204.1 On the surface, Washington's economic picture is the envy of most cities. There are more jobs than residents, and nearly three times more jobs than households. Job growth, important for the city's economic vitality, has continued throughout this century, with 83,000 new jobs added since 2005 for a total of 798,000 jobs in 2015. Job growth in the professional services, education, and hospitality sectors has outpaced federal employment growth, helping diversify the city's economy beyond the federal government. Wages in the region are among the highest in the nation.

204.2 Job growth has led to declining unemployment. After peaking above ten percent in 2011, unemployment dropped to 6.1 percent in 2016. The diversity of job growth has reduced unemployment across race, education levels, and geography. Yet the city's unemployment rate is relatively high, hovering between six and nine percent consistently almost double the rate for the region. Unemployment rates in areas such as Far Southeast/Southwest are still four to five times higher than the regional rate, and disproportionately affect black residents. Yet many District residents do not have the skills to fill the white-collar jobs that drive the city's economy, and because the District is one of the region's major job centers and requires some "importing" of workers from the suburbs, more than 70 percent of the jobs in the District are filled by workers who live in Maryland and Virginia. This is essential to the District's economy: even if every DC resident in the labor force were employed in the city, we would still need almost 400,000 additional workers to fill the city's jobs.

204.3 This imbalance results in a number of problems. The most often cited problem is the District's inability to tax the incomes of the nearly 500,000 non-residents who commute to the city each day. This daily migration is also accompanied by traffic congestion, air quality problems, and millions of hours of lost productivity.

204.4 Perhaps the more profound problem is the regional income divide. As Figures 2.3 through 2.5 indicate, the District today is a city divided by income, education, and employment. The maps depict this regional pattern within the District, as well as the change the District has experienced since 2006. And, change must be carefully considered: while the neighborhoods of Central Washington have seen a recent decrease in the percentage of those without a college degree or living in poverty, this is attributed to the strong increase in a resident workforce with college degrees, not necessarily improvements for existing residents, so the regional divide persists. "Vision for Growing an Inclusive City" concluded that bridging the income divide was the single biggest challenge facing the District as it plans for its future, and now, with nearly 17 percent of residents living in poverty and the cost of living rising, that challenge remains.

204.5 Figure 2.3: Unemployment in 2017

Figure 2.4: Persons 25+ Without College Degrees in 2017

204.7

Figure 2.5: Poverty Rate in 2017

204.8 Demographic tables throughout the Comprehensive Plan, including Figures 2.3, 2.4, and 2.5, use the most accurate, up-to-date Census and other data available. At the city-wide level, this may mean data from a single year of the American Community Survey (ACS) and the Annual Estimate of Population. Getting to a neighborhood level requires five years of ACS data. Unless otherwise stated, this data is labeled with the last year the data was collected but represents an average for the whole collection period. Readers should take this into consideration given the rapid rates of change for some neighborhoods. For the decennial census, students residing in the District on April 1, 2010 (census day) are counted as residents of the District rather than residents of their home state. Consequently, data on poverty, age, and other variables reflects student populations in census tracts containing (or adjacent to) universities. The District has accounted for these anomalies within the Comprehensive Plan, and should tailor its anti-poverty, economic development, and similar programs accordingly.

204.9 While attracting residents earning higher-wage jobs reflects a strong economy, it is important to consider the resulting growth in income disparities. At the national and metropolitan levels, income from lower-wage jobs has decreased in real terms, while income for workers with higher wages has grown, as shown in Figure 2.6. In the District, the story is somewhat different: wage growth at the lower end improved but importantly has not kept pace with growth for higher wage workers. Growing income disparity is even greater when considering geographic, racial/ethnic, and gender dimensions.

204.10 Figure 2.6 Earned Income Growth for Wage and Salary Workers by Percentile: 2000-2014

204.11 From a regional perspective, the District's employment outlook is positive. Because Washington is the seat of the federal government, it has been insulated from the economic cycles that have affected other regions of the country. The city never had a large industrial base, so it was spared the large-scale job losses experienced in cities like Baltimore and Philadelphia during the 1970s and 1980s. The District was not dependent on technology jobs, so it was spared the downturns affecting places like San Jose and Austin during the early 2000s. Even the downsizing of the federal government in the 1990s was accompanied by a rise in procurement spending that kept the Washington economy strong. The 2013 federal budget sequestration provides a recent example of the District's economic strength and diversity. Despite the sudden loss of 7,000 federal jobs, the city's population and total jobs continued to grow.

