D.C. Mun. Regs. tit. 10-A, § 700
700.1 The Economic Development Element addresses the future of Washington, DC's economy and the creation of economic opportunity for current and future District residents. It includes strategies to sustain the District's major industries, diversify the economy, accommodate job growth, maintain small businesses and neighborhood commercial districts, and increase access to employment for District residents.
700.2 The critical economic development issues facing Washington, DC are addressed in this element. These include:
700.3 Since the Comprehensive Plan was adopted in 2006, Washington, DC has achieved success in:
Increasing support for entrepreneurs, including greater access to capital;
Deploying creative placemaking initiatives that advance community building, urban design, and retail revitalization;
Data included in this Element precede the 2020 public health emergency. While the District's economic position may be substantially affected in the early 2020's, the District anticipates that economic trends highlighted in this chapter will hold in the long-term along with the policies contained in this chapter, which are designed to guide the District through both growth and recession cycles.
700.4 Since 2006, Washington, DC's economy has expanded and diversified with growth in a range of sectors across the central employment area and along commercial corridors. Additionally, the District has been a national epicenter in the changing nature of work, where the increasing prevalence of teleworking, independent contracting, and gig work has increased commercial activity in both formal and informal workspaces. As a result, the District's economy has become strong, benefitting from sustained growth, which generates a tax base that balances costs with revenue. However, the District's economic growth has contributed to increases in property values that present challenging barriers for both established and emerging businesses, which can be particularly severe among small businesses. Additionally, more work remains to ensure that all residents have access to retail, commercial facilities and job opportunities with career pathways. The District is striving to ensure that all residents, particularly those from communities of color, are able to enjoy the benefits of economic growth in the District and the region.
700.5 Economic development is about more than simply increasing the number of jobs and improving the District's finances. It is also about ensuring that all residents have opportunities to thrive economically. This means fostering good-quality jobs with career paths to higher wages and connecting more residents to those good-quality jobs through better preparation. This is especially true for residents who have traditionally faced greater challenges accessing the benefits of economic growth, such as communities of color and low-income residents. Economic development harnesses the benefits of the strong regional economy to grow the District's economy equitably. . Economic development strategies are also critical to improving the quality of life in neighborhoods, and bringing retail, , restaurants, and basic services to communities that are underserved by these amenities today.
700.6 A racially equitable economy that ensures all residents, particularly those
disadvantaged historically, can become economically secure is fundamental to the District’s resilience and prosperity. While the District has experienced population and economic growth in recent years, poverty, child poverty, and income inequality have all grown, and disproportionately affect people of color. In 2017, 26 percent of the Black population lived below the poverty level, the highest among all racial and ethnic groups. While Blacks represent 45 percent of the population, Black-owned businesses make up less than 14 percent of total businesses. Labor force participation is lower among Black residents than white residents, and 72 percent of Black residents work full-time and earn less than $75,000, compared to just 34 percent of their white counterparts. Significant racial disparities exist in household incomes, business ownership, and employment. These structural inequalities are present in earning gaps, homeownership rates, retirement savings, student loan debt, and uneven asset building strategies, all contributing to wealth disparities in the District. The District must commit to closing the racial wealth gap by reducing income inequality. Racially equitable economic development must mean intentionally disrupting systems that perpetuate income and wealth inequality. The policies and actions in this Element must be applied recognizing this context, with the goal to reduce the racial income and wealth gaps and specific inequalities facing communities of color.
700.7
Prior to 1998, the District faced chronic negative economic trends that limited its ability to meet the needs of many residents. These trends included population loss, job decline, high unemployment and poverty rates, fiscal insolvency, and the loss of spending power to the suburbs. As of 2019, Washington, DC, is financially healthy and experiencing sustained population and job growth. However, the historic east-west socio-economic divide in the District has become more stark. While many neighborhoods are becoming more diverse socio-economically, the lowest-income residents—who are predominately Black—have become increasingly concentrated in many southern and eastern communities. In addition, the same residents are more likely to have lower levels of education, which corresponds to much lower labor force participation and higher unemployment rate.
