In the District of Columbia: Families vs. Singles, Cost vs. Benefits

In an attempt to stimulate debate on the future of the District of Columbia and on its role in the Greater Washington area, we have set out a bold vision for the economic development and fiscal viability of the city over the next 10 years. In 2010, we imagine a city that is more densely settled, with a population of about 672,000—an increase of 100,000 residents over 2000, including substantially more families with children.

This is an ambitious goal, but we think it is both desirable and feasible. The District’s special status as the nation’s capital narrows its tax base drastically and prevents it from taxing the incomes of non-residents who work here. Aside from obtaining a larger contribution from the federal government—a goal we support—the District’s only option for improving its schools, roads and other public services is attracting and retaining more employed residents in Washington—a city, remember, that only 30 years ago was home to 750,000 people.

The question we address here is: Who should the additional residents be? We describe two different strategies and speculate about how the city would change if each were successful. The point is not to choose one or the other—we need both—but to understand where policy choices might lead.

Suppose the city tried to increase its population of adults with moderately good incomes and without school-age children by making it more attractive for those with jobs in the city to live in the District, rather than in the suburbs. This strategy would focus on young professionals, as well as some older adults, including empty-nesters and retirees. These are people enthusiastic about the city’s cultural amenities, restaurants, nightlife and diversity, but who also want safety, attractive surroundings and a well-managed government.

This strategy would require accelerating the development of middle-income and upscale housing that is already occurring in parts of Washington, and that could occur in reviving neighborhoods, eventually including the newly reclaimed Anacostia waterfront. Policies conducive to this would include: facilitating faster development of market-rate housing by streamlining the zoning processes; assisting developers in assembling packages of land for multi-unit housing; implementing aggressive efforts to clean up the Anacostia River and to build housing along the waterfront; and requiring the inclusion of housing as well as commercial development in plans for downtown and areas around Metro stations.

If this strategy were successful, it would increase the number of employed residents with above-average incomes, bring new residential property onto the tax rolls, and increase the value of existing real estate. Retail sales would rise, and the profitability of neighborhood businesses would be enhanced. New jobs would be created.

The impact on the city’s tax base and revenue would be extremely positive. Our calculations indicate that if the city’s population of middle- and upper-income singles and childless couples increased by 50,000, the net annual increase in the District’s revenues would be in the neighborhood of $ 300 million.

What would be the implications for the city? The adult strategy would raise the proportion of people in upper-middle income brackets, and probably increase the ratio of whites to African Americans.

This strategy could make the city more livable and attractive for both current and new residents, by increasing the potential clientele for restaurants, shops and entertainment venues. However, by itself, it poses a serious risk of exacerbating racial and class tensions and widening the gulf between rich and poor. Gentrification of lower-income neighborhoods could increase tension and resentment. Development of upscale housing east of the Anacostia would reduce the isolation of that sector of the city, but could heighten race and class resentment at the same time.

It would take strong, visionary leadership to ensure that all segments of the population benefited from the city’s increasing prosperity and reduce resentment and anxiety in the face of change.

Now suppose the city set out to grow its population by attracting and retaining middle-income parents and their children. This group would include both one- and two-parent families, typically with at least one earner who works in the District. They might be teachers, law-enforcement officers, nurses, university faculty and staff, and professional, technical and clerical workers in both government and the private sector. They would live more modestly than the new city dwellers targeted in the adult strategy. Accommodating these new families would require fewer additional housing units, because these households are larger, but the units would have to be more affordable and a portion of them would require subsidies. The school population would rise rapidly, increasing the need for improved facilities and performance.

The family strategy is far more challenging for the District’s policymakers than increasing the population of adults. It requires a higher level of community-wide commitment and effort than the adult strategy. This is not just a question of improving the schools, or making streets safer, or increasing Washington’s dwindling supply of decent, affordable housing, but of accomplishing all of these objectives in a visible and coordinated way. We believe the best approach is for the city to target neighborhoods in different parts of the city for revitalization, including:

• Building strong public-private partnerships in each of the targeted neighborhoods, with the leadership of an anchor institution, such as a university, hospital or government agency that is a major employer in the neighborhood. The anchor institution should work with the city, financial institutions and community groups to increase the attractiveness of the area and provide more housing for people who work in the city.
• Improving the neighborhood’s schools. In some areas the partners may chose to center their efforts around a “community school,” where day care, social services, and possibly a primary care clinic or senior center would be located in the same building or an adjacent one.
• Ensuring an increased supply of housing for a mix of income levels. The partners should take advantage of programs, including rental and home-ownership subsidies, to make sure that new and renovated housing is available to families of diverse income levels, and that households already living in the area are not pushed out by rising rents and real estate taxes.
• Engaging the District’s employees. The District’s own workforce represents the most obvious single group of commuters likely to contribute to a restitution of its tax base. A majority of the District’s police and fire force, as well as the teachers, now reside outside its borders. Such workers could form the core population of the active and safe neighborhoods explicit in this strategy. One approach might be for the government to give outstanding employees special assistance in buying a home in the District. Chances of success would also increase if the District’s administration engaged its employees and their unions on economic development strategies.

Several substantial neighborhood revitalization efforts are already well underway, some of them involving partnerships built around anchor institutions, such as Howard University and the Navy Yard. But, so far, the schools have not been integrated into the revitalization effort, much less become central to it. It seems to us that it is crucial to this strategy’s success that the school system be engaged in planning and implementing neighborhood revitalization.

The family strategy puts more stress on the city’s budget than the adult strategy. These families may not have earnings as high as the families without children, and they require more public services. The costs of improving the schools, subsidizing housing and providing other services would add up to considerably more than the additional revenue brought in by increased income, sales and property taxes attributable to middle-income families.

What would be the implications for the city? The family strategy holds the promise of creating neighborhoods with a strong sense of community, whose residents are committed to the District. It might not widen the gulf between affluent and lower-income parts of the city as much as the adult strategy, because it would fill in the middle. The new residents would have moderate incomes and probably a higher ratio of African Americans, especially if the strategy were successful in retaining young African American families who might otherwise have left the city in search of better schools.

Targeting particular neighborhoods and their schools for improvement is crucial because it creates a critical mass of new resources and the psychological momentum needed to bring back a deteriorating area. However, targeting also creates political tensions between these neighborhoods and other parts of the city that inevitably feel unfairly left out. It would require strong city-wide leadership to buck the political forces arrayed against targeting and convince those who have to wait that they stand to benefit in the longer run.

These extremes—either an “adult only” or a “families with kids only” policy—are worth discussing only to make the point that Washington needs to pursue both strategies at once. The primary objective should be making the city an attractive place for a diverse population to live and work. Family-oriented policies and neighborhood revitalization hold out the enormous promise of a strong community and vibrant city in the long run, but they are difficult and expensive to carry out successfully. The mix of policies is necessary in part because the city can afford to undertake family-oriented neighborhood revitalization on a large scale only if it also facilitates some increase in the upper-income adult population to sustain budget balance.