Feeling deprived is relative in Montecito

Montecito is like Scotland in the Middle Ages. Just as you think you’ve seen the last set of Vikings invade and settle, here they come again in even fancier longboats.

The other day, I was talking to a woman who is married to a doctor. Between the two of them, they must make hundreds of thousands of dollars a year, but the town’s increasing wealth occasionally bothers them. Sometimes, they look at each other and say, “What are we doing wrong?”

I hear this sentiment voiced in various ways all of the time. Wealth and poverty are relative and we live in an extremely abnormal place, economically.

On April 3, The New Yorker magazine ran an article about poverty and relative deprivation in America. In it, the writer noted a WWII-era study comparing the professional happiness of military police officers and Army Air Force members. The police officers, it turned out, had greater job satisfaction than their Army Air counterparts, perhaps because there was little opportunity for advancement for the cops. There were ample promotional opportunities, however, for the Army Air guys.

“The more people a man sees promoted when he is not promoted himself,” wrote the author of the study, “the more people he may compare himself to in a situation where the comparison will make him feel relatively deprived.”

If a couple of extra chevrons on a sleeve make people feel deprived, what are the effects of 12,000-square-foot houses and Gulfstream Vs parked at the airport? Especially in Montecito, each new wave of people moving here has to be wealthier than the last, given the ever-increasing — and stunningly high — home prices. Last year, the average Montecito home sale price was under $3 million. This year, the average is already at $3.6 million.

People have been talking for a long while now about how the housing bubble must burst, and they’re probably right. Realtors in Montecito, however, often say that this part of town doesn’t follow the normal economic rules because the world’s wealthy will always want to move here — and there are only so many houses in Montecito.

At the very least, it’s a good argument for clients from, say, Kansas, who initially balk when confronted with buying a ranch-style home on half an acre for $3 million. But if the Realtors’ argument is right, the longboats pulling up on Miramar Beach could get even longer and more jewel-encrusted still because the world is producing more rich people every year.

For the past 10 years, Capgemini and Merrill Lynch have put out the World Wealth Report, which describes “high net worth individuals” — their numbers, where they live, how they invest. In 2005, the companies estimated that there were 8.7 million people globally who had assets, not counting their residences, that were greater than $1 million. (This number is a 6.5 percent increase over 2004.)

According to their 2003 report, the vast majority of these millionaires (almost 90 percent) had assets of $1 million to $5 million, and the air thinned very quickly as you climbed the net worth ladder. There were an estimated 446,000 people with between $5 million and $10 million; 166,000 between 10 and 20; and just 44,000 at the 20-30 million level.

Tell people in Montecito these numbers and you can see their eyes roam around unfocused for a while, as if following a drunk fly, until they’ve discreetly figured out how uncommon they are.

By 2005, there were 88,500 people in the world who were worth over $30 million, which was a 10.2 percent increase over the previous year (and yet still fewer than all the residents of the city of Santa Barbara).

What’s weird about Montecito is that a lot of the people in this last, relatively tiny category already live here. Out of the 9,000-plus Montecitans, there are more than half a dozen billionaires who own homes here and there are scads of people worth between $30 million and $1 billion. If the home prices continue to go up — coupled with the attrition of the old, not-as-wealthy families — there will only be more of the richest of the rich around.

At a national political level, there’s no real discussion about wealth disparity, thanks to timidity and disingenuous claims that such talk equals “class warfare.” But on a personal level, if it bothers you, trawl the bar at Lucky’s to snag a high net worth mate, find a wealthy but unhealthy parent somewhere, or get that company started up.

Better yet, realize that we live in an anomalous place and stop comparing yourself to the extremely wealthy: It’ll only make you feel deprived even though you’re probably not.