not have current ratings from Moody’s though Salt Lake City was rated Aaa just seven years ago.

[4] The 41 cities (Including DC) that gained households average 93 percent of suburban income levels.    The eleven cities that lost households average 70 percent of suburban income levels.

Data

The discussion in this post is based on the data below. You can download it in excel format here.

Central City City Population 1950 City Population 2015 % Δ in City Population   1950-2015 City Households in 1950 City Households  in 2015 % Δ in City Households 1950-2015 Average Household size in 1950 Average Household size  in 2015 % Δ in Average Household Size 1950-2015 Single Person Households in 2015 Latest City Bond Rating (Moody’s) Moody’s bond rating numerical equivalent City per capita income as a percenage of suburban per capita income in 2015
Las Vegas NV  24,624  623,769 2433%  8,264  220,418 2567% 2.98 2.79 -6% 31.6% Aa2 8.0 100%
Phoenix AZ  106,818  1,563,001 1363%  34,245 534,199 1460% 3.12 2.89 -7% 28.3% Aa1 8.5 85%
San Jose CA  95,280  1,026,919 978%  29,757 323,133 986% 3.09 3.13 1% 19.5% Aa1 8.5 71%
Austin TX  132,459  931,840 603%  35,538  364,893 927% 3.24 2.50 -23% 34.3% Aaa 10.0 111%
Riverside CA  46,764  322,423 589%  15,051 92,408 514% 3.11 3.34 7% 21.6% nr nr 101%
Charlotte NC  134,042  827,121 517%  36,899  322,872 775% 3.63 2.52 -31% 32.4% Aaa 10.0 116%
Orlando FL  52,367  270,917 417%  16,794 82,241 390% 3.12 1.27 -59% 31.8% Aa1 8.5 104%
Newport News VA 42,358  182,385 331%  11,727  70,546 502% 3.61 2.46 -32% 32.3% Aa1 8.5 86%
Jacksonville FL  204,517  868,031 324%  57,907 323,488 459% 3.53 2.62 -26% 30.0% Aa2 8.0 77%
San Diego CA  334,387  1,394,907 317%  104,508 497,663 376% 2.91 2.73 -6% 28.7% Aa2 8.0 114%
Houston TX  596,163  2,298,628 286%  180,655  849,974 370% 3.20 2.66 -17% 31.7% Aa3 7.5 89%
San Antonio TX  408,442  1,469,824 260%  111,960  494,344 342% 3.65 2.93 -20% 29.3% Aaa 10.0 79%
Sacramento CA  137,572  490,715 257%  43,383 177,131 308% 2.93 2.73 -7% 31.3% Aa2 8.0 83%
San Bernardino CA 63,058  216,137 243%  20,147 70,560 250% 3.13 3.55 13% 20.7% 58%
Fort Worth TX  278,778  836,969 200%  85,555  285,173 233% 3.11 2.88 -7% 27.3% Aa2 8.0 82%
Dallas TX 434,462  1,300,082 199%  135,123  495,362 267% 3.11 2.59 -17% 34.3% A1 6.5 94%
Tampa FL  124,681  369,028 196%  38,146 144,582 279% 3.27 2.47 -24% 35.8% Aa1 8.5 108%
St Petersburg FL 96,738  257,088 166%  35,773 103,788 190% 2.70 2.42 -11% 37.6% Aa2 8.0 105%
Columbus OH  375,901  849,067 126%  109,775  344,839 214% 3.17 2.40 -24% 36.3% Aaa 10.0 76%
Los Angeles CA  1,970,358  3,971,896 102%  665,752 1,360,164 104% 2.82 2.86 1% 30.1% Aa2 8.0 97%
Indianapolis IN  427,173  848,423 99%  131,825 328,431 149% 3.13 2.53 -19% 39.0% Aaa 10.0 74%
Miami FL  249,276  440,989 77%  78,612 171,720 118% 2.97 2.50 -16% 41.1% Aa3 7.5 81%
Portland OR  373,628  632,187 69%  126,653  253,820 100% 2.81 2.43 -14% 34.4% Aaa 10.0 106%
