Overview of D. C.’s Dedicated Taxes, FY 2010 – FY 2019

Like many other states and municipalities, the District sometimes earmarks or dedicates tax revenue for specific purposes rather than general budget purposes. One of the most common examples of a dedicated tax is the motor fuel tax used to fund roads and highways and it has become more popular as a way to raise tax revenue. On one hand, dedicating taxes guarantees funds are available for a particular purpose, such as making bond payments or matching federal grants.  On the other hand, dedicating taxes to specific purposes reduces general funds available to support the full range of programs and services provided by government.

All or part of a tax may be dedicated to a specific purpose. For example, the Housing Production Trust Fund, which receives 15 percent of the revenue generated by the District’s deed recordation and deed transfer taxes while the sales tax on parking is fully dedicated to fund the District’s annual commitment to the Washington Metropolitan Area Transit Authority (WMATA).

Dedicated taxes in the District were first reported in 1999. In that year, $51 million was dedicated to the Convention Center Fund from sales tax revenue associated with restaurant and hotel activity.  The amount dedicated was 1.5 % of total gross revenue. Since FY 1999, the number of dedications from taxes has increased significantly. In FY 2019, there were 22 dedicated taxes (chart 1).

Chart 1: Change in number of dedications 1999-2019

In addition to the increase in number of dedications, there has been substantial growth in the amount of tax revenue earmarked for dedications. During the period between FY 2010 and FY 2019, total dedicated taxes increased from $334 million in FY 2010, to $805 million in FY 2019, a 141 percent increase in the proportion of tax revenue set aside for specified purposes (Chart 2).  The percentage of dedicated taxes to total taxes also increased from 7 percent of total taxes to 9.8 percent during the same period.

Chart 2: Aggregated dedications FY 2000 – FY 2019

Sales and use tax provided much of the revenue earmarked for dedications in FY 2010 and FY 2019, whereas the percentage of motor fuel, gross receipts, and property tax revenue as a total of dedicated taxes was reduced in FY 2019, compared to FY 2010 (Chart 3). The percentage increase in the proportion of dedications from sales and use tax revenue is due to 1) the number of new dedications (for example, a new dedication of $178.5 million for WMATA capital improvement projects representing most of the increase in FY 2019), and 2) changes in rates for some taxable items listed in Tables 1 and 2.

Chart 3: Dedicated tax by tax type as a percentage of total dedicated taxes

Note: Other includes dedications from health-related taxes and the Baseball Project. 

Table 1: Changes in rates from sales and use tax, 2019 compared to 2010

Table 2: New tax dedications by tax type, 2019 compared to 2010

The District’s dedicated taxes are directed towards economic development, transportation, health, housing, and general services.  In FY 2019, economic development projects and transportation accounted for 75 percent of dedicated taxes, shown in Table 3.

Table 3: Dedicated tax use categories, FY 2019

A summary of dedicated taxes is reported in the Annual Comprehensive Financial Report (ACFR), as is information on the District’s debt.  In addition to the ACFR, the CFO’s Office of Revenue Analysis prepares a report on dedicated taxes every two years.  In addition, dedicated tax revenue is estimated as part of the official quarterly revenue estimate and details about fund balance, revenue, and use are included in the revenue chapter of the annual budget summary. However, these reports focus on reporting the data and do not evaluate the effectiveness or the continuing need for dedications.

Who Claims the DC Earned Income Tax Credit?

This blog expands on our review, here, of the DC Earned income tax credit (DC EITC) looking at the distribution of DC EITC recipients by income, qualifying children and childless workers, and the geographic location. The benefit is concentrated among working families with dependents earning between $10,000 to $25,000 between 2006 and 2017. Additionally, more than a third of DC EITC recipients live in Wards 7 and 8.

Distribution of Credits by Income

From 2006 to 2017, most (78 percent) DC EITC recipients reported a DC adjusted gross income (DC AGI) of less than $25,000. Recipients with incomes between $10,000 and $25,000 benefitted the most, receiving on average over $1,000 per year in refundable credits between 2006 and 2017. This corresponds to the phase-in range of the program and decreasing at higher income levels with the phase-out range of the program (shown in Chart 2 below using the 2018 DC EITC schedule).

Chart 1: Median EITC by DC AGI 2006-2017

Source: ORA

Chart 2: DC EITC Schedules, 2018

Distribution of Credits Between DC EITC Filers with Qualifying Children and Childless Workers

Of all recipients from 2007 to 2017, those with one or two qualifying children accounted for 76 percent of the credit amount claimed (Table 1). Almost 70,000 children per year lived in households that benefitted from the DC EITC and 52 percent of those children lived in poverty during the same period. Overall, ORA found that about eleven percent of the children of EITC claimants living in poverty were lifted out of poverty because of the local earned income tax credit in the same 11-year period (further analysis of DC EITC benefit and its impact on children can be found in the “Income Security Tax Expenditure Review” Review of Income Security and Social Policy Tax Expenditures 2021 | ora-cfo (dc.gov).

