Last week, D.C. leaders celebrated the groundbreaking of D.C. United’s Audi Field, another sign of the city’s prosperity. But this week comes the reminder that Washington’s robust economic growth in the last decade has left many residents behind.
Mayor Muriel E. Bowser (D) announced Tuesday her five-year economic development plan to make the city more competitive and more inclusive. She wants to grow the city’s private-sector economy by 20 percent to $100 billion and reduce unemployment to below 10 percent in every ward and across racial demographics and educational attainment levels in the next five years.
The mayor’s 105-page plan focuses on supporting the industries that have served the city well so far (hospitality and tourism, real estate, health care, etc.) and on creating new opportunities in areas that would build on existing market strengths (cybersecurity technology, health-care data analysis, autonomous vehicle innovations, etc.).
“I am confident that this framework will accelerate our progress as a leader for inclusive prosperity by creating opportunities that are accessible to all, supporting longtime businesses and residents, and benefiting our most disadvantaged communities,” Bowser said in a statement.
The federal government accounted for over 30 percent of D.C.’s gross domestic product in 2016 and the District’s income gap ranked in the top five among the 50 largest U.S. cities.
Former mayor Vincent Gray created the city’s first five-year economic development plan in 2012. Gray set out to generate $1 billion in revenue, and the city did that: Tax revenue in fiscal 2016 was $1.2 billion more than 2012. But his plan also called for the creation of 100,000 jobs in five years; the District added 42,400 jobs between 2012 and 2016, according to the Bureau of Labor Statistics.
Bowser’s goals are measured. To reach her $100 billion target, the private sector would need to grow at 3.4 percent annually. During the previous five years, the annual private-sector GDP growth rate was 4.2 percent.
The District will need to find jobs in the next five years for 1,313 residents of Wards 7 and 8 to reduce unemployment to below 10 percent in all eight wards. Bowser’s plan also calls for reducing to below 10 percent the rate of unemployment among high school graduates, currently 15.6 percent, and among African American residents, which is 13.2 percent.
“We must be more deliberate in our efforts to balance out the opportunities in the city,” said Oramenta Newsome, vice president for DC’s Local Initiatives Support Corp., a group targeting low-income neighborhoods, and a member of the plan’s advisory committee.
Metropolitan areas around the country have seen an influx of new residents seeking urban living, which boosts tax revenue but creates growing disparities in income and wealth accumulation, according to Peter Tatian of the Urban Institute.
“D.C. is certainly not immune from any of those things,” Tatian said.
The Urban Institute helped the city develop the economic growth indicators for the plan.
When the city’s leaders set out in 2000 to add 100,000 residents, they spent relatively little time thinking about the challenges that kind of growth might present, said Steve Glaude, executive director of the nonprofit advocacy group Coalition for Nonprofit Housing and Economic Development.
They thought they were throwing a pebble into a pond, Glaude said.
D.C.’s population surged to 681,000 in 2016, up 109,000 since 2000. The city was almost a decade into its growth when leaders in government and nonprofits began focusing on the resulting economic disparity, Glaude said.
“The splash was bigger than anticipated,” he said.
Glaude said the mayor’s plan promotes a competitive economy and pairs it with efforts to reduce disparity.
The report stresses the need to move away from the city’s dependence on the federal sector, which buffered the Washington region during the most recent recession. Though the federal government accounts for an outsized share of the city’s GDP, federal-sector growth plateaued in recent years and is expected to decrease in the current political climate.
The mayor hopes that bolstering existing industries and cultivating growth-oriented sectors such as technology can offset and surpass any contraction of the federal government.
Prescribed changes to the permitting and licensing systems aim to help businesses open and operate more easily in the District. The plan also calls for legacy institutions such as universities and hospitals to increase their procurements with small and minority-owned businesses. The focus on new industries includes recommendations for workforce training for the jobs that will be created, such as solar installation.
Raj Aggarwal, chairman of a business advocacy group called Think Local First, said he was encouraged to see the government engage local businesses within the city rather than relying on tax subsidies to lure in outside companies. His organization of local independent businesses includes the likes of Busboys and Poets and local Ace Hardware stores.
Aggarwal credited the mayor for creating measurable goals that can help initiatives outlast possible changes in the political environment from the next mayoral election.
“What can we do to put down the roots now so it’s beyond an administration, but what’s best for the city?” he said.
An earlier version of this story incorrectly identified D.C. United’s new soccer stadium as Audi Stadium It is Audi Field. The story has been updated.