Study: D.C.-Area White Neighborhoods Receive More Capital Than Black Ones

A prestigious District-based think tank released a report stating that in the Washington, D.C., metropolitan area, white neighborhoods receive more capital flow than Black residential areas and leaders in academia, business and the nonprofit sectors believe they understand why and what are the solutions.

The Urban Institute in Northwest published a study “The Promise and Pitfalls of the Washington, DC Region’s Strong Capital Flows,” researched and written by a team of staffers including lead Brett Theodos, a senior fellow and director of the Community Economic Development Hub.  The study’s conclusions of white neighborhoods getting more capital flow than areas of color doesn’t come as a surprise to Babatunde Oloyede, president and CEO of the Marshall Heights Community Development Organization in Ward 7 in Northeast.

“I agree with the assessment of the study,” Oloyede, 47, said. “This isn’t new. You can see that the flow of capital isn’t in Black neighborhoods when looking at homeownership rates, the number of libraries in white neighborhoods as opposed to Black neighborhoods. What this study does is provide more data about the flow of capital so that the conversation can move forward.”

Specifics of the Study

The study said at its beginning that the Washington area thrives economically as a whole but has significant wealth and economic disparities. The study reported most District neighborhoods west of the Anacostia River had very high levels of investment between 2010 and 2020, in addition to areas in Maryland and Virginia close to the Potomac River. In contrast, District neighborhoods east of the Anacostia River and much of Prince George’s County, Maryland, received low investment per household. Overall, high-poverty neighborhoods in the Washington region receive less investment per household than low-poverty areas, the study reported.

Specifically, on average neighborhoods that are 80% white receive 2.3 times more investment than communities with the smallest share of white residents (20% or less). The study revealed on average in neighborhoods where Blacks make up less than 20% of the population receive 2.1 times more investment than areas that are more than 80% African American.

The Experts Offer Their Views

Oloyede said there must be an increase in the flow of capital to Black neighborhoods, but it must be done on purpose.

“There must be more intentionality in allocating resources to Black neighborhoods,” Oloyede said. “Government needs to offer incentives to businesses, banks and other financial institutions to put more resources into communities of color.”

He said legislation such as the Community Reinvestment Act that incentivizes commercial banks and savings associations to invest in low-and moderate-income neighborhoods and Opportunity Zones that allows certain investments in economically struggling neighborhoods to have tax advantages are helpful. However, Oloyede said Black residents have a role to play in increasing the capital where they live.

“People should hold elected officials accountable to see that more resources come to Black neighborhoods,” he said.

Michael Fauntroy is the director of the Race, Politics, and Policy Center at George Mason University. Fauntroy said, “access to capital is governed by access to education.”

“Residential segregation and the flow of capital into white neighborhoods more than Black neighborhoods largely rests on the quality of the schools,” he said. “When you look at areas like Bethesda, Rockville and Potomac, you will see the high quality of schools located in those places.”

Fauntroy said high-performing schools tend to be in white neighborhoods because the property values tend to be higher. He said attempts by state governments to equalize funding for public schools regardless of the immediate neighborhoods’ income level have fallen short.

“The poor are locked into poverty and the poorer neighborhoods suffer because of the lack of capital flow,” he said.

Omar S. McKeithan, 42, a native of Prince George’s County and resident of Ward 7 in the District, works as an associate with NAI Michael, a full-service commercial real estate brokerage firm located in Lanham, Maryland.

“What is needed in African American neighborhoods are more mixed-use transit-oriented central business districts where businesses can thrive,” he said. “These are areas around metro stations zoned for high density where businesses pay taxes, and customers can come to shop, conduct business, live, and in many cases, seek employment.:

McKeithan said some strong examples of central business districts are Bethesda and Silver Spring, but said it is lacking in Prince George’s County.

“The National Harbor was a great start, and hopefully we can use that model in places like Largo where we have demand drivers such as the University of Maryland Capital Region Medical Center.”