Put up-pandemic, the D.C. area was doing higher economically. However with current federal job cuts, its future now stays unclear.
Popping out of the COVID-19 pandemic, the D.C. area was doing higher economically, in response to the most recent State of the Capital Region report. However one of many authors says that with current choices being made by President Donald Trump’s administration, its future now stays unclear.
The report evaluates how the totally different elements of the D.C. space’s housing, inhabitants and employment conditions recovered from the pandemic.
Leah Brooks, one of many report’s co-authors, instructed WTOP that many of the area, city and suburban, was doing properly in comparison with their state through the pandemic.
“The Capital Area, as of 2023, was exiting the COVID period, gracefully and on a very good observe for financial development,” stated Brooks, who’s additionally a professor on the Trachtenberg College of Public Coverage and Public Administration at George Washington College.
“Whether or not that good observe for financial development is more likely to persist now that we now have these large federal job losses, I feel, is an enormous open query,” she stated.
Actual property
Previous to 2020, most individuals who labored in city settings traveled to work and noticed worth in residing close to their jobs. Nonetheless, as soon as the pandemic started and dealing from dwelling turned a regular, Brooks stated it made residing in exurban and suburban areas a “way more viable alternative.”
“Even earlier than the pandemic, folks in dense city areas have been extra more likely to do business from home than folks in far exurban areas,” Brooks stated. “And that held true through the pandemic. And my guess is … that it nonetheless holds true now.”
Because the pandemic subsided, folks wished to return to city areas, which elevated demand and raised rents.
“That may very well be an indication of a wholesome metropolitan area the place folks need to dwell,” Brooks stated. “Or it may very well be an indication of a metropolitan area that hasn’t constructed sufficient housing, and so rents are rising.”
The report discovered that curiosity in office-to-residential conversions was on the rise. Brooks stated that these conversions assist deal with housing shortages and revitalize city areas, however current important monetary challenges.
Employment
The report states that with widespread lockdowns and social distancing measures forcing many to do business from home, by 2021, distant work peaked at 32% — 5 instances the 2019 Capital Area charge.
By the tip of 2023, distant work remains to be roughly 4 instances increased than pre-pandemic ranges.
Nonetheless, through the COVID lockdowns, employment within the hospitality sector, together with eating places and areas that relied on foot site visitors and in-person providers, sharply declined. In line with the report, solely 91% of these jobs in exurban jurisdictions have returned to their pre-pandemic ranges.
Brooks pointed to smaller demand and a labor scarcity — and companies embracing know-how, which might make these job losses everlasting.
“I feel when you’ve made that funding, you’re not going to return,” Brooks stated. “Upon getting an iPad to take your order as a substitute of an individual, even when you’re in a position to rent the particular person once more, you have already got the iPad. You’re not going to return and rent the particular person.”
The area might see new development from initiatives like the new Washington Commanders stadium in D.C. or the redevelopment of the Six Flags America property in Prince George’s County, Maryland. Nonetheless, Brooks stated that exterior of a downtown growth attracting new residents and companies to the city core, the variety of hospitality jobs will most likely not return to pre-pandemic ranges.
Inhabitants
One of many shocking findings within the report was that family measurement dropped drastically through the pandemic, whereas the realm inhabitants grew. Brooks stated that earlier than the pandemic, the common family measurement in city areas like D.C., Arlington and Alexandria was about 2.3 folks, and by the tip of the pandemic, it was solely two folks.
“It’s bizarre, as a result of folks all the time complain about how housing costs are so excessive,” she stated. “And a technique it can save you on housing is to dwell with different folks, however that’s not what we see folks doing.”
With many individuals selecting to not dwell in teams, extra housing can be required to fulfill the demand. The report says the variety of households has continued to develop because the pandemic, with the most important development space being in exurban areas — which noticed a rise of 100,000 between 2015 and 2015.
Federal job cuts
With the arrival of the Trump administration and its decision to cut employment at several federal agencies, all of the post-pandemic development might create extra adjustments within the area. Shrinking the federal workforce will trigger a trickle-down impact that may damage all areas of employment within the brief time period, the report states.
Brooks instructed WTOP these job losses will influence contractors, housekeeping providers and different “ancillary jobs that go together with the federal jobs.”
If unemployment continues to develop resulting from these job cuts, many individuals will select to depart the area, impacting the housing market. It’s unclear how important a change this can be.
Not too long ago, Brooks, together with the report’s different co-authors, attended an occasion with Fairfax County Board Chairman Jeffery McKay, who expressed that his jurisdiction may very well be hit exhausting by the lack of federal staff who might depart after being fired or if their company strikes out of the area.
“Fairfax might be the wealthiest, most profitable jurisdiction in your complete metro space,” she stated. “And if he’s nervous, then we should always all be nervous.”
City areas like D.C. present “a land of alternative” for personal companies, Brooks stated, which can be key to reduce the influence of the federal job losses.
“There are a number of proficient scientists, proficient economists, proficient information analysts who’re out of labor now,” she stated. “That’s a possibility for personal companies to return and rent these folks and make investments right here.”
The research was commissioned by researchers on the American Enterprise Institute, Georgetown College and the George Washington College.
Get breaking information and each day headlines delivered to your e-mail inbox by signing up here.
© 2025 WTOP. All Rights Reserved. This web site is just not meant for customers situated inside the European Financial Space.