Table 1: Total EITC Filers and Credits Claimed, by Number of Qualifying Children from 2007-2017

Note: ORA analysis of individual income tax data by number of qualifying children from 2007-2017. The total amount of claims by qualifying children do not equal the total claims because it excludes DC EITC recipients with missing information.

Benefits for childless adults expanded in 2014

In 2014, the maximum benefit and income threshold for DC EITC childless workers was expanded, driving an increase in the number of childless workers that claimed the credit by about 33 percent—especially those with incomes between $14,850 (the federal income threshold for childless workers to claim the credit) and $24,254 (DC’s expanded income threshold), allowing childless workers with higher income who were not eligible for the federal credit to become eligible for the DC credit. The maximum benefit was also increased to 100% of federal rather than 40% for other filers with dependents.

Prior to the expansion of the credit, the share of childless workers on EITC averaged about 24 percent in 2013 and 2014, but they only received about 2.7 percent of the total distribution of the credit (Chart 3). As a result of the EITC expansion for childless workers, the share of childless workers as a portion of the total number of households on EITC increased to an average of 36 percent in 2015 and 2016. Additionally, the share of the credit amount received by childless workers significantly increased by over 400 percent to about 14 percent in 2015 and 2016 due to the increase in the share of federal credit from 40% to 100%.

Chart 3: Percent of Childless Population and Claim Distribution Before and After the Expansion (2013-2016)

Source: ORA

The expansion eliminated all tax liability for a higher percentage of EITC recipients without children shown by the upward bump in Chart 4 after the law became effective in 2015. Specifically, the law increased the number of childless workers whose tax liability would be completely removed by the credit by about an average of 3 percent while also decreasing the number of childess workers whose tax burden was partially eliminated by an average of 11 percent.

Chart 4: Percent of DC Tax Liability Covered by DC EITC Before and After the 2014 Expansion

Source: ORA

Distribution of Credits by Ward and Neighborhood

DC EITC recipients living in Wards 7 and 8 between 2001 and 2017 received the largest share of the credit—$278 million in credits or 45.3 percent of the total credit claimed over that period and accounted for the most claims processed. Among recipients in most wards, the most common filing status during the same time was ‘head of household’. In Wards 2, and 3, however, the most common recipient was a single filer (Chart 5 below).

Table 2: Total Number of EITC Households and Credits Claimed, by Ward from 2001- 2017

**Number of households does not equal total because it includes repeat claimants that moved to another Ward between 2001 and 2017. The claimant is therefore captured in both Wards at different time periods.

Note: ORA analysis of individual income tax data. The total credit claimed by Ward does not equal the total credit claimed by all DC EITC recipients because the addresses of some recipients were out of state, missing, or could not be geocoded. 

Chart 5: Percent of DC EITC Filers by Filing Status and Ward

Source: ORA. Note: Head of household filers are unmarried filers with dependents.

Most of DC EITC recipients lived in only 20 of DC’s 74 assessment neighborhoods and claimed 92 percent of the total credit in 2017, as shown in Table 3 below. Nine of the top 20 neighborhoods, all located in Wards 7 and 8, made up 43 percent of DC EITC recipients and accounted for an estimated $275.7 million in credits between 2001 and 2017, or about 45 percent of the total DC EITC during that time with an average claim of about $855 per household per year.

Map 1 below shows the density per square-mile of DC EITC recipients per 1,000 tax filers in 2017. We control for the number of tax filers by neighborhood because some neighborhoods have a higher (or lower) proportion of DC EITC recipients in relation to the total number of tax filers in the same neighborhood. For example, while the Columbia Heights neighborhood is ranked third among neighborhoods with the highest number of DC EITC recipients in 2017 (see Table 3 below), the neighborhood is 18th for recipients as a share of all tax filers. Proportionally, a tax filer in Barry Farms in Ward 8 was almost three times more likely to claim the EITC than a tax filer in the Columbia Heights neighborhood.

Map 1: Neighborhoods by Share of EITC Claimed, 2017

Source: ORA

Table 3: Total DC EITC Claimed by Top 20 Neighborhoods, 2017

Note: ORA analysis of individual income tax data, 2017. The total credit claimed by neighborhood does not equal the total credit claimed by all DC EITC recipients and DC EITC recipients by Ward because the addresses of some recipients were out of state, missing, or could not be geocoded. 

What is this data?

This study used DC individual income and federal individual income administrative tax data from 2001 to 2017. This data is geocoded and provides information on DC EITC claimants including amount claimed, and number of qualified dependents.