204.12 A factor in the city's economic growth is its taxes. During the 1980s and 1990s, the District's reputation in the region was high-taxing: the highest tax rates for sales, business franchise, and real property. Since the Control Board era, the District for the most part has resisted raising tax rates, lowered many of these rates, and from a tax perspective, become more economically competitive in the region.

204.13 Washington's economy is diversifying, which helps during slow federal growth; however, a period of significant and sustained decline in federal employment and procurement would challenge the city's ability to recover. Further diversifying the District's economy will make the city more resilient to this and other economic shocks. A key advantage to the federal presence is its highly educated and skilled workforce, which the private and non-profit sectors can tap as a mutual asset for

growth.

204.14 But it is hard to consider an economy truly resilient when it does not close the "skills gap" that exists between the needs of local employers and the abilities of many District residents. Future job growth is expected to be concentrated in the services sector, including the business, legal, engineering, management, educational, and social service fields. The Economic Development Element of this Plan emphasizes the importance of closing the skills gap by improving education and job training so that more District residents can fill jobs in these and all other professions and adapt to changing conditions.

204.15 Since 2006, the increased demand and competition for housing from a growing number of higher-wage households was greater than anticipated and has made the District one of the most expensive cities to live in the country. Between 2011 and 2016, the cost of purchasing a home rose 50 percent, while renting costs rose 18 percent. Increasing rental housing costs make it difficult for lower or even moderate income residents to live in the city. The absolute number of low-cost rental units (less than $800/month) declined by half between 2003 and 2013, while the number of higher cost units increased. Units with rents of $1 000 or less made up 59 percent of the total rental stock in 2002; in 2013 those units comprised only 34 percent of the total stock. The District now has a large percentage of high- and low-income households, with relatively few in the middle-income range - the "missing middle." Housing costs, along with income inequality, are perhaps the central challenges to maintain and grow an inclusive city.

SOURCE: District of Columbia Comprehensive Plan Act of 1984, effective April 10, 1984 (D.C. Law 5-76; 31 DCR 1049 (March 9, 1984)); as amended by District of Columbia Comprehensive Plan Act of 1984 Land Use Element Amendment Act of 1984, effective March 16, 1985 (D.C. Law 5-187; 32 DCR 873 (February 15, 1985)); as amended by District of Columbia Comprehensive Plan Amendments Act of 1989, effective May 23, 1990 (D.C. Law 8-129; 37 DCR 55 (January 5, 1990)); as amended by District of Columbia Comprehensive Plan Amendments Act of 1989 NCPC-Recommended Amendments, and Closing of Public Alleys in Square 669, S.O. 88-452, Act of 1990, effective May 23, 1990 (D.C. Law 8-132; 37 DCR 2213 (April 6, 1990)); as amended by District Government Land Use Temporary Amendment Act of 1994, effective October 1, 1994 (D.C. Law 10-190; 41 DCR 5360 (August 12, 1994)); as amended by Comprehensive Plan Amendments Act of 1994, effective October 6, 1994 (D.C. Law 10-193; 41 DCR 5536 (August 19, 1994)); as amended by District of Columbia Comprehensive Plan Act of 1984 Land Use Amendment Act of 1994, effective March 21, 1995 (D.C. Law 10-235; 42 DCR 30 (January 6, 1995)); as amended by Technical Amendments Act of 1996, effective April 18, 1996 (D.C. Law 11-110; 43 DCR 530 (February 9, 1996)); as amended by Second Technical Amendments Act of 1996, effective April 9, 1997 (D.C. Law 11-255; 44 DCR 1271 (March 7, 1997)); as amended by Comprehensive Plan Amendment Act of 1998, effective April 27, 1999 (D.C. Law 12-275; 46 DCR 1441 (February 19, 1999)); as amended by Technical Amendments Act of 1999, effective April 12, 2000 (D.C. Law 13-91; 47 DCR 520 (January 28, 2000)); as amended by Comprehensive Plan Amendment Act of 2006, effective March 8, 2007 (D.C. Law 16-300; 54 DCR 924 (February 2, 2007)); as amended by Technical Amendments Act of 2008, effective March 25, 2009 (D.C. Law 17-353; 56 DCR 1117 (February 6, 2009)); as amended by Comprehensive Plan Amendment Act of 2010, effective April 8, 2011 (D.C. Law 18-361; 58 DCR 908 (February 4, 2011)); as amended by Comprehensive Plan Framework Amendment Act of 2019, effective August 27, 2020 (D.C. Law 23-127; 67 DCR 001360 (February 14, 2020)).