In the last 5 years DC added 180 new apartment and condominium buildings with 22,348 units

The new units are essential to DC’s ability to absorb a growing population, but they are not the whole story

From 2012 to 2017 DC’s inventory of apartment and condominium housing units grew by a net of 22,348 according to CoStar, a real estate information firm that tracks developments in the District and many other locations. This 13.7% increase in housing units is a major element in the growth of DC’s population over that time, a relationship that will be looked at shortly. But first, a few details on the recent changes to the District’s stock of apartment and condominium units.

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table 1

  • Of the 22,324 net increase in units, 20,128 (90.1%) were in 95 apartments and 2,196 were in 84 condominiums. The average size of condominium buildings was much smaller, 26 compared to 212 for apartments. Condominiums therefore accounted for 47% of the buildings, but just 10% of the units. (In 2017, condominiums accounted for about 19% of the combined total multifamily units— condominium, apartment, and co-op—in the city.)
  • The number of new units delivered over the five years was 23,099, but 775 units, about one-half percent of DC’s stock of multifamily housing in 2012, were demolished or otherwise went out of existence.
  • The number of vacant apartment units increased by 2,374 over the past 5 years, and the vacancy rate rose from 6.5% in 2012 to 7.3% in 2017.
  • New construction at the end of 2017—11,179 apartment units and 1,614 condominium units—essentially continues the pace of recent development activity. It will take two or more years for all of this existing construction to deliver new units to inventory, and the amount of this new construction is more than half of the net increase in units that occurred over the previous 5-year period of 2012 to 2017. For apartments current construction is 56% of the prior 5 year net increase in units, and for condominiums the percentage is 74%.

Detail for each of these points are in the tables in Appendix 1.

Apartments, condominiums, and DC population dynamics

The number of occupied apartment and condominium units grew by 19,930 from 2012 to 2017. This is almost 2,400 less than the 22,348 net increase in inventory, but in percentage terms the gain in occupied units—12.9%—was greater than that of population over that time (9.2%).

table 2

table 3

Newly occupied apartment and condominium units clearly represent a major element in the demographic changes occurring in DC. Available data does not, however, make it possible to know exactly how much of the 58,342 growth in DC’s population from 2012 to 2017 was accommodated by the net increase in occupied apartments and condominiums described in the CoStar data. A judgment on this depends on the additional number of households associated with the increase in population—and this can only be estimated.

Definitions further complicate the task of trying to compare Census and CoStar information. For the Census Bureau, a household is equivalent to a housing unit occupied by DC residents. The resident household can be a single person, a small family, a large family, or a group of unrelated persons who share the unit. To be classified as occupied by CoStar, however, a unit need not only be occupied by a DC resident household (as defined by Census). Occupied units from the point of view of a property owner can also involve second homes, short-term rentals, corporate accommodations for employees and guests, units in transition waiting for a new owner or tenant to move in, or ones undergoing repairs. The growth in occupied units as defined by CoStar can thus easily exceed the increase in households as defined by Census.

That said, a reasonable place to start in connecting population increase to change in apartment and condominium occupancy is with the Census. In 2000 the ratio of population to households was 2.30, a ratio which fell to 2.27 in 2010. In that decade, the number of households grew faster than population (7.4% compared to 5.8%), and the ratio of the increase in population to the increase in households was only 1.80, suggesting that one of the features of population growth at that time was small households.

What of the period between 2012 and 2017? Was the increase in small households so great that the number of households grew faster than population, and the population/household ratio continued to get smaller? Or did population grow faster, resulting in a rise in the ratio? Among the factors contributing to this latter result would be more children and more people doubling up due to affordability issues.

Assumptions about an appropriate population/household ratio makes a big difference in assessing how many new households population growth has brought—and how much of that growth was accommodated by occupancy growth in apartment and condominium buildings. As noted above, the 2010 average population/household ratio was 2.27. That ratio applied to population growth over the 2012 to 2017 period yields an estimated growth in households of 25,701, a number that exceeds CoStar’s estimate of the increase in occupied units by 5,771.

