What will Negative Net-Migraiton look like in the DMV?

Today's Washington Post has a provocative article about new census data showing that population growth in the region is slowing down.  Most of the slow down is attributed to out-migration rather than birth dynamics.  Basically, more people are moving out of the region than are moving into it.  Population growth hasn't ceased in large part because birth rates are making up the shortfall. 

There is, of course, variation within the region.   Net migration (number of people moving to a place minus the number of people leaving it) is still positive in parts of the region.    DC still has positive net migration.  So, too, do Loudoun, Prince Georges, Montgomery, and Prince William Counties.  However, the city of Alexandria, and Arlington and Fairfax Counties now have negative net migration.

The Post attributes the shift in large part to "sequestration," which led to cuts in government budgets across the board.  Although many municipal leaders hoped the cuts would be restored, most haven't been.  And, Virginia localities, where beltway bandits set up shop, took the biggest hit.

The hand-wringing has already commenced.  Unlike other parts of the country, the DMV has experienced a largely uninterrupted growth spurt, nearly 20 years by some estimates.  Even the recession didn't really slow things down here.  In fact, people who lost jobs in other parts of the country often found work in DC--as was the case with one of the out-migrants profiled in the story.

So, what are the consequences of negative net-migration?  As with most shifts, there will be winners and losers.

Likely winners? 
* The region's commuters might see a small, but measurable improvement on commuter routes.
* So, too, might metro riders.  Metro ridership is already down.  Factors posited to explain the drop include rising prices, poor reliability, packed trains, more telework, and a reduction in the transportation subsidy for federal workers.  Ridership might decrease even more if negative net-migration continues to be a trend.  In fact, most migrants to the area have been public transportation-loving millennials.  If they opt to go elsewhere, then the trains might not be as packed.   
* First time home-buyers might benefit as well.  Inventory has been low since the 2008 recession.  Indeed, many homeowners put off selling their homes, choosing to wait until housing prices rebounded to their bubble (or near bubble) levels.  However, people who lose their jobs, or can't find ones to begin with (see: sequestration) are often willing to take a little less money when they sell. 
* The DMV's middle and lower-income residents.  They aren't complete winners (see below), but a slow down might make things a wee bit more affordable for people without top dollar incomes.  For the last ten years or so most development has been targeted to the luxury market.  If those people aren't coming here, developers of newly built apartments and condos might lower their prices.  Fewer people and somewhat lower prices also eases the displacement pressure the city's low income residents face. 

Likely losers? 
* Municipal Tax Coffers.  Fewer people means fewer people to tax.  And, fewer tax receipts means either tax hikes, or cuts in service.  It's hard to predict where tax hikes or cuts would be focused.  Most likely, though, there will be more cuts than taxes.  And, as a general rule, cuts usually hurt the poor more than the wealthy.
* Home Sellers.  People trying to sell their homes in the DMV have been incredibly lucky when compared with the country as a whole.  The DMV's housing values didn't fall as much as those in many other parts of the country, and they rebounded more quickly as well.  As a result, it's been a sellers market for much of the last 5 years (purchasers at the height of the bubble excepted).  With fewer people churning into the city, it will be harder to sell houses, and probably take more time as well.
* The DMV's Hipster Street Cred.  After years of being described as 'dowdy,' crime-ridden, wonky, arrogant, and type A, the DMV finally started appearing in all those urban top 10 lists.  You know, those lists of the 'Top 10 place to be a hipster,' or the 'Top 10 places to drink craft beer.'  That could change if the millennials decide to head elsewhere.  What's a hipster wonk to do? I guess they can always go back to yakking about policy over decidedly unhip (gasp) pitchers of beer.   

Super-bad: Bank Behavior in Black Majority Counties.

This week the Washington Post did a 3 part series on the effects of the 2008 mortgage crisis in Prince Georges County, a black majority county.  If you haven't read the story (part 1, part 2, and part 3), it is well worth a read.  For now I'll summarize two main points from it:  the mortgage crisis hurt black communities worse than white ones, and housing prices in predominantly black communities have not rebounded in the way they have in predominantly white communities.

