Takoma Park Income Gap Is Growing

November 4, 2011

Over the past decade, Takoma Park has changed from a community able to support families with a range of incomes to one with higher property values, a larger number of higher-income families, and a smaller number of middle income families.

 

Evidence of this trend is seen by comparing two sets of Census data – the 2000 Decennial Census and the 2005-2009 American Community Survey.  The Decennial Census is the count of all Americans conducted every ten years, while the American Community Survey is a smaller survey taken every year of a sample of U.S. residents.  By combining several years of data, the American Community Survey shows the incomes of residents of communities like Takoma Park as accurately as the larger Decennial Census.

 

In the 2000 Decennial Census, median household income in Takoma Park was $48,490. By the time income data were collected for the 2005-2009 American Community Survey, median household income in Takoma Park had risen to $68,327, even after adjusting for inflation – an increase of over 40 percent in just a few years.  (Median income is the income in the middle when all household incomes are listed from highest to lowest.  Medians are less likely than averages to be distorted by a few households with very high incomes.)

 

Growing Income Gap

 

Even more telling is what happened to the distribution of income in Takoma Park between these two surveys.  For example, compare Takoma Park incomes to area median household income, in this case, the area median income for the Washington, DC metropolitan area. In the 2000 Decennial Census, Takoma Park had approximately 3,000 lower-income households, (defined here as households with incomes less than 80 percent of the area median income) 2,400 middle-income households (with incomes between 80 percent and 120 percent of the area median income), and 1,400 higher-income households (with incomes above 120 percent of the area median income), as seen in the chart below.

 

Click below for Chart.

 

Takoma Park ACS Calculations 3 bar chart

 

Note: the figures in the chart were extrapolated from the census data consistent with themethod recommended by the U.S. Census bureau

 

By the time income data was collected for the 2005-2009 American Community Survey, Takoma Park incomes had shifted dramatically.  While the number of lower-income households was about the same as it had been in the 2000 Census, the number of middle-income households had fallen about 15 percent to slightly more than 2,000 and the number of higher-income households shot up more than 50 percent to about 2,200.  The number of households in the higher-income group now outnumbers households in the middle-income group.

 

Increased Cost of Homeownership

 

Why such a dramatic shift in the distribution of incomes in less than ten years?  At least part of the answer lies in the sharp increase