The 2012-2016 American Community Survey 5 year estimate pegs the population/household ratio at 2.38. Applying that higher ratio gives 4,583 as the amount by which household growth exceeded the increase in occupied units. With ratios a little higher or lower than these averages new household growth exceeds the growth in occupied units. Only if the population/household ratio rises to 2.93 does the new household estimate equal that for the growth in occupied units. Under a range of plausible assumptions it appears likely that the District of Columbia added more households over the past five years than could live in newly occupied units in new apartment and condominium buildings. If this is the case, this means that other components of the housing stock—structures with four or less units—must have been able to absorb some of the increase in population.

table 5

Taken as a whole, the DC housing stock does provide room to accommodate some of the growth in population in units other than those in new apartment or condominium buildings. The Census Bureau’s American Community Survey estimated that for the 5-years 2012 through 2016 there were 306,711 housing units in DC, and that 160,750 (52.4%) of those units were in structures with 5 or more units. In other words, almost half of DC’s housing stock is in smaller buildings. Over the past 5 years more than 1,000 permits have been issued for projects with less than 5 units, and many smaller buildings can be reconfigured to accommodate more units.

table 4.PNG

In this connection, in the prior 5 year period— 2007 to 2012—larger buildings appear to have played a smaller role in accommodating population growth than in the most recent five years. From 2007 to 2012 Co-Star’s estimate of occupied units grew more slowly than population (6.9% versus 10.7%). The ratio of new population to the estimated increase in occupied apartments and condominiums was 6.1. (See Appendix 2. for more details.)

table 6

With the current pace of construction for apartment and condominium buildings much like that of the past few years, multi-family apartment and condominium projects will undoubtedly provide the largest share of the additional housing needed for DC’s growing population—provided, of course, that a sufficient number of households can afford to live in them. But the connection between increases in population and changes in the housing stock is a complex one, and DC’s changing demographics involve more than simply building large new apartment and condominium buildings for new people.

Appendix 1

Gross and net changes to inventory.

table 7

Apartment share.

table 8

Vacant units.

table 9

New construction.

table 10

Appendix 2

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About the data. Data on DC multi-family housing buildings and units are for apartments, condominiums, and co-operative apartments of all classes in structures with 5 or more units as reported by CoStar, a real estate information company. The data was accessed toward the end of April. Population data and data from the American Community Survey are from the US Bureau of the Census. The housing and population data are all subject to revision by the source as more information becomes available.

This analysis looks solely at the statistical relationships between changes in DC population, households, and housing units.  It does not address issues related to affordability or homelessness.

An earlier version of this blog was included in the April 2018 District of Columbia Economic and Revenue Trends report issued by the Office of Revenue Analysis of the District of Columbia Office of the Chief Financial Officer.

 

 

The Rise of the Premium Apartment Rental Market in the District of Columbia

Although the District of Columbia’s population is growing continuously since 2006, the city’s housing stock is growing at a slower rate (Figure 1). Since the Great Recession, this slower rate of annual growth in the housing stock is likely due in part to accelerating land and construction costs per square foot, the decreasing supply of available land lots, zoning, and the lack of preservation of family-sized housing units. Consequently, the city’s housing vacancy rate, which used to exceed 10 percent is currently approaching six percent (Figure 2). In other words, roughly 94 percent of the city’s housing units are occupied, whereas in earlier years it was closer to 90 percent. These factors have profound implications on how certain housing market sectors are evolving.

 Figure 1

Figure 1

Figure 2

Figure 2

 

 

 

 

 

 

 

 

When ranked among the states, the District of Columbia’s home ownership rate of 39.8 percent was the lowest in the nation as of the fourth quarter of 2017, according to the U.S. Census Bureau[1]. (New York and California had the next lowest rates of 51.1 and 55.1 percent, respectively.) One of the many reasons for this is likely the high cost of homes and home-ownership in the city. In 2000, half of the homes purchased in the city were priced below $178,250. But, with the median single-family home price nearly quadrupling by 2017, half of the homes purchased in the city were priced above $690,000, (Figure 3). On average, the median sale price for homes in the city increased 8.3 percent per year, while the consumer price index for the Washington area only grew on average by 2.3 percent a year over the same period.

Figure 3

Figure 3

Additionally, the number of single-family home and condo sales have grown at an average annual rate of 4.9 percent between years 2009 and 2017 (MRIS[2]). But since the city’s population has increased by an average of 15,653 people (2.5 percent) every year since 2010 (U.S. Census Bureau), a key factor in the city’s robust residential development simply appears to be population growth. Home ownership rates and population levels between 2010 and 2017 are shown in Figure 4.

Figure 4

Figure 4

For the many residents who choose to avoid a down payment and closing costs of tens of thousands of dollars on the purchase of a new home in the city, renting is the preferred housing option. Between the years 2013 and 2017, the city added over 4,200 multifamily units per year on average, in premium buildings (Class A and Class B) alone, to help accommodate the growing population (Figure 5).