There's a lot to chew on in these three installments.  For today, though, I want to focus on one thing.  The extra pernicious behavior of banks in black majority counties during the bubble.  Of course, anyone who followed the bubble and the 2008 recession that followed knows the banks were engaged in go-go lending.  But, the bad behavior was especially bad in black majority areas.  And, despite the wealth of knowledge about how badly banks actually behaved in all neighborhoods, a significant number of commentators still continue to blame borrowers.

Unfortunately, the 'blame the borrower' view assumes that lender and borrower have equal knowledge.  That is, while the banker has your personal asset and income statements, you the borrower know enough about mortgages to know whether you're getting a fair deal.

The story in PG county, and the upper middle class neighborhood of Fairwood, illustrates just how uneven that relationships can often be, and how unfair the banks could behave.

In the third installment of the WAPO series we meet the Boatengs, a couple originally from Ghana.  They owned a townhouse in Germantown but with a growing family they decided in 2005 to find a bigger house.  A friend in their church recommended they check out the Fairwood neighborhood--a upper middle class enclave with beautiful new homes.

The Boatengs fell in love with a house in the neighborhood.  It had a price tag of just over $600,000.  Their joint income at the time was just over $110,000.  By any credible standard, the Boatengs should not have qualified for a mortgage for the house.

But, Lehman Brothers, who gave them the mortgage found a way to make it work.  They had the Boatengs cash out the equity in their town home for use as a down payment.  They used savings to increase the amount, allowing them to take out a mortgage for just under $500,000.  Even with a 100,000 reduction, the loan amount was not sustainable.  By my optimistic, back of the envelope calculations, the Boatengs would have brought home about $7,300 a month (assuming a tax rate of 20%).  Their mortgage payments (according to the story) were $3,662 (more on this in a bit).  That means the Boatengs were paying 50% of their take home pay on housing.  Housing experts argue that families should pay no more than 30% of take home pay on housing costs.  For the loan to work the Boatengs would also need a lot of things to fall into place (and stay in place).  They'd need to find a reliable renter for the Germantown townhouse, for example, and they'd need to keep their jobs.    

So far we have an example of the garden variety bad behavior banks were engaged in during the bubble years.  That is, a bank gave out a loan to someone who'd likely have trouble repaying it.     

But, Lehman Brothers decided to pile on.  The Boatengs were immigrants.  They weren't familiar with US banking.  They believed in the American dream, and like many immigrants the idea that the American dream can turn into a nightmare never occurred to them.  The loan the Boatengs got was an adjustable rate, interest only loan.  For the first 5 years the couple would only pay interest (no equity building here).  After 5 years, they would start paying down some principle, but their interest rate would also go up, from 6.1% to 8.3%.  Not surprisingly, the Boatengs couldn't make the new payments.  They've since gone deeper in to debt to improve their ability to repay their mortgage.  They are in over the heads on multiple front.  Foreclosure looms.  

What happened to the Boatengs is called exploitation plain and simple.  And, it was targeted.  West Africans are about 5% of the population of PG county, but they held almost a third of the mortgages that were foreclosed on in the county. 

Superbad--it ain't just a movie.  It's a bank thing. 

Toys for Police or Aid for Victims--who or what is DOJ's asset forfeiture for?

PG County police has a newish mobile command center.   It looks glossy, sophisticated, and high-tech, which is to say, cool.*

The techie-fizz wears off, however, when you realize the county got the new command center through the Department of Justice's (DOJ) Equitable Sharing Program, which allows state and municipal police to share in a portion of so called "ill-gotten assets" (i.e. those seized under suspicion that a federal crime has been committed).  Here's the formal definition of the program on DOJ's webpage.

It sounds good doesn't it?  Hitting the bad guys by going after their money.  'What could be wrong with that?' you ask?  A lot, as it turns out.

An investigative series on the program by the Washington Post highlights two issues in particular.  The first is that seizure of property can occur based on suspicion (i.e. without concrete evidence). Ordinary citizens can have cash, vehicles, and other property seized on suspicion that it was obtained through illegal means. 

The second problem is that even if police fail to produce enough evidence for an indictment, they can still keep your property.  In fact, the only way to get your stuff back is to negotiate, or hire a lawyer and go to court. The Washington Post found that 81% of the cases it tracked through a FOIA request did not result in an indictment.  Your pockets for the picking--local law enforcement edition. 