Pandemic led to DC population loss, but data suggests population rebound last summer

As has been reported, the U.S. Census Bureau estimated that the District (D.C.), after years of population increases, lost nearly 20,000 people between April 1, 2020, and July 1, 2021. This is not surprising since moves out of the city accelerated after April 2020, when COVID-19 arrived in D.C. Now, nearly two years into the pandemic, are we seeing people return to the city? The data suggests yes. Apartment vacancy data and change of address data from the U.S. Postal Service (USPS) point to the city’s population reaching a low in the winter of 2020/2021, and then recovering to a large extent by the late summer/fall of 2021.

Apartment vacancy data from Delta Associates, which excludes vacancies in newly built units, shows vacancies in the District peaking the last quarter (Oct-Dec) of 2020 and first quarter (Jan-Mar) of 2021, with the increase in vacancy rate most pronounced for newer apartments with amenities (Class A). The vacancy rate then began to drop in 2021 and was below the pre-pandemic rate in the third quarter (Jul-Sep) of 2021. This is a strong sign of population recovery. Vacancy rates in the suburbs remained relatively flat through the pandemic, which perhaps isn’t surprising since our own research and others’ show the pandemic benefited the suburbs in this way.

Data from the USPS, which provides the number of net moves out of the city, show a similar pattern of population loss then rebound. Net moves out peaked above their pre-pandemic levels in September 2020. They then declined but continued above pre-pandemic levels through early spring 2021. In July 2021, net moves out dropped below pre-pandemic levels for the first time, and remained below pre-pandemic levels through October 2021, signaling a gain in population. This likely gain was due to both more people entering the city and fewer people leaving than pre-pandemic. Unfortunately, it is difficult to get an exact count of population recovered using the USPS data because it almost certainly undercounts people returning.(1)

It is possible not all of this population recovery was captured in the latest Census estimate, since the estimate reflects the population on July 1, 2021, and our data indicates recovery was still happening then.

According to USPS data by zip code, the population rebound appears mostly to have been driven by the neighborhoods that lost the most people earlier in the pandemic: those in and near downtown. However, Navy Yard and south Capitol Hill (zip code 20003) had the strongest in-migration numbers in last summer and fall’s USPS data, despite showing middling population loss earlier in the pandemic. This could be due to the large number of new housing units there. Upper northwest (zip codes 20015 and 20012) also appears to have contributed to the rebound, which is somewhat surprising since it had nearly no pandemic population loss in 2020, according to our prior research.

On the flip side, USPS data shows neighborhoods on the eastern edge of the city still had higher out-migration than pre-pandemic when other neighborhoods were rebounding. East-of-the-river zip codes 20019 and 20020 had roughly the same elevated level of outmigration last summer and fall as earlier in the pandemic, though earlier in the pandemic they didn’t have the stark outpouring of people that we saw downtown.

(Note that zip codes 20007 (Georgetown) and 20017 (Brookland) could be showing higher out-migration due to the presence of universities, though we are not seeing similar patterns in other zip codes with universities.)

While the USPS data shows a somewhat uneven recovery among neighborhoods, apartment vacancy data shows vacancy rates very close to or below pre-pandemic levels among all neighborhoods for which we have data.(2) However, it would be possible for us to see pre-pandemic vacancy rates yet a lower population in some neighborhoods, or even city-wide, if household sizes shrunk due to some members of a household leaving and others staying (as may be the case with roommates or inter-generational households.)

There is also the question of whether those who left the city are similar to those who returned. A decline in school enrollment and evidence of moves to the exurbs could mean families were more represented among leavers than they were among returnees. This migration pattern could also lead to low apartment vacancy rates but a lower population than-pre-pandemic due to smaller household sizes.

There are signs the population recovery is slowing or ending, and even if D.C. has made it back to its pre-pandemic population, there is still the risk of low growth or population stagnation moving forward. In November 2021, USPS data showed outmigration returning to 2019 levels, when D.C. had close to zero total migration and negative domestic migration, according to Census, meaning significant population gains could have ended. Other cities faced the same plight pre-pandemic: Boston, New York City, and San Francisco all had negative domestic migration in 2019, but places like Austin, Raleigh, Denver, and the D.C. exurbs were attracting people and continue to do so. In fact, there were several reports noting that the pandemic increased moves to places already attracting people. Telework of course remains the big wild card; if it continues at substantial levels post-pandemic it could change not only the number of people who live in D.C. but the types of people who choose to live here.

End Notes

(1) The USPS data counts international moves out, but not in, which are typically a substantial portion of migration to D.C. The absence of international moves in will almost certainly lead to an undercount of people returning, even after normalizing the pandemic data by comparing it to pre-pandemic data.

(2) Delta Associates shows the following stabilized vacancy rates (rates that exclude new units) for D.C. neighborhoods:

*Note that while Cap Hill/Riverfront/SW shows slightly higher than pre-pandemic vacancies, this area had the highest apartment absorption city-wide in 2021, which is not reflected in the stabilized vacancy rate in the above table.