Figure 5

Figure 5

In 2017, the average effective rent for a one-bedroom apartment in the city was $2,184 and $1,834 for a studio apartment (Figure 6). And, while these rental rates may be unnerving to some, rental rates have generally grown over time in line with the area’s consumer price index, unlike the prices for newly purchased homes.

Figure 6

Figure 6

Despite the very high expense of buying and owning a home in the District of Columbia, the number of single-family home and condominium sales have grown at a healthy average annual rate of 4.9 percent between years 2009 and 2017. But residential property developers, on the other hand, delivered apartments in new Class A and Class B buildings at an even healthier average annual rate of 14.1 percent during the same period. With respect to all relevant city trends, the premium apartment rental market appears to be the more popular and ascendant sector of the city’s housing market.

[1] https://www.census.gov/housing/hvs/data/rates.html

[2] Metropolitan Regional Information Systems, Inc.

New income and labor force data give a more positive 2017 year-end picture of DC’s economy

Although federal jobs are declining, income is rising, the job structure is more diverse, and unemployment is falling

In March the US Bureau of Economic Analysis (BEA) released its estimate of income in the District of Columbia for the last quarter of calendar year 2017 along with revisions to the prior three quarters of 2017. Also in March, the US Bureau of Labor Statistics (BLS) revised labor force data for the past several years for wage and salary jobs located in DC and employment of DC residents. Taken together, these new data provide a more positive picture of the District’s economy as the year drew to a close.

  • Income growth for DC residents is increasing.
  • Resident employment is rising and unemployment is falling.
  • Other sectors are picking up some of the slack in jobs and income from weakness in the federal sector.

Income in DC. The change in income is particularly striking. From the previous estimate it appeared that DC’s Personal Income growth was continuing to slow down in the 3rd quarter of 2017, falling to a rate of 2.2%. The new data raised the 2017.3 rate to 2.8%, which then jumped to 3.8% in the 4th quarter. Instead of a picture where income growth in the District continued to slow while the US increased at a faster rate, now DC’s Personal Income growth is estimated to be growing much closer to the national average.

graph 1

 

graph 2a     graph 2b    graph 2c

For DC residents, the turnaround is more pronounced for wages and salaries, which grew an estimated 5.5% in the 2017.4 quarter. This growth is consistent with recent collections for the withholding portion of DC’s individual income tax which have been very strong. For in the last quarter of 2017 those collections were up about 10% over the prior year. (It should be noted, however, that taxable DC income includes things like capital gains that are not captured in the income statistics; also, the recently enacted federal tax law complicates year-over-year withholding comparisons because, for example, some bonus payments may have been accelerated into 2017 that might otherwise have been paid in early 2018 so that corporations could reduce their 2017 corporate profits subject to 2017’s higher rates.)

graph 3.PNG

Changes in commuting patterns do not explain the recent upsurge in the wages of DC residents—in other words, DC residents are not capturing a greater share of the income earned in DC. To the contrary, the new data show that the commuter share of income earned in DC appears to have risen even faster than that earned by DC residents. Thus, in the 2017.4 quarter DC resident earnings grow by 4.1% while those earned by all persons working in DC rise 5.2%. This is a change from 2016 when resident earnings, though slowing down, still grew faster than all amounts earned in DC. (Earnings by this measure include proprietors’ income and benefits as well as wages and salaries, and the earnings of DC residents include amounts earned in the suburbs.)

table 1graph 4

 

 

Resident employment is rising and unemployment is falling. The new data show that resident employment increased by 1.5% from 2016.4 to 2017.4, no doubt a contributing factor to rising incomes of DC residents. The recent revision to the labor force data made a modest change to the end of year level of resident employment (a 0.3% increase of 976). The revision made a substantial change, however, to the picture of unemployment in DC. Whereas before it appeared that unemployment had increased by 1,479 from 2016 to 2017, the new data shows that it fell instead by 391. The primary reason for the decrease in unemployment, however, is that the revision reduced the amount of growth in the labor force while making little change in resident employment.

table 2

Picking up the slack. Revisions to the employment data made no material change in the number of jobs in DC at the end of the year (797,667, 200 less than previously estimated), or to the amount and rate of change (a 1% increase of 7,800, 133 more than previously estimated). The new data shows, however, that the federal sector lost 3,433 jobs from 2016, a 1.7% decline. Similarly, although federal wages grew by 3.1% from 2016 to 2017, this rate was little more than half that for the economy as a whole (5.7%). Although still by far the largest sector in the District’s economy, over the past year the federal civilian share of jobs slipped to 24.8% and its share of wages slipped to 30.5%.

