Just how rich are the Bay Area’s neighborhoods?

A while back, I saw a list of San Francisco richest neighborhoods by zip code. I remember looking at the number one at the time (94105, which includes South Beach, with a reported median income of $142k) and thinking that it was pretty darn high for a median number. But I also thought that it didn’t seem to represent the extremes of wealth I was seeing around the city and reading about in the news.

Almost every “the most expensive neighborhood”-type article uses this type of average reporting which can be very misleading. Take this one. According to SF Curbed, the residents of ole’ Atherton make a median income of $220k. I’m sure the number is right, but I also I know quite a few folks that make that much money, and they sure aren’t living in Atherton.

So I decided to take a look at some tax return data to see if I could come up with some numbers to give a better sense of just how much wealth is in Bay Area neighborhoods. I found a dataset on data.gov which provides the data at a more granular level for 2013 (the most recent year available).

For each zip code in the US, the dataset provides a breakdown based on income band (under $25k | $25k-50k | $50–75k | $75–100k | $100–200K | over $200k).

Excellent! This gives us a bit more granularity. In particular, it allows us to look at only those households that make over $200k per year and see how much money the really make, er, report to the IRS. The data also let us see the concentration of these $200k+’ers in a neighborhood — is it just that old wealthy-looking dude that lives around the corner or are they everywhere and we just don’t know it?

Here are the top 10 wealthiest zip codes in the Bay Area:

Wow. Just think about these numbers for a second. In 94301/Palo Alto, a full third of the households in that neighborhood make over $200k/year. And of this third, the average (mean) amount they pull just in salary is over $1M in a year. Add other sources of income like capital gains and the amount goes to $3M.

Using this data, Atherton seems much more like Atherton. A full 44% of Athertonians make over $200k (not surprising given the $220k number above). And of these, their average salary is over $1M and total income is over $2.5M in 2013.

(At this point, you may ask “Wait — aren’t you just misleading us with more misleading averages?” We’re still talking about averages, and it’s likely that a few really wealthy people in these neighborhoods are drawing the average up. I’d love to get my hands on more granular data, but this is what’s readily available to me. Also, the salary component should be subject to fewer extremes on the high end than total income. But yes, these are still averages, but I think they’re more informative averages.

Here are the 10 richest San Francisco Zip Codes:

If you walking around Cow Hollow, 1 in 5 residents there will live in a household that makes over $200k/year. That’s not so hard to believe — there are lots of well-dressed, got-a-good-job-looking people there. But the average amount these folks rake in salary is close to half a million, and total income is $869k. No wonder million dollar homes are selling like pancakes!

(TBH, I’m not sure what to make of FiDi and Downtown being so high. It doesn’t seem like that many people live in these neighborhoods. But that’s what the data say.)

The concentration numbers are also lower compared to neighborhoods outside of San Francisco, and that’s to be expected because zip codes in SF tend to traverse multiple socio-economic neighborhoods (e.g., 94115 includes both Pacific Heights and Western Addition). Still, areas like 94123/Marina-Cow Hollow/PacHeights and 94105/South Beach have high concentrations of $200k+ers.

How does this compare to the US overall? $200k+’ers make up 3.7% of tax returns, and the average income of these households is $509k, $300k of which is salary.

The Bay Area is even richer that I thought.