The Class A and B neighborhood data shown above from Delta Associates does not include data for neighborhoods east of the Anacostia River. However, CoStar data shows vacancy rates in “Anacostia Southeast” have dropped to pre-pandemic levels (from 7% in 2019 Q3 to 6% in 2021 Q3).

CoStar data also shows that Class C apartment vacancies city-wide dropped to pre-pandemic levels in 2021 Q2.

Brief Overview of DC EITC

The DC Earned Income Tax Credit (DC EITC) was created as an add-on to the federal earned income tax credit to encourage work, reduce poverty, and provide additional tax relief to low-income taxpayers, especially those with dependent children in the District. In TY 2017, 62,513 Washingtonians claimed about $57 million in earned income tax credits in addition to $122 million in federal EITC. ORA recently released a detailed analysis of the DC EITC in our “Review of Income Security and Social Policy Tax Expenditures” Review of Income Security and Social Policy Tax Expenditures 2021 | ora-cfo (dc.gov). The following is the first of a series of DC EITC blog posts that summarizes the descriptive analysis provided in that report.

Chart 1: Total Federal and DC EITC by Year with DC EITC Effective Amendment Dates

Source: ORA. Note: The data labels refer to the years the DC EITC changes became effective

To claim the EITC, tax filers must meet the eligibility requirements instituted by the federal government. The most recent 2020 federal eligibility requirements were as follows:

  • Investment income received must be $3,650 or less for the year, and a federal adjusted gross income of less than:
    • $15,820 ($21,710 married filing jointly) with zero qualifying children
    • $41,756 ($467,646 married filing jointly) with one qualifying child
    • $47,440 ($53,330 married filing jointly) with two qualifying children
    • $50,594 ($56,844 married filing jointly) with three or more qualifying children
  • Maximum federal credit amounts:
    • $538 with no qualifying children
    • $3,584 with one qualifying child
    • $5,920 with two qualifying children
    • $6,660 with three or more qualifying children

If qualified, the tax filer can claim 40 percent of the federal credit for families with qualifying children. In 2014, DC expanded the EITC childless workers to be at least 100 percent of the federal credit and a wider earned income range (chart 2). The expansion allows more tax filers to receive more of the credit. For example, in tax year 2020, the federal EITC began its phasing out for single childless workers with income at about $8,800 ($14,700 for married filing jointly) and ran out at income over $15,820 ($21,710 for married filing jointly). However, the DC EITC allows filers to claim  the full federal credit (not just 40%) and extends the income to get the maximum credit from $8,800 for single childless workers ($14,700 for married filing jointly) to $19,489 for both groups and phases out until it runs out when income reaches $25,833 for both married and unmarried tax filers (dashed line in chart 2).

Chart 2: DC EITC Schedule, 2020

Based on our review of administrative tax data, between 2010 and 2017, on average 60,141 filers claimed $952 in benefits each year, with the majority earning incomes between $10,000 to $25,000 per year, shown in Table 1. This illustrates the broad impact of the program despite strict eligibility limits that target low-income families.

Source: OCFO/OTR

By design, the DC EITC has helped reduce poverty in the District and in 2017 about 10 percent of households with children and an estimated 3.9 percent of childless workers claiming the credit were elevated out of poverty: 1,874 filers (with 3,386 children) and 489 childless adults. Our Review shows the DC EITC is meeting the goal set by the DC Council of reducing tax burdens for low-income workers when the legislation was enacted and has lowered the average tax and effective tax rates for its claimants compared to tax filers with the same income and reference income level not claiming the credit.

Our analysis also highlights some areas where the credit could be improved. To obtain better results and improve accountability, ORA finds that the DC EITC could be amended in a variety of ways including addressing the marriage penalty that exists for childless workers, going after tax preparers for fraudulent returns, providing more resources for outreach and supporting the Office of Tax and Revenue’s (OTR) efforts to reduce fraud. Please see our complete analysis for further detail.

What is this data?

This study used DC individual income and federal individual income administrative tax data from 2001 to 2017. This data is geocoded and provides information on DC EITC claimants including amount claimed, and number of qualified dependents.

The District has More Total Homeowners but Fewer Senior Homeowners

Senior Homeowners: A Waning Segment of the District’s Housing Market

In many regards, the District of Columbia economy has fared well over the past 20 years. It has grown in both income and jobs, renter- and owner-occupied housing, and in the number of young and older residents. Consequently, the District now has a housing affordability crisis that is contributing to many residents leaving the city (see here). Still, we maintain the goals of attracting new residents and retaining existing ones of all socio-economic backgrounds even as we grapple with daunting affordable housing challenges. Thus, it is important not to overlook a small but important segment of our housing market: senior homeowners (see here for full paper).

