Everyone knows wealth is concentrating. This is where the rich are going
Reade Pickert & Jonathan Levin / BLOOMBERG
US UNEMPLOYMENT is near a 50-year low, economic growth is brisk and the stock market — despite a disappointing 2018 — has paid generous returns since the financial crisis of a decade ago.
But not for everyone. The chasm between rich and poor hasn’t been this wide since data collection began in the 1960s. Workers experience starkly different versions of America depending on which city or neighbourhood they live in. One way to measure the economic fortunes of a place is by the concentration of households earning US$200,000 (RM836,000) or more, the highest threshold in the Census Bureau’s American Community Survey.
Nationally, 6.9% of American households bring in that much. What follows are the areas (known to the Census Bureau as tracts) that have shown the biggest increases in concentration of US$200,000-and-up households since 2000, according to calculations by consulting firm Webster Pacific. It used data released on Dec 6 and adjusted for inflation. (The ranking excludes recently created tracts, those defined as tracts of significant change and any tract with fewer than 100 households in either 2000 or 2017.)
Cook County, Illinois
Cook County, which includes the county seat of Chicago, is home to the No 1 and No 7 fastest growing concentrations of US$200,000-plus households. No 1 is, ironically, the area around where the Cabrini-Green public housing projects once stood. Cabrini-Green was notorious for violent crime, poverty and de facto racial segregation until its demolition beginning in the 1990s at the behest of the Chicago Housing Authority.
Even back then, authorities fretted that redevelopment plans might displace low income families. They were right to be worried.
Two decades later, the area’s concentration of US$200,000-plus households has skyrocketed from zero to 39%. For some of the longtime residents who remain, the neighbourhood’s transformation has been isolating.
Latanya Palmer, 53, grew up in the Cabrini Rowhouses. While she moved into a nearby mixed-income development in 2005, the hypergentrification has occasionally made her feel like a stranger in her own home. That sentiment echoes across the country, as poor and working-class Americans are increasingly pushed aside by frenzied development and prohibitive living expenses.
“It looks beautiful,” Palmer said of the neighbourhood now, though she recalled how property managers early on would berate former Cabrini-Green residents for sitting on their own stoops. “They made us feel like we were less than human.”
Palmer recently got a job as a home health aide and hopes to move out of her subsidised unit. Still, she laments what’s been lost. “As poor as we were growing up, I didn’t realise we were poor — because it felt like a community,” she said. “Now, it doesn’t feel like a community.”
The census tract in question includes the still-standing, albeit largely vacant row houses where Palmer grew up. But now, there are luxury condominiums and apartments, too.
They sport rooftop terraces and sparkling views of the city’s affluent Gold Coast and Lake Michigan beyond. A three-bedroom penthouse can cost around US$2 million.
About 20 miles (32.19km) to the north, Cook County has another top 10 neighbourhood: The Glen, in the suburb of Glenview. Converted from what used to be Naval Air Station Glenview, the planned community has hundreds of families living in condos, townhouses and single-family homes that go for as much as US$2.5 million each, according to realtor Margaret Ludemann.
Washington, DC suburbs
Although New York City got all the attention when Amazon.com Inc announced the winners of its headquarters sweepstakes, the other lucky town was Arlington, Virginia. The online retail giant plans to bring 25,000 new jobs to this Washington suburb, paying an average of more than US$150,000 apiece.
If there’s one place in America that doesn’t need a helping hand from Jeff Bezos, it could be this one. The Washington commuter area is home to four of the top 10 (Nos 2, 3, 5 and 6) fastest-growing census tracts of high earners.
As a bedroom community for the nation’s capital, it already had significant concentrations of wealth back in 2000. But since then, it’s gotten so rich that in some areas around half of households earn more than US$200,000. (The New York metropolitan area nabbed Nos 9 and 10.)
Lobbyists, defence contractors, law firms and technology companies all played a role in the Washington area’s ascent. So, too, has the high ratio of multi-earner households, according to Jeannette Chapman, deputy director at the Stephen S Fuller Institute at George Mason University.
But even with all that income, many residents don’t feel wealthy, Chapman said (as infuriating as that may sound to the 39.7 million Americans living below the poverty line).
“A household earning US$200,000 here still might be struggling in a way that’s just unfathomable in other parts of the country because the costs are so much higher,” she said.
In the vicinity of Arlington, planned communities of single-family homes have exploded in value since they were built in the 1990s.
Home prices in Fairfax County, Virginia’s most populous jurisdiction, have more than doubled since 2000, with the average home selling for US$565,509 in 2017, according to the Northern Virginia Association of Realtors.
The No 4 census tract is in Florida, surrounding Marsh Landing, a gated community in Ponte Vedra Beach. Its residents have made a lot of money in the new millennium. In 2000, the area had a 20% concentration of the wealthiest Americans. Now, some 56% of households there make US$200,000 or more.
The neighbourhood is a short drive from Jacksonville, a city that’s added more than 23,000 financial-services jobs since 2000, according to the JAXUSA Partnership, a division of the local chamber of commerce. Since the financial crisis, Wall Street companies have sought to reduce wage expenditures by putting employees in cities with a lower cost of living.
As a result, Bank of America Corp, Deutsche Bank AG and Citigroup Inc now employ thousands of workers each in northern Florida.
Marsh Landing is attracting some of them. It’s home to more than 1,000 luxury homes and an 18-hole Arnold Palmer Design Co golf course, all set around marshes and ponds.
Houston enjoyed the fruits of oil’s epic rise to almost US$150 a barrel. But it’s also become diverse enough to withstand the crash that came in 2014 and 2015, buoyed by employers in finance, retail and even petrochemicals, which actually benefits from lower crude and natural gas prices, since that means cheaper inputs.
In the city’s commuter areas, development is unfolding before residents’ eyes. In neighbourhoods such as Oak Forest, 70-year old bungalows are being flattened to build homes three times their size. The Houston metropolitan region has 10 tracts in the top 100 fastest-concentrating pockets of US$200,000 households.
“There are people who think that 60, 70 years of history shouldn’t be lost to all these tear downs, but the fact is it’s an economic decision,” said Matt Mitchell, president of the Oak Forest Homeowners Association.
An operations data manager for a local energy company, Mitchell arrived in the area 10 years ago. He and his wife and two kids moved into a 1,600 sq ft (148.65 sq m) (house built way back in 1947.
But since then, he’s added another child. Now, he plans to tear it down and build a bigger one.