The third problem--do victims of crime benefit from Equitable Sharing?--brings us back to that bus.  When DOJ is pressed to justify the program given these obvious problems, it usually resorts to tropes about helping victims.  Here's how a DOJ spokesperson described the program to a Washington Post Reporter:  "It [Equitable Sharing] removes the tools of crime from criminal organizations, deprives wrongdoers of the proceeds of their crimes, recovers property that may be used to compensate victims, and deters crime."

So, how do victims make out in the Equitable Sharing Bonanza?  Not well, it turns out.  State and local forces would rather buy stuff than help already existing victims.  According to the Washington Post, since 2008 the state and local police from across the country have received 2.5 billion from the Equitable Sharing Program.  And, a breakdown of the categories for national spending demonstrate victims are at the bottom of the list.  One billion dollars of that spending was categorized as 'other,' as in 'none of your damned business how we spent the money.'  The second largest spending category--communications and computers--sucked up 436 million of total funds.   Likewise, 261 million went to "building and improvements," 215 million on salaries, and 177 on weapons.  Victims, "community-based programs" in DOJ parlance, got a paltry 20 million.

So, the next time you see the PG County Mobile Command Unit tooling around town, ask the police chief why he didn't spend that money on helping gunshot victims, or victims of domestic violence, or victims of elder abuse?  The list goes on and on.

By the way, the question about victims shouldn't stop you from asking all the other questions the WAPO reporting begs you to ask, including whether we really do have a presumption of innocence anymore?    

* The picture of the mobile command center is from PG County's website.  

Random Moco Pic of the Day--Diversity in the DMV

Technically, these picture aren't in Montgomery County.  I snapped them on University Boulevard just past the MOCO/PG county border.

However, they strike me as emblematic of the DMV, and two things about it in particular:
One, the DMV is incredibly diverse.  Second, that diversity is frequently on display in the suburbs rather than in the city proper.   

In this shopping mall you can get Mexican/Salvadoran food, African goods, Colombian clothes, and tax help in English or Spanish.  Just up the street (not pictured) you can also get a sari made.  Now if only there was an Irish bar and a sushi joint!

Fighting for Millennials--City/Suburb edition

City and Suburb have history.  There are slights, fights, outright insults, and more than a fair share of cold shoulders.  So, it probably shouldn't surprise us that they'd fight over millennials as well.

Until recently, however, everyone thought the city had won that battle (many times over).  We're constantly bombarded with stories about millennials' preference for urban hotspots.   

Well, it turns out (according to a recent Washington Post article) that a lot of millennials can't actually afford to live in the city, or can only afford to do so if they shack up dorm style in 1 and 2-bedroom apartments.  And, let's not even discuss group housesmillennial warehouses. Turns out millennials at the upper end of the age bracket are also having trouble 'upsizing' inside the city when they get in a family way.  Two bedroom apartments are in short supply and even more ridiculously expensive than the city's already ridiculously expensive 1-bedrooms.   

What does all of this mean?  Well, we know that millennials are moving into the city at higher rates than any other age group.  But, it turns out they are also the largest age group moving out. 

Who could have seen this coming?  Everyone, it seems, but the stewards of Mayor Gray's 'One City,' who've been busy celebrating the luxurification of the District of Colombia.  It was, after all, Gray's former Director of Planning, Harriett Tregoning who called 14th Street's transformationinto the Champs Elysees"fascinating, anomalous and wonderful for the city!"

But, never fear millennials, neighboring Prince George's County has your back!  After the Washington Post published its article, Eric Olson, a county council member in Prince George's County came a' courtin'!  Turns out PG County has bike trails, some walkable neighborhoods, access to public transportation, and most of all affordable rent. 

I don't have a dog in this fight (I live in MOCO), but I'd hate to see the battle for millennials reduced to a battle over which is better--city or suburb.  The real problem is that the DMV is an expensive place to live, and the closer you get to downtown DC, the more expensive it becomes (with some notable exceptions).  There's also a dearth of affordable housing in the city, and many of its close-in suburbs.  Until that problem gets addressed, the real segregation lines will continue to be economic (and social), not generational.