Since 2002, the city lost 23 percent of its senior homeowners, while other homeowners (less than 65 years of age) increased by 37 percent. The vast majority (75.5 percent) of the reduction in senior homeowners occurred in Wards 1, 4, 5 and 6, even as the majority (78.5 percent) of the increase of younger-aged homeowners occurred in these same four wards. All of the major causes of the net decrease in senior homeownership are not yet clear, but it appears that the Senior Credit by itself (equal to half of the annual real property tax bill of senior homeowners) has not provided an incentive to forestall the reduction in new senior homeowners in recent years (see here and here for OTR Real Property Tax Credits).

Homeownership & Homesteads in the District of Columbia

Compared to rental housing, homeownership is thought to provide an increased sense of stability and financial security. For many, homeownership is an investment that boosts household wealth through equity and appreciation over time, especially if the homeowners eventually sell the property, realizing the gain.

Since 1978, the District of Columbia government has helped lower the cost of homeownership via its Homestead Property Tax Deduction. This annual deduction is given to eligible residential owner-occupied properties that are the principal residences of their owners/applicants (referred to as homesteads). The deduction reduces a home’s annual assessed value (by $76,350 in 2021) and makes respective properties eligible for capped annual growth in the taxable value to 10 percent (5 percent for residents 65 years of age or older or disabled). Seniors and disabled also can claim the Senior Credit, which lowers the final annual real property tax bill of these senior homesteads by 50 percent. In addition to being a homestead owner who is a senior or disabled, the credit also requires everyone living in a respective property to have a combined federal adjusted gross income of $135,750 or less in 2021.

Figure 1 shows an example of the layering of real property tax relief for a hypothetical senior citizen homeowner in 2021. The figure assumes a senior citizen purchased a home in the city in 2020 for $400,000 and the property assessment value increased by 25 percent in 2021. In sum, the example illustrates how the senior homesteader pays just 40 percent of the $4,250 tax liability, a reduction of $2,530  (see Appendix in Full Paper for calculation of tax liabilities in Figure 1).

Figure 1  

  

An Overview of the District’s Growth Since 2000

The District of Columbia has experienced impressive growth in its economy and demographics over the past two decades. Figure 2 shows that the total earnings of all District residents and the average income per household more than doubled in 2020 compared to 2000, And even though there has been a notable boom in construction in multifamily housing since 2009 (see here), there also are 36,048 (16.9 percent) more owner-occupied housing units (Figure 3). Furthermore, there has not only been a 39.5 percent increase in the number of residents age 25 to 44-years old, but also a 19.7 percent increase in residents 65 years of age or older.

Figure 2

Source: Office of the Chief Financial Officer/ Office of Revenue Analysis

Figure 3

Source: U.S. Census Bureau/American Community Survey

Homesteads in the District of Columbia by the Numbers

According to District property tax records, there were 84,095 homesteads in 2002 and 101,092 in 2019 (Figure 4), a 20 percent increase. Over this time period, non-senior homesteads increased by 22,319 (37.0 percent), while the number of senior homesteads decreased by 5,322 (22.5 percent) (Figure 5). As a result, the share of senior homesteads decreased from 28.2 percent in 2002 to 18.2 percent in 2019.

Figure 4                                                                

Figure 5

The assessed market value of all homesteads practically quadrupled from $17.6 billion in 2002 to $69.4 billion in 2019 (Figure 6). And, notwithstanding having 5,322 fewer senior homesteads in 2019, the assessed market value of all properties claiming senior homesteads more than doubled as of 2019 (Figure 7).

Figure 6                                                                

Figure 7

Of the $125.7 million in real property taxes collected from homesteads in 2002, senior homesteads accounted for only 11.4 percent of the total (Figure 8). Also, despite collecting $17.5 million more in real property taxes from senior homesteads in 2019, the $31.8 million collected was only 6.8 percent of the $467.7 million collected from all homesteads in 2019 (Figure 9).

Figure 8                                                                

Figure 9

Figure 10 shows that there were more non-senior homesteads in every ward in 2019 than in 2002, but less senior homesteads in all wards except Ward 8. Over the study period, Wards 1, 4, 5 and 6 accounted for 78.5 percent of the net increase in total non-senior homesteads, but the same wards accounted for 75.5 percent of the net decrease in senior homesteads.

Figure 10            

The Senior Tax Credit: Ambiguous Effects

According to the U.S. Census Bureau, homeownership in the District of Columbia grew 14.5 percent between years 2000 and 2019. But despite both the growing economy and population (including residents 65 years and older), homeownership among the District’s senior citizens decreased by 22.5 percent even as non-senior homesteads increased by 37 percent. And while the senior real property tax credit effectively reduces the annual real property tax bills of all senior homesteaders by 50 percent (with some senior tax bills as low as $633 in 2019), it does not appear that the credit by itself led a considerable amount of new seniors from across the city to join the program.

What’s this data?

This analysis is based on District of Columbia real property annual tax data for years 2002 to 2020. Demographic data is from the U.S. Census Bureau, and economic data is from the Office of the Chief Financial Officer/Office of Revenue Analysis.