700.8
In 1950, Washington, DC accounted for nearly 75 percent of the metropolitan region’s jobs. By 2000, the District’s share of the region’s jobs had fallen to less than 25 percent. Figure 7.1 depicts a new wave of job growth that began in 1998. This wave increased the number of jobs in Washington, DC by 126,000—from 672,000 in 2000 to 798,000 by 2015. Much of this growth occurred in the recovery from the 2008 recession, when the District’s net employment growth increased from an average of 7,000 jobs per year to over 10,000 jobs per year. As a result of this growth, the District has begun regaining a larger share of the metropolitan region’s total employment. By 2018, Washington, DC accounted for approximately 30 percent of the metro area’s jobs. This is an important economic
shift following the 1980s and 1990s, when the District experienced little to no job growth.
700.9 Figure 7.1: Employment in Washington, DC
Source: BLS, DC Office of Planning, 2016
Note: Chart shows employment indexed to its 1990 value. Each subsequent value is a percentage of the 1990 value.
700.10 The District has more jobs than residents but still has an unemployment rate that is more than 50 percent higher than the regional average. Jobs in the District provide some of the highest wages in the country, but over 16 percent of the District’s residents live below the poverty line. The region has had strong and sustained economic growth, adding an average of more than 41,000 jobs a year since 2000. Despite sustained job growth locally and regionally, many District residents, especially from communities of color, continue to face long-term unemployment due to structural barriers which lead to persistent inequities in skills and education. The District must commit to reducing barriers that disproportionately incarcerate, penalize and reduce opportunities within Black, Indigenous, and Peoples of Color (BIPOC) communities. Additionally, billions of dollars of income are generated in the District, the majority of which the District is unable to tax because its earners live in other states. This limitation adds to the District’s challenge harnessing its economic growth to invest in residents with the
greatest need.
700.11 Some of the negative trends of the past have begun to reverse course. Washington, DC is reasserting its position at the center of the regional economy, which had the fifth greatest number of jobs in the country in 2017, with more than 3.2 million jobs. Since 1997, the District has seen significant private sector employment growth, particularly in industries that generate large amounts of secondary employment through business-to-business transactions that facilitate the delivery of goods and services to customers. The growth has occurred in industries that also have higher than typical average compensation, such as architectural and engineering services, advertising, and public relations. This generates notable indirect employment growth through consumer spending in sectors such as accommodations and food services.
700.12 The District's rapid and sustained population growth has contributed to higher property values and increased personal wealth for many long-time homeowners. The growth has also alleviated the District's financial limitations through increased tax revenues. For example, adjusted for inflation, the value of all the commercial properties in the District more than doubled between 2006 and 2018, which contributed to an 85 percent increase in commercial property tax assessments over that period.
700.13 In addition, downtown retail rebounded following steep declines in previous decades and neighborhood commercial districts like U Street NW, 14th Street NW, and Barracks Row also rebounded. After decades in which retailers shunned areas east of 16th Street NW, new retail and fresh food options are being developed in the eastern half of the Washington, DC, including in Wards 7 and 8; national/brand tenants are clustered in Columbia Heights and Fort Lincoln; and a thriving commercial and cultural district has emerged along H Street NE.
700.14 Tourism also rebounded; in 2017 the District hosted nearly 23 million visitors. Those visitors were accommodated by a growing supply of hotel rooms, totaling 32,000 rooms in 2018, with 2,500 additional rooms under construction and another 6,100 in pre-development. The sustained expansion of hotel rooms is particularly notable because it has coincided with the introduction of short-term rental housing options, which significantly increased lodging options for visitors.
700.15 By 2045, the District is projected to add 247,100 jobs. One of the most significant economic challenges will be filling more of these jobs with District residents. This will not only create wealth and opportunity within Washington, DC, it will offset commuter traffic, reduce social service expenses, and improve the quality of life for thousands of households. Confronting this challenge successfully will require a multi-pronged strategy to continue improving the educational system, increasing career training, strengthening workforce preparedness, growing
partnerships with employers, and improving the regional transportation network to support job access.
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 Amendment Act of 2021, effective August 21, 2021 (D.C. Law 24-20; 68 DCR 006918 (July 16, 2021)).