The Elite 5% in America’s Highest Income Places

The American Community Survey (2006-2008) has included a new table that identifies the mean household income of the highest 5% of households for communities with more than 20,000 residents. The statistics have some interesting patterns when compared to the mean household incomes of ALL households in a given place (The top 50 places on that list can be found on my previous posting: Darien, Connecticut: Wealthiest Town with over 20,ooo.

TABLE of the TOP 5% MEAN HOUSEHOLD INCOMES PLACES

The Elite 5% in America’s Highest Income Places

1  American Community Survey 2006-8

2 American Community Survey 2005-7

The newest survey of the top 5% has similar methodology problems compared to looking at all households. The first irksome problem for either table is that the Census Bureau does not let any household claim an income of over $2,000.000 for statistical reasons. Statistically speaking there is good reason to limit the amount a household can claim as income. After all, Bill Gates would surely blow out Medina, Washington’s mean household income!  However, $2 million seems like an arbitrarily low amount and it will not change for the 2010 Census.

Secondly, because of the use of sampling, variances are very large and although there are real differences, one shouldn’t get hung up on whether a community is 3rd or 4th on the list.

Another problem in looking at the wealthiest places is the population cut-off of 20,000. This leaves some of the wealthiest places in America that are so familiar to Americans, off the list (e.g. Scarsdale, Millburn Township aka Short Hills, Winnetka, Hillsborough, and Palm Beach).

The one problem with the data in high income suburbs that is cleared up by looking at just the top 5% of households is the Servant Problem (as I call it). Servants that have their own  housekeeping  facilities such as kitchens are considered separate households. Naturally their incomes pull down mean household income statistics for any community with particularly large houses that require live-in staff. Greenwich, Connecticut would be a good example of this kind of place.

Climbers: Even Wealthy Places have Stratification

When one compares the mean income for all households to that of the top 5% there are some statistical surprises. Even places that are generally considered to be “wealthy” by any conventional definition can be highly stratified.

Laguna Beach makes the most jarring leap in the standings from 44th for all households compared to 8th place for mean household income ($1,170,959).  The stratification of this beautiful beach town is obviously the spectacular ocean front  mansions vs. more modest homes and apartments near the center of town.

Beverly Hills climbs from 57nd to 23rd. This is no surprise as the wealth associated with north of Santa Monica Boulevard vs. the tracts south of that major road are from two different strata entirely. The wealthy precincts north of Santa Monica (aka 90210) makes up less than a third of all of Beverly Hills households. The lower 2/3 of the city has a surprisingly low mean household income considering the astronomical real estate prices. Let’s face it, living in Beverly Hills means you’ve made it in America!

Although including Manhattan is a bit like comparing apples and oranges, I couldn’t help but add it to the chart as the borough is well known for it’s extreme social segmentation. The size and number of extremely wealthy neighborhoods are familiar to most (the Upper East Side, Sutton Place, Greenwich Village and Tribeca). The mean household income of Manhattan’s top 5% comes in 42nd on the list at $816,029. Three other highly stratified central cities did not make the top 50 list: San Francisco ($506,233); Atlanta ($506,096); and Washington DC ($487,133).

Southampton to East Hampton: Serious Stratification even in the “off  season”.

Household income is always counted at one’s primary residence so many of the most elite vacation spots have relatively low mean household income due to year round service people statistically overwhelming the relatively few very wealthy  permanent residents. The income data from the Towns of East Hampton and Southhampton capture this dichotomy of wealth. However, those wealthy households that due claim the two towns as their “first homes” for personal reasons ensures the Hamptons’ representation among the 50 wealthiest communities of the top 5%.

It is safe to assume that the lions share of the top 5% of incomes are located in the high income core of the Hamptons displayed below.

The Southampton and East Hampton Core Communities Map


View Southampton-East Hampton in a larger map

Places that are less Segmented and more Homogeneous

Just as there are places that are more stratified, there are some notable places that have a much higher degree of homogeneous income. A couple of the most extraordinary examples of this pattern of income are two Fort Worth suburbs. Both are collections  of  monotonously nouveaux riche subdivisions filled with endless McMansions. They exhibit little demographic or architectural difference. Southlake falls from 8th in rank for all households to  35th for the top 5%. Colleyville falls off the top 50 list from 14th to 55th.

New Jersey’s Montgomery Township falls from 21st to 47th. It is an illustration of  an East Coast homogeneous nouveau riche community.

An example of an older planned community that exhibits less stratification is the gracious Long Island community of Garden City. Although 12th in the nation for all household incomes, it falls to 36th for the top 5% of earners.

Map of Garden City, New York’s Higley 1000 Neighborhoods

View Garden City in a larger map