Don't Blame Obama for Washington's Gentrification

Washington is hardly the only city with sharply rising incomes during the Obama era.
Wait a second before you blame Obama.

I was just talking to a colleague about the dizzying pace of gentrification in my neighborhood, and in Washington as a whole. I watched rapid gentrification on New York's Upper West Side in the 1980s and 1990s, but the speed was glacial compared with the wave of demographic change that has swept eastward from Rock Creek Park, and now outward from half the metro stops in the city.

Why is this happening? One answer, popular among some of my readership, is that this is "Obama's America": that an era of hog-wild government spending has vastly enriched the bureaucratic class. And to be sure, telling a story about gentrification in the District of Columbia that doesn't involve federal money is hard.

But hold on before you blame Barack Obama. A new study from the Federal Reserve Bank of Cleveland looks at gentrification in some of the U.S.'s largest cities, and it finds what you would expect: Unlike most cities, Washington has seen household incomes growing, relative to the greater metropolitan area, since the Great Recession. But we're not the only city to enjoy this boon: Portland, Seattle, Denver, Minneapolis and Cincinatti have also seen their incomes keep growing. And Washington was actually gentrifying faster before the Great Recession, and Obama's election.


That's not as surprising as it might seem. For one thing, government spending was growing rapidly before the financial crisis -- just on defense, rather than on social spending. And while social spending generates a lot of bureaucratic jobs in the far-flung state capitals where it is administered, defense spending generates a lot of military contracting jobs in places such as ... Washington, and the former Boeing headquarters in Seattle.

Washington is also the beneficiary, income-wise, of a number of trends driving affluent people into its city center. There is the end of what Alan Ehrenhalt calls "The Great Inversion," for example. Essentially, Ehrenhalt argues that the natural format of cities is to have rich people in the (convenient) center of cities, and poor people on the peripheries. From the 1940s to the 1990s, the U.S. reversed that normal pattern, for complex reasons of sociology and law. Since then, however, we have been reverting back to the normal pattern, with affluent people buying up homes in the walkable urban neighborhoods of economically successful cities, and pushing the poor out to the exurbs.

The Great Inversion has apparently been accompanied by (or perhaps driven by) greater educational segregation between cities. College graduates increasingly seem to want to park themselves in a small number of high-amenity urban areas. Where they cluster, the cost of living is also high, for reasons that are unclear, but would be fun to explore in a different post. This has two effects: The cluster raises the average income of the city, and it forces out lower-income workers who can't compete for housing and other services ... which raises the average income of the city even farther.

What's happening in Washington is the culmination of long-standing trends in our culture, demographics and government institutions. We shouldn't ignore the role that government spending has undoubtedly played. But blaming it all on Obama doesn't make sense, either.

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