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Inherited Wealth

Should We Want the Ultra Rich as Neighbors?

Research & Commentary
October 21, 2011

by Inequality.org

Researchers have just published a first-ever ranking of U.S. metro areas by number of super rich households they host. Residents of the top ten ultra-rich cities, the researchers seem to think, ought to be cheering. The facts suggest residents might want to hold their applause.
How much does Wall Street tower over the U.S. economy? We have some new evidence.

The first-ever breakdown of America’s super rich — by metropolitan area — has New York, Wall Street’s host, the home to far more “ultra high net worth” individuals than any other city in the United States.

Some 7,270 New Yorkers now boast at least $30 million in net worth, says a new report from Wealth-X, the Singapore-based “wealth intelligence” company that helps private banks and luxury retailers focus a more “tailored approach to their target market.”

About 13 percent of America’s 57,860 super rich now live in metropolitan New York, an area, Wealth-X researchers point out, that sports only 6 percent of the nation’s total population.

All combined, the top ten metro areas on the inaugural Wealth-X super rich list — New York, Los Angeles, San Francisco, Chicago, Washington, Houston, Dallas, Atlanta, Boston, and Seattle — hold just under half the nation’s super rich.

Should residents of these cities be cheering their Wealth-X “ultra high net worth” ranking? The principals at Wealth-X seems to think so.

“A concentration of UHNW individuals,” says Wealth-X co-founder David Friedman, “is certainly indicative of an area’s overall economic health.”

But don’t go rushing to pull up stakes and move to New York, our top super rich hotspot, just yet. New York’s “overall economic health” leaves a bit to be desired.

This past summer, New York’s Fiscal Policy Institute reported that New York City’s “underemployment” — that’s jobless, plus involuntary part-timers and discouraged workers who have given up looking for jobs — is running higher than the national average.

Many of New York’s employed, meanwhile, don’t make enough to keep their families out of poverty. A stunning 20.1 percent of all New Yorkers, the Census Bureau notes, live below the poverty level.

And even New Yorkers who have good jobs and decent incomes have reason aplenty not to cheer their city’s status as a super rich playground. The wealthy, wherever they congregate, tend to bid up the price for everything from housing to restaurant meals.

That bidding is raging in New York’s core. The average price of a Manhattan apartment now runs $1.4 million. This past spring, 28 Manhattan apartments sold for $10 million or more, the highest total since the calendar quarter right before the 2008 financial industry meltdown.

Welcome to “ultra high net worth” New York.

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