table 3    table 4.PNG

table 4table 6

One of the positive elements in the new employment and income data is the extent to which other sectors of the economy seem to have picked up some of the slack resulting from weakness in the federal sector. On the job side, all other sectors of the economy grew 1.9%, faster than the US average of 1.6% for all non federal jobs. Wages of all other sectors of the economy grew 7.0%, faster than the US average of 4.7% for all non-federal wages and salaries.table 7.PNG

The new data show a shift in the composition of employment and wages in a way that, on balance, give a picture at the end of the year of increasing diversity in the industry mix of the District’s economy.

On the employment side:

  • 5,633 jobs were added to year-over-year employment change in four sectors: health, information, professional and technical services, and personal services. Instead of appearing to lose almost 200 jobs from 2016 to 2017, this group gained almost 5,500.
  • 4,900 jobs were cut from the year-over-year changes in jobs in three sectors: business services, food services, and education. (Even with the reductions, food services and education remain among DC’s leading sectors.)

At year end the leading non-federal sectors are summarized in the following table:

table 8

On the income side, the new data show particularly large gains in disbursements from a few sectors:

  • Almost three-quarters of the revised gain in wages in the 2017.3 quarter occurred in five sectors or subsectors: Information, real estate, management, arts and entertainment, and organizations and personal services. These five sectors accounted for only 17% of all DC wages in the last quarter of 2017.
  • Those five areas also accounted for 39% of all wage gains from 2016.4 to 2017.4.

At year-end the leading non-federal sectors for wage and salary disbursements are summarized in the following table:

table 9

About the data: The information is regularly reported information from the US Bureau of Labor Statistics (BLS) and the US Bureau of Economic Analysis (BEA). BLS publishes monthly statistics of wage and salary employment for the US and all states (including DC) and each March revises data from the prior years based on the availability of additional information. This analysis uses the amount for the years 2016 and 2017 as originally issued in December 2017 and the revised data for those years issued in March 2018. BEA issues Personal Income and other income statistics each quarter, often revising information from prior periods. This analysis uses the December 2017 release for 2016 and 2017 (through the 3rd quarter of the year) and the March 2018 release that revises prior data and includes the new estimate for the 4th quarter of 2017. Data used here may be subject to further revision by the agencies.

An earlier version of this blog was contained in the March 2018 District of Columbia Economic and Revenue Trends report.

 

 

 

 

 

 

 

From 2010 to 2017 net migration into DC was greater than that of 31 states

Housing demand and school enrollment are examples of how this migration has had an influence on the city’s economy

The Census Bureau estimates DC’s population was 693,972 as of July 1, 2017, an increase of 92,206 from the April 1, 2010 census. Although DC had more people than only two states in 2017, the amount of DC’s increase since 2010 was greater than in 19 states. In percentage terms DC’s 15.3% gain over the 7 years was almost three times the US average (5.5%) and greater than that in all 50 states. (The percentage gains in the 7 states with the most rapid increases in population—Colorado. Florida, Nevada, North Dakota, Texas, Utah, and Washington—ranged between 10.1% and 12.6%)

Net in-migration is the principal explanation for DC’s relatively rapid population gains. In other words, more people moved in than moved out.

  • Net migration into DC of 57,912 accounted for almost two-thirds (63.7%) of the city’s population increase.
  • DC’s net migration was greater than in 31 states. It represented a 9.6 % increase over DC’s total 2010 population, a higher percentage gain from migration than in every state except Florida (10.3%).
  • DC’s net migration was almost evenly split between international (47%) and domestic (53%).
  • The amount of net international migration into DC topped 14 states, but net domestic migration was even more striking: DC outpaced 35 states.

table 1

Migration also contributes to the part of DC’s population gain resulting from natural increase (which is births minus deaths).

According to the Census Bureau about one-third (36.3%) of DC’s population increase from 2010 to 2017 was due to natural increase. It should be noted, however, that many of the births that occurred in DC must have been to parents who migrated into the city during those seven years. In addition, the relatively young age of many migrants meant that few of them died in those years. In DC there were only 51.7% as many deaths as births over the period whereas for the US as a whole there were 66.1% as many deaths as births. Consequently, although DC had more births than only two states, the natural increase in DC’s population from 2010 to 2017 was greater than in 9 states.

