1. Business

In boomtown Washington's shadow, a prime example of the income gap

Ishmael Turay, 46, has been driving a cab in Washington since 2000. A father of five, Turay struggles to stay afloat as much of the capital has boomed with prosperity. Turay’s take-home pay is about $200 a week, or $10,400 a year. He gets food stamps, but federal cuts have reduced the amount to $400 a month.
Ishmael Turay, 46, has been driving a cab in Washington since 2000. A father of five, Turay struggles to stay afloat as much of the capital has boomed with prosperity. Turay’s take-home pay is about $200 a week, or $10,400 a year. He gets food stamps, but federal cuts have reduced the amount to $400 a month.
Published Jan. 26, 2014

WASHINGTON — As he drives through a downtown buzzing with restaurants, boutiques, new condos and glassy office buildings, Ishmael Turay often wonders, "What used to be over there?"

"They tear things down and put things up so fast," said the longtime District of Columbia resident who started driving a taxi in 2000, when the boom began.

At night, Turay, 46, returns to a room in a basement that lacks running hot water. He earns about $200 a week.

This is his Washington, and that of tens of thousands of others who live beyond the prosperity and youthful energy that illuminate the nation's capital.

"I'm not mad at my new neighbors," Turay said, "but there's nobody speaking up for the poor. We're being squeezed out."

When President Barack Obama delivers his State of the Union address Tuesday night, he will focus on economic inequality, calling it a fundamental threat to the American dream. Obama can look no farther than the city he lives in to grasp how stark the divide has become — and how no progress has been made since he arrived in January 2009 promising change.

The rich have gotten richer across the country, and recovered from the recession at remarkable speed, while the middle class stagnates and the poor grow more hopeless.

In the District, the top 20 percent of households earn an average $259,000, second only to San Francisco, while the bottom 20 percent earn an average $9,100, according to a 2012 analysis by the DC Fiscal Policy Institute. So the rich earn 29 times more than the poor.

"There's no question there are two Washingtons," said Dana Jones, executive director of United Planning Organization, an antipoverty group. "The monuments have hidden us. The tide is rising, but the tributaries aren't getting any water."

• • •

Ascendant Washington is visible on 14th Street. In the 1990s, it was a haven for prostitutes and drug dealers. Today it pops with culture and life. Every week it seems a new restaurant opens or a bar pops up sporting $12 cocktails. Developers are racing to complete luxury condos, fueling Washington's profile as one of the most expensive places to live in the United States.

It is visible in the shadow of the major league ballpark, where apartments are shooting up and government contractor Booz Allen Hamilton occupies a gleaming building. And in historically affordable neighborhoods such as Columbia Heights and Mount Pleasant, where rents and home prices steadily climb.

"The speed is sometimes mind-boggling," Peter Tatian, a senior fellow at the Urban Institute, said of evolving Washington, which in 1995 was so poorly managed that Congress gave it over to an independent control board. D.C. was uncool, dirty and dangerous. People left in waves.

Now the city is growing, adding 13,000 people last year to bring the population to 646,000. The boom has been largely fed by American taxpayers and Democratic and Republican administrations.

A swelling federal budget that began under President Bill Clinton and soared under President George W. Bush in the post-9/11 era, brought work to contractors such as Booz Allen and defense giant Lockheed Martin.

In 1990, $12.6 billion in contracting money poured into the regional economy, which includes the suburbs of Virginia and Maryland. By 2000, it was up to $29 billion. In 2010, $82 billion, according to the Center for Regional Analysis at George Mason University, which estimates that 15 cents of every federal procurement dollar stays in the area.

Booz Allen alone had $5.8 billion in revenue in fiscal year 2012, 99 percent from federal contracts, for a net income of $219 million. (Edward Snowden, who exposed secrets of the National Security Agency, was an intelligence contractor for Booz Allen in Hawaii.)

"Washington grew during the Civil War. Washington grew during the Great Depression. It grew during the Cold War and it grew during the era of Homeland Security," said Jane Freundel Levey, a historian who grew up in the city.

Consultants, lawyers and lobbyists have flocked to Washington, shaping policy, fighting regulation — and cashing in. Lobbying has gone from a $1.57 billion industry in 2000 to $3.55 billion in 2010.

Over the past decade the region added 21,000 households to the nation's top 1 percent wealthiest. Observed the Washington Post, "no other metro area came close."

The housing market did not suffer nearly as much as the rest of the country and prices have continued an upward trajectory, making it hard for even middle-class families to afford and exacerbating gentrification in the District of Columbia, while stoking generational and racial tension.

"The new is bumping up against the old still and it's not always pretty," Freundel Levey said. "It's not white people that are taking over the city; it's people with means and the people of means look like everybody. That's a better goal, but you have to remember the people who are getting moved out. Where are they? What happens to them?"