Memphis TN  396,000  655,760 66%  113,233  250,324 121% 3.35 2.55 -24% 35.1% Aa2 8.0 76%
Denver CO  415,786  682,545 64%  130,172 287,074 121% 2.99 2.33 -22% 37.8% Aaa 10.0 100%
Seattle WA 467,591  684,443 46%  154,511  311,038 101% 2.79 2.13 -24% 37.9% Aaa 10.0 135%
Tacoma WA  143,673  207,950 45%  48,088  81,647 70% 2.90 2.48 -14% 36.2% Aa3 7.5 75%
Atlanta GA  331,314  463,875 40%  92,798 200,503 116% 3.35 2.15 -36% 50.3% Aa1 8.5 135%
Norfolk VA 213,513  246,393 15%  53,978  87,819 63% 3.27 2.51 -23% 34.0% Aa2 8.0 86%
San Francisco CA 775,357  864,816 12%  259,055 356,916 38% 2.70 2.37 -12% 37.5% Aa1 8.5 129%
Oakland CA  384,575  419,278 9%  128,839 161,104 25% 2.84 2.56 -10% 31.7% Aa2 8.0 77%
New York NY  7,891,957  8,550,405 8%  2,359,981  3,129,147 33% 3.20 2.58 -19% 32.5% Aa2 8.0 98%
Salt Lake City UT  182,121  192,660 6%  54,361  79,031 45% 3.35 2.38 -29% 36.5% nr nr 118%
Kansas City MO  456,622  475,361 4%  148,161 198,129 34% 2.92 2.35 -20% 37.9% Aa2 8.0 89%
St. Paul MN 311,349  300,840 -3%  92,630 113,148 22% 3.23 2.58 -20% 35.0% Aa1 8.5 73%
Milwaukee WI  637,392  600,154 -6%  185,942  232,104 25% 3.27 2.51 -23% 36.6% Aa3 7.5 56%
Washington DC 802,178  672,228 -16%  224,099 281,787 26% 3.19 2.24 -30% 42.0% Aa1 8.5 114%
Boston MA 801,444  669,469 -16%  219,398 261,492 19% 3.37 2.38 -29% 37.3% Aaa 10.0 90%
Minneapolis MN  521,718  410,935 -21%  159,110 173,686 9% 3.08 2.26 -27% 41.1% Aa1 8.5 93%
Philadelphia PA 2,071,605  1,567,442 -24%  585,623  581,604 -1% 3.40 2.61 -23% 36.7% A2 6.0 62%
Chicago IL  3,620,962  2,720,556 -25%  1,088,345 1,053,229 -3% 3.18 2.53 -20% 36.3% Ba3 2.5 93%
Providence RI  248,674  179,204 -28%  72,349  60,644 -16% 3.26 2.72 -17% 32.8% Baa1 4.5 71%
Baltimore MD  949,708  621,849 -35%  268,096 238,400 -11% 3.41 2.51 -26% 38.4% Aa2 8.0 69%
Wilmington DE  110,356  71,957 -35%  31,587 28,002 -11% 3.49 2.45 -30% 37.2% Aa2 8.0 67%
Newark NJ  438,776  281,913 -36%  122,531  98,524 -20% 3.58 2.73 -24% 34.4% Ba1 3.5 50%
Cincinnati OH  503,998  298,537 -41%  159,124  137,445 -14% 3.02 2.08 -31% 44.7% Aa2 8.0 86%
Pittsburgh PA  676,806  304,385 -55%  190,745  131,793 -31% 3.40 2.13 -37% 42.4% A1 6.5 92%
Cleveland OH  914,808  388,059 -58%  265,491  167,667 -37% 3.29 2.24 -32% 43.9% A1 6.5 54%
St Louis MO  856,796  315,685 -63%  258,412  141,312 -45% 3.12 2.16 -31% 44.8% A3 5.5 82%
Detroit MI 1,849,568  677,124 -63%  513,128 255,580 -50% 3.43 2.60 -24% 39.2% B1 0.5 48%
   39 household gainers  21,442,436  38,089,458 78%  6,538,405  14,116,698 116% 3.13 2.55 -18.5% 33.8% >Aa1 8.54 93%
   11 household losers 12,242,057 7,426,711 -39% 3,555,431 2,894,200 -19% 3.33 2.43 -26.9% 39.2% <A3 5.41 70%

D.C. Policy Center Fellows are independent writers, and we gladly encourage the expression of a variety of perspectives. The views of our Fellows, published here or elsewhere, do not reflect the views of the D.C. Policy Center.

You might also be interested in…