D.C. lost at least 17,000 more people during the pandemic than in the prior year, according to USPS data on net moves. At least 9,000 of the loss appears to be permanent.

When the pandemic restrictions were put in place last Spring, there was plenty of anecdotal evidence that people were leaving D.C. as white-collar workers became remote, others were laid off, and schools shut down. Data from the United States Postal Service (USPS), which records changes of address, provides a clue as to how many people left D.C. and where they went. This data gives us an insight into peoples’ housing choices when work and school are decoupled from where you live, something important to understand if an increase in remote work extends beyond the pandemic.

The USPS data clearly shows more people moved out than in during 2020 than 2019, with moves accelerating after COVID-19 restrictions began in March 2020. In 2019, USPS recorded 11,480 net moves out of the city, while in 2020 that number increased to 29,362, an increase of 17,882 net moves out (or 2.6 times more).(1) Net moves out is the number of moves out of the city that exceed the number of moves in and is a proxy for population loss. The number of moves reflects change of address forms filed by both individuals and families.(2) While there was some decrease in the number of moves into DC in 2020, about 90% of the increase in net moves out of the city results from additional people moving out of the city.(3)

Not all of the moves in 2020 were permanent. When someone submits a change of address form they mark the move as permanent or temporary(4) and the data clearly shows a higher portion of moves than usual were temporary in 2020. Out of the increase of 17,882 net moves out between 2019 and 2020, we estimate 9,335 were permanent and 8,547 were temporary.(5)

The data shows more people moving out of the city than into it in both 2019 and 2020, despite the decennial Census count showing strong population growth between 2010 and 2020. However, D.C.’s population increase from moves within the United States has steadily decreased the last several years, and 2018 and 2019 IRS data and 2019 and 2020 Census population estimates show D.C. lost more people to other parts of the country than it gained. The last couple years, any population increase in D.C. has been entirely driven by births and international migration, according to these estimates.

The USPS data includes at least some, perhaps even most, moves out of D.C to international locations,(6) but does not include moves in from international locations. While USPS tells us that the number of international moves in the dataset for the nation as a whole, from which we extracted data for D.C., is “insignificant”, international migrants make up a sizeable portion of people moving to and from the District. The absence of incoming international moves in the USPS data likely leads to an overcount of net moves out of D.C. each year, but the increasein net moves out between 2019 and 2020 (roughly 17,000, or 9,000 permanent) will not be overcounted unless international migration into D.C. increased between 2019 and 2020, which seems unlikely due to the pandemic. In our end notes we adjust the USPS data with estimates of the missing international moves and take into account families being counted as only one mover to illustrate how the USPS data might translate into net numbers of people moving out of D.C. in 2019 and 2020.(7)

What parts of the city did people leave?

The zip codes close to the downtown core, especially those close to the west end of downtown, appear to have had the biggest population loss during the COVID-19 period, even when accounting for population differences between zip codes. The map below shows this pattern. Specifically, it shows the increase in net outmigration from March-December 2019 to March-December 2020, per every 1,000 residents in each zip code.

The zip codes with the largest population loss due to COVID-19 were 20036 (south side of Dupont/Golden Triangle), 20009 (Adams Morgan, Columbia Heights, 14th/U St NW, Dupont), 20024 (Southwest Waterfront) and 20005 (south side of Logan Circle/Franklin Square). All of these zip codes had at least 60 more net moves out per 1,000 people in Mar-Dec 2020 than Mar-Dec 2019.(8) To put those numbers in perspective, 20009, the largest zip code of the bunch with about 52,000 people, lost about 1,700 people from Mar-Dec 2019, even after accounting for people moving in. That number increased to 5,500 people from Mar-Dec 2020. These zipcodes have relatively high numbers of multifamily buildings, indicating that perhaps apartment dwellers were more likely to relocate during the pandemic than those in single family homes.

Which zip code fared the best during the pandemic? Zip codes 20012 (Shepherd Park, Takoma) and 20015 (Chevy Chase, Friendship Heights, Barnaby Woods) had nearly no change in migration between Mar-Dec 2019 and Mar-Dec 2020. In fact, zip code 20015 was the only one where USPS data showed more residential moves in than out during both time periods.

Where did people go?

The data we received from USPS on the destinations of people moving from D.C. was highly redacted for privacy reasons, limiting the conclusions we can make. (This data was received via Freedom Of Information Act (FOIA) request, whereas the data used for the graphs above is publicly available.) Still, with the data we have, we can see that a large portion of movers–at least 31%, but likely many more–moved to another location within the D.C. metro region between March and December 2020. This aligns with other research(9) showing a large majority of moves during COVID-19 were not to far-flung places but instead to locations within the same metro region.