Migration and age groups in DC. According to the economic forecasting company IHS Global Insight, 85% of the increases in DC’s population from 2010 to 2017 fell in two age groups: (1) 25 to 44 years and (2) under 15. Although migration can occur within any age range, these two age groups are closely tied to migration.

  • From 2010 to 2017 DC’s population between the ages of 25 and 44 grew by 54,071, a 26.3% increase that accounted for 58.6% of all growth in the city from 2010 to 2017. It is not possible to know how many of the additional 54,071 persons in this age group were migrants, but it can be no coincidence that this increase is close to the 57,912 net migration into DC reported by Census for the period. This age group is mobile and can easily move for employment reasons—and is also the age group most likely to have children.
  • From 2010 to 2017 DC’s population under 15 years of age grew by 24,436, a 29.2% increase slightly higher than that for the 25 to 44 age group. Accounting for 13.9% of the city’s population in 2010, children under 15 accounted for 26.5% of all growth from 2010 to 2017. Again, it is not possible to know how many of the additional children of this age either accompanied persons migrating to DC or were born to such migrants after they arrived, but surely many were.

The scale of the changes in migration and age groups that occurred between 2010 and 2017 would be expected to have many influences in the District’s economy, and this has been the case. For example, according to CoStar, a private sector firm that collects data on apartments and other commercial real property, from the first quarter of 2010 to the second quarter of 2017 there was an increase of 21,492 in occupied market rate apartment units in the District of Columbia. Similarly, enrollment in DC Public and Charter schools increased by 17,139 from the 2009-10 to 2016-7 school years, a 23.5% gain. Increases of these magnitudes in housing and school enrollments would not have been possible without the net in-migration experienced in DC from 2010 to 2017.

table 2

graph 1

The course of net migration will continue to have a great deal of influence on the the District’s economy. Migration is a net concept, meaning that it is the difference between those moving in and those moving out, so the questions surrounding migration have to do both with DC’s ability to attract new people and to retain those that are here.

According to Moody’s Analytics, an economic forecasting company, the nation’s population in the 20 to 30 age group is actually expected to decline over the coming years. From the first quarter of 2010 to the second quarter of 2017 there was a 22.6% increase in the 25 to 29 age group, whereas in the next five years Moody’s expects a 3% decline. To maintain its past inflow of young adults in this age group DC would therefore have to attract a larger share of the national total than was true of the past few years. In attracting people to DC an important question is also the city’s continuing ability to attract workers over 30 years of age who are not coming here for first or entry level jobs.

For retaining people who are here the key questions center on those 25 to 44 year-olds who have been at the center of DC’s recent population growth. What share of this age cohort will find sufficient job opportunities and housing options and secondary school options to keep them committed to staying in the District of Columbia?

There are, of course, many factors affecting migration into DC that are beyond the city’s control. These include developments in the national economy, federal spending policies that can make it easier or harder to find employment in DC’s key industry, and national policies affecting immigration that might reduce net international migration not only to DC but elsewhere in the country.

About the data.

This is the third of three blogs on DC population based on the December 2017 estimates of the US Census Bureau of DC population in 2017.

The population data for the District of Columbia for April 2010 and July 2017 are estimates from the US Bureau of the Census. The July 2017 data for DC and all of the states were released in December 2017 and contains an analysis of the components of natural increase and migration that explain the net changes in population from 2010 to 2017 for the US and for each jurisdiction.

Data on the age composition of DC population for the first quarter of 2010 and the second quarter of 2017 are estimates from the economic forecasting firm IHS Global Insight.

Changes in the 25-29 year-old age cohort in the US are from the economic forecasting firm Moody’s Analytics.

Data on occupied market rate apartment units in DC in 2010.1 and 2017.2 are from CoStar, a real estate information firm that tracks development in the District of Columbia and elsewhere in the nation.

Data on yearly enrollments in DC Public and DC Charter schools is from the DC Public Charter School Board.

An earlier version of this blog appeared in the February 2018 District of Columbia Economic and Revenue Trends report issued by the District of Columbia Office of Revenue Analysis, a component of the District of Columbia Office of the Chief Financial Officer.