• • •

Turay, the cabbie, is witness to the eroding affordability for lower-income families. In 2000, when he began driving a cab, he was paying $567 a month for a three-bedroom apartment he shared with his wife and children.

By 2003, he said, the landlord had raised the rent by about $1,000. They downsized to a place that rented for $800, putting their four children in the master bedroom. His wife developed severe medical problems and had to stop working as a hotel concierge.

Over time, they fell behind. Turay worked nearly nonstop to raise the $4,000 in back rent they owed. "I'd nap two hours in the cab and, boom, go back to work," he said. He raised the money. But in December 2012, the family was evicted.

Now Turay lives in the basement of his brother's home while his wife and five children reside with her parents, where space is cramped. After paying gas and rent on his taxi, his take-home pay is about $200 a week, or $10,400 a year. The rest is made up by public assistance, but he said his food stamps have been reduced to $400 a month due to federal cuts.

"There are lot of people like me who are trying to do their best," he said. The family considered moving outside the District but found similarly unaffordable rents.

Turay spoke at a city-subsidized day care center where his kids attend. Nearby, Temika Stover, 33, bounced her 1-year-old boy, Aiden, on her knee. She said she had just completed a yearlong certification program as a medical assistant but has struggled to get a job.

"I want to get off public assistance," she said. "But a lot of time when I look for jobs, it's depressing because they want so much. You need degrees. So it's hard for me, but I'll keep trying."

• • •

Washington, which boasts one of the most educated workforces in the country, has gotten younger. The "millennials" — those 18 to 29 — now account for 35 percent of the population, while the same group is only 23 percent of the national population.

It also has gotten whiter. The black middle class began to leave after riots that followed the assassination of Dr. Martin Luther King Jr., leaving 14th Street, Columbia Heights and other parts of the city in ruins. In 1970, African-Americans made up 70 percent of the city's population. In 2010, it was down to 51 percent and many of those left are among the poorest and least educated, concentrated in neighborhoods east of the Anacostia River that have been untouched by revitalization.

Fifty years after King spoke at the March on Washington, the national unemployment rate for blacks remains double that of whites. It's even more striking here. In the District's Ward 8, 4 miles from the White House, unemployment topped 20 percent in 2012, up from 10 percent in 1980; in Ward 2, a mostly white enclave in the northwest, the rate was about 2 percent in 2012.

In July 2007, then-Sen. Obama visited the Anacostia community as a candidate for president to talk about poverty.

"The streets here are close to our capital, but far from the people it represents," he said. "They suffer most from a politics that has been tipped in favor of those with the most money, and influence, and power. How can a country like this allow it? No matter how many times it's asked or what the circumstances are, the most American answer I can think of to that question is two words: We can't."

Six-and-a-half years later, people in Anacostia and similarly depressed areas across the country are no better off. The income gap is bigger, at a level not seen since the late 1920s, according to research. Quality education remains out of reach. Affordable housing is scarce.

Democrats blame Republicans in Congress who have opposed Obama at every turn, but the issue remains one of the big disappointments of his presidency.

Last month, Obama returned to Anacostia in a bid to restart the national discussion, offering a preview of what he will say Tuesday before Congress. Obama is expected to make a new push to raise the federal minimum wage to $10.10 and to provide free prekindergarten for all children. (If the ideas seem familiar, they are. He raised them in last year's speech.)

Obama still faces a divided Congress, but Republicans, including Florida Sen. Marco Rubio and Wisconsin Rep. Paul Ryan, are starting to talk more about poverty and middle-class concerns, providing an opening for compromise.

"This problem is decades in the making, it's much larger than one or two terms of public policy can address," said Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities who has worked with the Obama administration. "But by putting it on the map this way, by forcing Republicans to acknowledge the problem, I think Obama will be seen as having made a very important contribution."

In Washington, where the frenzied pace is showing signs of cooling as federal budget cuts have been enacted, leaders are taking things into their own hands.

In September, Washington's City Council voted to increase the minimum wage to $11.50 an hour by summer 2016. Mayor Vincent Gray has also pledged to invest $187 million in affordable housing projects in the next two years.

• • •

A tall, thin man with a broad smile and a scarf around his neck and cap on his head, Turay drove through the tony Georgetown and Cleveland Park neighborhoods on a recent Saturday evening. He groused about the rise of Uber, a smart phone-based car service favored by the well-heeled denizens of Washington.

But he also talked about working harder to give his children tablet computers and brand-name shoes for Christmas. He proudly noted that his 13-year-old daughter had gotten a scholarship to attend a Catholic school.

"Lots of people here have given up hope," he said. "I have never felt hopeless. Something in me knows that I will get a break sometime."

Turay said he would like to go back to college — years ago he started studying to become an architect but never finished — "but it's hard. I have to keep working."

Now he's studying to get a commercial driver's license and the higher pay that comes with it. He'd like to drive for the federal government.

Times researcher Natalie Watson contributed to this report. Contact Alex Leary at