Moves to the D.C. suburbs

For moves within the D.C. metro region, we had a complete dataset for 10 zip codes located in the close-in suburbs of Bethesda, Chevy Chase, Oxon Hill, Silver Spring, Alexandria, and Arlington. This data shows that in a typical year (Mar-Dec 2019), D.C. lost more people to these zip codes than it gained from them. In 2020 this trend accelerated. From Mar-Dec 2020 these suburban zip codes gained, on net, 3 times as many people from D.C. than during the same period in the prior year. (Net moves is the difference between moves in and out).

We can expand the suburban zip codes for which we have complete data if we look only at moves out of  D.C. to the suburbs without accounting for people moving from the suburbs to D.C. Looking at only moves out from D.C., we see that suburbs to the north and west of the city seemed to have had the largest increases in moves from D.C. during the pandemic (Mar-Dec 2020) compared to a year prior (Mar-Dec 2019). The Bethesda zip code of 20817 recorded the highest percent increase in moves from D.C. (63%). That zip code received 246 movers from D.C. between March and December 2019 and 400 between March and December of 2020.

The other zip codes to have an increase in movers from D.C. of 50% or higher during the pandemic were 22203 and 22206, both in Arlington.

Moves out of the D.C. region

The redacted USPS data only shows moves from D.C. to places outside the D.C. region for destination zip codes that received more than 10 people from D.C. in a single month. Because this data only shows a relatively large number of people moving from D.C. to a particular place at a particular time, we refer to these moves as “high volume moves.” The USPS data shows 1,608 high volume moves from D.C. to places outside the region between March and December 2020 and 673 of these moves during the same period in 2019.

One distinctive feature of high volume moves in the data we reviewed is that there were simply more high volume move destinations in 2020 than 2019 for locations outside the D.C. region. The map below shows the high volume move destinations outside the region in Mar-Dec 2020 that were not high volume destinations in Mar-Dec 2019. The big surprise from the data is the Delaware beaches were in the top destinations in 2020.

Columbia, MD, and Charlottesville, VA, were the next most common destinations outside the region after Rehoboth Beach and Lewes, DE, that had high volume moves in Mar-Dec 2020 but not Mar-Dec 2019. Notably, these are both small to mid-sized cities not too far outside the boundaries of the D.C. metro region. Annapolis and Baltimore were the top high volume move destinations in both 2020 and 2019.

Moves within the District

In addition to capturing moves in and out of the city, the USPS data shows moves within D.C. The number of moves within the city is close to the number of moves out of the city. From Mar-Dec 2019 USPS data shows 43,074 intracity moves. During the same period in 2020 there were 49,632 intracity moves.

As the map below shows, the general pattern of intracity moves is for people to move from neighborhoods close to downtown, especially those to the north and west of downtown, to outer neighborhoods. Areas east of the Anacostia River also lose residents to other parts of the city. The pattern of people moving from downtown to outer neighborhoods strengthened during the pandemic.

From Mar-Dec 2019 the neighborhoods that lost the most residents to other parts of the city were 20005 (south side of Logan Circle/Franklin Square), 20036 (south side of Dupont/Golden Triangle), 20037 (West End, Foggy Bottom), and 20001 (LeDroit Park, Shaw, Mt Vernon Triangle), all of which had a net population loss of more than 10 movers per 1,000 residents to other parts of the city. Zip codes 20005 and 20036 had the highest loss at 33 and 32 movers per 1,000, respectively. The zipcodes that gained the most population from intracity moves during this time were 20018 (Brentwood, Langdon, Woodridge, Fort Lincoln), 20017 (Brookland), 20015 (Chevy Chase, Friendship Heights, Barnaby Woods), and 20003 (Navy Yard, south side of Capitol Hill). These zip codes had net gains ranging from 11 to 17 movers per 1,000 residents, with 20018 gaining the most people.

Migration patterns within the city looked much the same during the height of the pandemic (Mar-Dec 2020). The differences that stand out are that during the pandemic several of the zip codes that had gained people in 2019 gained even more people, especially 20003 (Navy Yard, south side of Capitol Hill) and 20015 (Chevy Chase, Friendship Heights, Barnaby Woods), which saw the largest increases. Likewise, many of the zipcodes that lost people in 2019 lost even more during the pandemic. Zip codes 20036 (south side of Dupont/Golden Triangle) and 20009 (Adams Morgan, Columbia Heights, 14th/U St NW, Dupont) had the biggest jumps in movers lost per 1,000 residents. Notably, zip code 20008 (Connecticut Ave. corridor) went from losing people pre-pandemic to gaining people during the pandemic.

It may come as a surprise that zip code 20003, which includes Navy Yard, a neighborhood with many multifamily buildings, had the largest influx of people from other parts of the city during the pandemic, since other areas with a lot of multifamily housing had some of the largest population losses. New apartments coming online and offering incentives for moving in may be why Navy Yard and adjacent areas were able to attract so many residents from other parts of the city.