Appendix table

table 3

 

 

2017 marks the third time in 70 years DC has had 694,000 residents

From 1950, when it was the nation’s 9th largest city, DC has fared better than most of the then 12 largest cities

The Census Bureau has estimated DC’s population at 693,972 as of July 1, 2017. This is the third time DC’s population has been at that level. The first time was in 1941—on the way up to becoming 900,000 (reached in 1943). The second was in 1976—on the way down to a level of 566,000 (reached in 1998). This third time population is rising again, having grown by 127,000 (22.5%) from the 1998 low point.

graph 1a.PNG

In 1941 employment growth related to New Deal programs and World War II had attracted many people to the city. Population soon soared to 900,000 but started to decline at the war’s end. Even after losing about 100,000 from the war time peak, DC was the 9th largest city in the nation in 1950 with a population of 802,178.

table 1.PNG

US population more than doubled from 1950 to 2016, but DC’s declined by 15% over that time, and its rank among cities fell to 21. Measured by percent change in population, however, DC fared better in those 66 years than all but 3 of the 1950 cohort of the top 12 cities.

DC since 1950. The 1970’s knocked DC out of the ranks of the nation’s 12 largest cities. DC held onto the 9th spot in city ranking through 1970 despite population declines in the 1950’s and 1960’s. But the city lost 188,000 people, a 15% decline, in the 1970’s and its rank fell to 15th in 1980. After losing another 65,000, DC was ranked 21st in 2000, and population gains beginning in 2005 were not sufficient to keep the city’s rank from slipping a little further to 24th in 2010. With growth continuing, DC rose to 21st among US cities in 2016, and it is possible that the rise in population that has brought it to the 694,000 mark for the third time in its history may lead to higher relative city ranking as well.

table 2

The 1950 cohort of top cities 66 years later. Much has happened since 1950, but DC has actually fared better than most of the top dozen cities of that year.

  • As a group, these dozen cities lost 1.9 million people, 8.1% of their population, and the share of the nation’s population living in them went from 15.4% in 1950 to 6.6% in 2016.
  • Of the top 12 cities of 1950, 9 lost population. Only New York, Los Angeles, and San Francisco grew.
  • Only four of the cities remain in the top dozen: New York, Chicago, Philadelphia, and Los Angeles.
  • The 121,008 decline in DC’s population was the least of all 9 cities that lost population. Detroit lost the most (1,176,773).
  • The 15.1% decline in DC’s population was also the least of the 9 cities that lost population. Four cities lost 50% or more of their population: Detroit, Cleveland, St. Louis, and Pittsburgh.

table 3a.PNG

graph 2                                                                              graph 3

Many long time residents of Washington DC are conscious of local developments that have contributed to population declines over the years including such things as urban renewal, flight to the suburbs, public safety concerns, quality of city services, and bankruptcy of the city government. However, all of the large cities of 1950 were affected by enormous changes in the US economy. Industries changed and population shifted to southern and western locations. It is noteworthy that DC’s loss in population in this changing world was less than for most of the1950 cohort cities. Being the nation’s capital, the location of substantial federal government employment and procurement spending, seems to have provided DC with an important measure of stability. Once again passing the 694,000 milestone in 2017—this time going up—shows that the city is still able to attract jobs and people in today’s continuously evolving economy.

The newcomer cities. As noted above, only four of 1950’s top cities are still among the dozen largest in the US. The departing 8 cities, all from the East and Midwest have been replaced by four from Texas, two from California, and one each from Arizona and Florida. Taken together, the newcomer cities increased by 8.7 million, a 375% gain. The largest gain, however, was Los Angeles, not a newcomer, which added 2.0 million and doubled in size. The biggest percentage gain was Phoenix at 1,412%.

In 2016 the top dozen cities accounted for 8.6% of the US population, a share close to half as much as the share (15.4%) the top 12 cities had in 1950. Of the increase in US population from 1950 to 2016, just 5.8% occurred in the nation’s top dozen cities. Traditional big-city boundaries seem thus to have diminished somewhat in relative importance even as the nation has continued to urbanize.

table 4.PNG

 

About the data.

This is the second of three blogs about DC population based on the US Census Bureau estimate of DC population in 2017 released in December 2017.

The population data for the District of Columbia, other US cities, and the US is from the US Bureau of the Census. The data is for incorporated cities and not for the metropolitan areas of which they are a part. Annual data back to 1939 is accessed from Moody’s Analytics. Data for city rankings is accessed from the website https://www.biggestuscities.com. In the city ranking tables, 2016 data for DC do not reflect the revision made in December to that year by the Bureau of the Census.

A version of this blog first appeared in the January 2018 District of Columbia Economic and Revenue Trend report issued by the District of Columbia Office of Revenue Analysis, a component of the District of Columbia Office of the Chief Financial Officer.

This blog was revised on March 22 to clarify that the graph on p. 1 was population only.

 

 

 

 

 

 

 

 

DC’s population rose to 693,972 in 2017—9,636 above 2016. This was the slowest growth in 9 years.

