D.C.: Less Black, More Green

In the second of a three-part series profiling the nation's capital, The Root takes a look at who really holds the purse strings in the rapidly gentrifying (and not-so) Chocolate City.

(Continued from Page 1)

The District's fire sale helped fuel what former Federal Reserve Chairman Alan Greenspan once referred to as the market's "irrational exuberance," which pushed home values up to record highs, and the poor and working class out. Between 1999 to 2007, the average home price in the District more than doubled, from $189,000 to $469,000, while median household income fell 8 percent for blacks and 2 percent overall.

Over that same period, property-tax bills increased by an average of 30 percent each year from 1999 to 2007. At Ann's Beauty Supply and Wigs in southeast D.C., not far from the Washington Nationals' new, 42,000-seat baseball stadium, the yearly assessment skyrocketed to $16,000 from $600 in just three years' time. A nearby foster-care agency contracted by the city to care for abused and disabled kids saw its tax bill increase from $9,000 in 2005 to $83,699 in 2007. At the Market Deli at First and L Streets NW, property taxes soared to $22,000; its assessment was $1,500 in 2004.

Not surprisingly, Washington's poorest -- and darkest -- residents have abandoned the city in droves. Between 2000 and 2006, the District lost more than 21,000, almost 10 percent, of its African-American residents -- while the city's overall population grew by more than 30,000 to 572,000. (Many of the city's black residents defected to nearby Prince George's County in Maryland.) The Chocolate City's black majority dropped from 56 percent to 51 percent between 2000 and 2008. Of the jobs in the city that don't require college degrees, nearly two-thirds are filled by suburbanites, according to a 2008 report by the local Chamber of Commerce.

And three African Americans with ties to Washington, D.C., made Forbes magazine's 2009 list of the 40 wealthiest African Americans, including Black Entertainment Television founder Robert Johnson, who became the first African-American billionaire in 2000 after he sold the network to Viacom for $3 billion in stock and assumed debt. Johnson ranks third on the list after Oprah Winfrey and Tiger Woods; his former wife and BET co-founder, Sheila Johnson, ranks seventh with $400 million.

No. 8 on the list is Don Peebles, with an estimated worth of $350 million, who runs one of the country's largest minority-owned real estate development companies. The grandson of a hotel doorman, Peebles left Rutgers University in 1979 to become a real estate agent in the District, later working on Capitol Hill as a page and an intern. Today the Peebles Corp.'s portfolio includes hotels, apartments and office space in Miami Beach and the District, and 13 acres of prime Las Vegas real estate behind Steve Wynn's Encore casino.

Of the 100 largest businesses owned by African Americans, 16 are located in the Greater Washington area, according to a 2010 survey by Black Enterprise magazine that divides the businesses into four categories: advertising agencies, auto dealers, financial services and, the broadest category, industrial/service companies. With $528.7 million in revenue in 2009, Robert Johnson's RLJ Development, a Bethesda, Md.-based hotel-development and investment firm, ranks as the eighth-largest black-owned industrial/service business in the nation. Thompson Hospitality, a food-services company in northern Virginia, comes in at 12th, with 2009 revenues of $321 million. The 17th-largest African-American-owned business in the category is Lanham-based Radio One, the 30-year-old broadcasting empire led by Alfred Liggins III, which reported $272 million in annual sales.

The Washington-area businesses in the industrial/service category are predominantly communications, technology and lobbying firms, as well as other companies that are heavily reliant on government contracts, regulations and personal connections with decision makers and their staff. Following close behind Radio One at No. 20 is 1 Source Consulting in the District, an information-technology firm that recorded revenues of $210.7 million last year.

The extreme polarization of wealth in the black community has far-reaching implications. Poor African Americans' increasing social isolation leads to greater political isolation. The elites are getting richer and more integrated into the local economy. Meanwhile, the poor and working class are getting poorer and more estranged from the local economy.

"The poor in D.C. are much less likely to have exposure to black professionals," says Roderick Harrison, a Howard University sociology professor and senior fellow at the Joint Center for Political and Economic Studies. "The black middle class knows how to hold institutions accountable, and the poor don't. It's going to be harder to fight city hall, and this is really becoming a serious issue for the black community as our public schools continue to produce failure in this era of greater global competition.

"If, 10 years from now, we look back and see another generation of poorly educated kids, this is going to be something that really puts the nails in the coffins for kids who have no access to good schools, and that expands this underclass and wage inequality. If you don't have a college education, you really are in trouble in this city."