Note: zip codes 20004, 20006, 20052, 20057, and 20064 do not appear in the table due to insufficient data
Source: D.C. OCFO analysis of USPS change of address data obtained through a FOIA request

Will people return?

The question policymakers across the country are asking is will people return to cities they left during the pandemic. Presumably those who filed a temporary change of address request will return, as well as some who left temporarily but filed a permanent move, such as apartment dwellers returning to a different unit. For those who truly moved permanently, it remains to be seen if the city can attract people to replace them, something that could depend on telework policies post pandemic. The good news is that as of May 2021 the USPS data shows net moves out of the city have returned to 2019 levels. But for the city to regain the population it lost, we would need to see an influx of residents into the city at levels we have not seen in several years.

-Ginger Moored, Fiscal Analyst

Thank you to Susan Steward for sharing her knowledge of the FOIA process and to Norton Francis, Lori Metcalf, Daniel Mohammed, and Steve Swaim for their edits and feedback.

End Notes

(1) USPS redacted data for zip codes with 10 or fewer moves of individuals or families in a given month. While the vast majority of data was left intact, a few smaller zip codes had data redacted for a few months. To test the accuracy of our conclusion that moves in 2020 were 2.6 times those in 2019, we redid the analysis excluding all data for zip codes where some data was missing. That analysis shows 2020 moves were 2.5 times higher than those in 2019.

(2) Families can file a single change of address form for multiple people if all of those people have the same last name and have the same origin and destination. Most change of address forms filed in D.C. are for individuals.

(3) The table below shows the data behind our net move calculations.

(4) A temporary move is valid for up to six months and can be renewed for up to another six months; USPS confirms that renewals are not counted in the data and temporary moves converted to permanent moves are not counted twice.

(5) The USPS dataset gives the percentage of all moves, including business moves, that were temporary and permanent. To estimate the number of permanent residential moves, we applied this percentage to residential moves only. Residential moves greatly outnumber businesses moves in the data. It is possible that some people who filed a permanent move do have plans to return to the city; for instance, a renter who left temporarily might have filed a permanent move since they would be moving back to a different apartment unit upon return.

(6) While domestic movers can file a change of address online, international movers must print out a paper form and bring it to their local post office, which could have an effect on the number of forms filed by international movers. USPS accepts change of address forms for people moving from the U.S. to another country, but not for people moving from another country to the U.S.

(7) Census PUMS data shows an estimated 10,606 people moving from an international location to D.C. in 2019. If we add these people to the USPS data for both 2019 and 2020 and assume all families counted in the USPS data have two family members, the net number of people moving out of D.C., or population loss due to moves, would be 2,881 in 2019 and 23,555 in 2020, meaning D.C. lost an additional 20,674 people in 2020. Adjusting for redacted data in the USPS dataset (see End Note #1) would bring that loss down to approximately 19,443 people (12,898 permanent). The actual loss will be higher if the average USPS “family” has more than 2 people and if international migration to DC in 2020 were less than in 2019.

(8) Downtown zip codes 20004, 20005, and 20036 had insufficient data on moves of families due to the low number of these types of moves. Therefore, data for these zip codes in the map “DC Zip Codes that Lost the Most People” reflects only moves of individuals. Data for all other zip codes reflects moves for both individuals and families. Limiting the data in this way did not change the ranking of the top four zip codes with the largest increase in moves out mentioned in our narrative, nor did it change the conclusion that they all had an increase of at least 60 net moves out between Mar-Dec 2019 and Mar-Dec 2020.

(9) See “More Americans Are Leaving Cities, But Don’t Call It an Urban Exodus”, published by Bloomberg CityLab (Patino, Kessler, Holder, Gu, and Rojanasakul) on April 26, 2021, available here: https://bloom.bg/2TLvvDC

What exactly is this data?

The number of net moves out of D.C., including the number of net moves by D.C. zip code, comes from a publicly available dataset on the USPS FOIA (Freedom of Information Act) website. You can access that data here. This dataset separates moves into three categories: business, family, and individual. This analysis looks only at residential moves, which is the sum of family and individual moves. A move is counted as a family move if one form is submitted for multiple people with the same last name. Individual moves are filed for just one person. The data also separates moves into those that are temporary and permanent. A temporary move is valid for up to six months and can be renewed for up to another six months; USPS confirms that renewals are not counted in the data and temporary moves converted to permanent moves are not counted twice.

D.C movers’ destinations and intracity moves by zip code come from a dataset the Office of Revenue Analysis obtained through a FOIA request for USPS data. You can access that data here. This dataset includes residential moves only but does not separate out moves into individual and family or temporary and permanent.

The “D.C. metro region” refers to the Core-Based Statistical Area (CBSA). We matched zip codes to the D.C. CBSA using a crosswalk available on the website of the U.S. Department of Housing and Urban Development. The crosswalk is available here.  

Zip code populations come from the 2019 5-year American Community Survey data published by the Census Bureau. That data can be accessed here.