However, growth in 2017 is 12,082 above last year’s estimate for 2016, as revisions added 3,166 people to prior years

In December 2017 the US Bureau of the Census estimated the population of states and the District of Columbia as of July 1st for that year and it also revised estimates for prior years. In the new estimate the Census Bureau added over 3,000 people to DC for the years 2012 through 2016, bringing 2016’s total to 684,336 (compared to the 681,170 it had estimated in December 2016). For 2017 the Census Bureau estimated DC’s population at 693,972 , an increase of 9,636 (1.4%) over the revised estimate for 2016.

The new data show that DC’s population continues to grow. Population has now increased for 12 straight years, adding 126,836 (22.4%) from 2005 to 2017.

The new estimates also indicate that DC’s population growth slowed in 2017. The 9,636 gain in 2017 was the slowest in 9 years, and less than the annual average of 10,570 that has occurred since 2005.

The components of DC’s population growth since 2000 show that slower growth in 2017 is mostly attributable to slower net domestic migration into DC. However, as noted below, the revisions to the years 2012 to 2016 create some uncertainty about the current trajectory of DC’s population growth, and they underscore the importance of migration in DC’s future population changes.

graph 1

table 2table 1a

Components of change. The Census Bureau breaks down population changes into two main categories—natural increase (the difference between births and deaths) and net migration (the difference between those moving in versus those moving out). In 2017 natural increase of 4,293 accounted for 44.6% of the growth in DC’s population from the prior year, and net migration added 5,312 (55.1% of all growth). The 2017 gains in both natural increase and net migration were below their respective annual averages in the 6 1/4 years from the April 2010 Census count to July 1, 2016, but the change in net migration explains most of the slower growth. Last year’s natural increase was 310 (6.7%) below the average from April 2010 to July 2016, while net migration was 3,104 (36.9%) less than the average of the prior 6 1/4 years.    graph 2

table 3b

Natural increase. Natural increase is positive because there are more births than deaths. From 2016 to 2017, births and deaths were both higher than the average over the prior six years. However deaths increased more than births (634 v 323), hence the slow down in natural increase.

graph 3

table 3a

Net migration. Net migration has two components: international and domestic, each of which is the net change of people coming to DC and those leaving. Over the past year the increase in net international migration was 486 (13.2%) greater than the 6 1/4 year average, while the increase in net domestic migration was far below that average. Net domestic migration of 1,152 from 2016 to 2017 was 3,590 (76%) below the average of the prior 6 1/4 years and is equivalent to all of the difference between slower growth in DC’s population in 2017 compared to the annual average from 2010 to 2017. Census provides only a net number for immigration, so the data does not indicate whether domestic migration slowed primarily because fewer people moved in or more moved out.

graph 4

table 5

How certain is it that DC’s population growth in 2017 slowed as much as the Census Bureau has estimated? The Census Bureau’s initial estimate for DC’s population in 2016 was quite similar to the current one for 2017—slower growth due principally to a sharp decrease in net domestic migration. The revisions to the 2016 estimates, including growth added to earlier years, were primarily due to increasing the net domestic migration estimates, and these revisions increased the 2016 population estimate from 681,170 to 684,336. As noted in the table, for the 6 1/4 years from April 2010 to July 2016 Census added 2,959 due to increased domestic migration, cut 829 from international migration, and added 350 for natural increase. This revision to 2016 suggests that 2017’s population estimate might also be revised in subsequent years as more information becomes available to Census from analysis of tax returns and other sources.

graph 5

table 6

The revision to 2016 and earlier years underscores the importance of net migration for the dynamics of population change in DC. Looking ahead, DC’s natural increase is not likely to change a great deal from year to year, ranging somewhere around 4,500 per year and unlikely to exceed 5,000 for some time. If DC is to continue to grow at a pace of 10,570 per year (the yearly average of the past 12 years) this means the city must experience a net gain in migration of around 6,000 per year. There is, of course, no way to know what migration will be in the future. The attractiveness of DC as a place to live will be balanced against factors such as housing prices, job availability, the quality of schools, and national immigration policies.

About the data.

This is the first of three related blogs concerning District of Columbia population based on the December 2017 US Bureau of the Census estimate of population in the city.

The population data is from the US Bureau of the Census which estimates population for all states and the District of Columbia in December as of July 1 of that year. Census also breaks down changes in total population into the categories of natural increase (excess of births over deaths) and net migration (the net of persons moving in and persons moving out, calculated separately for international and domestic migration). These components of change are shown relative to the past year and relative to the April 2010 census (a 7 1/4 year span). In this analysis, the components of change from 2016 to 2017 are subtracted from the total change from April 2010 to give a 6 1/4 year change from April 2010 to July 2016.

