DC’s False Prosperity. A Story of Monopoly, Corruption, and Inequality
District leaders love to tout DC as a “World Class City”. As evidence for their claim, they point to high-end development projects located across the District that are stacked with amenities for single young professionals with money to burn. They point to a restaurant scene littered with new spots bearing the names of the latest celebrity chefs, offering premium cuisine at even more premium prices. They point to the fact that the median value of a home is over One Million Dollars.
One might mistake all this for prosperity. But it is not prosperity. It is an illusion of prosperity. A false prosperity.
There is another DC. One mired in racial and economic segregation. A DC which has created a failed public school system, one with alarming illiteracy rates in both its student and adult populations. A DC with a housing crisis that has come to define life for many working-class families. Families that are constantly one pay check away from eviction and unable to save money due to skyrocketing rents. A DC in which gun violence is an almost daily occurrence for many children.
Consider that in 2023 over half of the students attending DC public schools lived in poverty. The rate of reading proficiency across the public school system is an abysmal 33%. These rates are even lower for children attending schools in the most racially and economically segregated parts of the District. Below are the percentages of students that read proficiently in the four-neighborhood public high schools located in the most marginalized areas of Washington DC:
1. Anacostia- 5% of students proficient in reading
2. Ballou- 5% of student proficient in reading
3. Eastern-16% of students proficient in reading
4. Woodson- 19% of students proficient in reading
This is not prosperity. A society cannot be considered prosperous when it cannot educate its children and allows them to live in rank poverty. A society cannot be considered prosperous when much of the affordable housing that is available is run by slumlords and is unsafe to live in. A society cannot be considered prosperous when children cannot play outside without hearing gunshots and worrying for their own safety.
No, DC is not prosperous. Washington DC is deeply unequal.
It is a divided city between the very rich and the rest of us. And it is this inequality that has shamefully become the defining feature of life in the District.
How did we get here? A failed system of Economic Development.
Washington DC is a real-estate boom town. The hyper-financialized development model being employed by the real estate industry and their Wall Street backers does not invest in existing communities or the people in them. Instead, this model displaces people and extracts wealth. In this model, developers gobble up land in areas of the city that have faced decades of disinvestment. These developers then speculate on that land until they realize an opportunity to cash in. When the time is right, the industry invites a flood of Wall Street backed money into the neighborhoods. They do this while touting new development as a positive under the guise of “community revitalization”. Like a dam breaking over a village, this flood of capital washes away people who have lived in these communities for decades. Once the big Wall Street money hits, land values soar. This invites more speculation as housing that was once affordable is demolished, making way for more expensive housing to be built in its place.
For their business model to work, the developers and the private equity behemoths behind this development model need to do something very specific. They need to get rid of low-income and working-class families (read displace them) and replace those families with those willing/able to pay premium rents. As such, the business model is dependent on displacement. The District encourages this destabilization by giving away billions in public land and taxpayer money to subsidize this ineffective and corrupt development model. Government justifies these giveaways by arguing that the corporate largesse will trickle down and benefit the community as a whole. However, the reality is that the wealth generated is horded at the top of the food chain while those at the bottom are driven deeper into poverty. This process is one of the root causes of vast inequality in the District.
The current development model, and the inequality it creates, is driving the chaos we see on our streets. As communities are destabilized, children’s lives become unpredictable. When affordable housing is eliminated, families are pushed into housing insecurity and it becomes more and more difficult for children to attend school and engage in activities that contribute to their growth, well-being, and stability.
As this development process plays out, low-income and working-class families are driven deeper into hyper-segregated neighborhoods. These hyper-segregated neighborhoods and the people living in them are then ignored until the real estate industry tabs their community as the hot new “revitalization project”, at which point the pattern of speculation, demolition, and displacement will begin anew.
The District cannot continue down this path. In this new year, The Center for Social Housing and Public Investment will be focused on presenting an alternative form of economic development. One that is premised on building strong communities by using public resources to invest in families and their futures. Social housing will be a part of this alternative but our focus will expand beyond housing as well. We look forward to engaging in the “battle of ideas” in the days and months ahead.