A version of this blog appeared in the December 2017 District of Columbia Economic and Revenue Trends which is issued by the District of Columbia Office of Revenue Analysis, a component of the District of Columbia Office of the Chief Financial Officer.

 

Over the past year, education and food services have become the largest sources of new jobs in DC

Those sectors’ contributions to wage growth in the District’s economy are, however, quite modest

According to US Bureau of Labor Statistics data, over the course of the last year job growth in DC came increasingly to be dominated by two sectors: education and food services. These two sectors were responsible for 11,800— about 90%—of the 13,133 net increase in all wage and salary employment in DC from September 2016 to September 2017. This high proportion of the job increase over the last year is remarkable because in September 2016 education and food services accounted for just 14% of all jobs in the city.

Graph 1

Rapid job growth in education and food services did not, however, translate into comparable income gains. The latest income data from the US Bureau of Economic Analysis (combined with seasonally adjusted employment data) indicates that the two sectors accounted for just 5.9% of the net gain in wage and salary income in DC from 2016.2 to 2017.2—despite job growth that exceeded the net increase for the economy as a whole.

table 1

Employment in the education and food services sectors. The increase in employment over the past year in both education and food services has been striking. From September 2015 to September 2017 education employment in DC went from 58,433 to 67,333. Of the 8,900 increase over these two years, 76% (6,800) occurred in the past year. Similarly, the last year accounted for 86% (5,000) of the 5,800 increase in food services employment over the past two years. As a share of all employment gains in DC, the combination of education and food services rose from about one-third or less in the year from September 2015 to September 2016 to over 100% during the spring of 2017.

Table 2

Graph 2

Graph 3.PNG

Jobs and wages. The rapid increase in employment in education and food services over the past year appears to have made little impact on amounts earned by people working in DC. Whereas the two sectors accounted for 107.1% of the net increase in employment in DC from 2016.2 to 2017.2, their share of wage and salary growth was just 5.9%. This share of the increase over the year was less than the average share of wages attributable to those two sectors in 2016.2, which was 6.4%.

Part of the reason for the relatively small impact on wages that education and food services have had is that they both are relatively low wage sectors compared to DC average earnings. In 2017.2, the average annual earnings in education, $41,771, was just 45.7% of DC’s $91,405 average. The average wage in food services, $30,187, was one third of the DC average. Over the year 2016.2 to 2017.2, the average annual earnings fell in both education and food services.

Table 3

Table 4

What accounts for the rapid growth in employment accompanied by modest impact on wages in the education and food services sectors? The data on wages and employment do not provide a full answer to this question. However, two reasons probably help to explain why such a development might occur.

The first reason might be part time employment. BLS employer surveys count people who are working on the survey date, whether such people are full time or part time. Even if hourly wages are increasing, average annual earnings could result if the proportion of people working part time was increasing. Both education and food services can be a source of part time work. It is worth noting in this regard that the only other sector of DC’s economy in which average annual earnings fell from 2016.2 to 2017.2 was transportation and warehousing, another sector in which there could be an increasing amount of part time employment.

The second reason could be changes in the composition of employment within the sectors. This appears to be a factor in education where the largest gains in employment have been in the “all other” part of the sector. “All other” could be such things as charter schools or preschools or after school programs where average annual earnings are likely to be less than in colleges, universities, or professional schools.

Table 5

Graph 5Graph 4

It should be noted, however, that the data presented here is preliminary and the picture could change if it is revised in the future. The next significant revision to the employment data will occur in March 2018, and BEA’s income data is revised as more information becomes available.

About the data. The employment data in this analysis is from the US Bureau of Labor Statistics which conducts monthly surveys of employers in DC and throughout the US. The calculations are based on 3-month moving averages of seasonally unadjusted data. The September 2017 data reflects revisions which were included in the October 2017 employment report. Wage and salary data are from the US Bureau of Economic Analysis Personal Income series for DC, accessed through Moody’s Analytics. The most recent BEA data is for the 2017.2 quarter. For consistency in comparing employment and wage data, seasonally adjusted employment data was accessed from Moody’s Analytics. As noted, all BLS and BEA data is subject to revision.

An earlier version of this blog was included in the November District of Columbia Economic and Revenue Trends issued by the District of Columbia Office of the Chief Financial Officer.