The Problem with D.C.’s Downtown Is the Private, Not Federal, Sector

Because D.C.’s current leadership, despite years of high rates of office vacancies downtown, did nothing to address the problem, they have been calling for federal workers to return to the office in a desperate attempt to jump start downtown businesses, and, more importantly (at least to Mayor Bowser and her Green Team*), keeping property values high. But it turns out the problem isn’t the federal workforce, but the private workforce (boldface mine):

The federal government is the 1,000-pound gorilla of employers in the Washington region. According to the 2022 ACS 1-year estimates, 15% of the region’s workforce is directly employed by the federal government, and many of the area’s private-sector workers are federal contractors or work at organizations that do business with the federal government.

As a result of the federal workforce’s local dominance — particularly in central Washington, which contains large areas consisting nearly entirely of federal offices — federal workers’ remote work has been blamed for the region’s high levels. DC Mayor Muriel Bowser’s heavily-reported call for federal workers to return to the office last January to save the District’s downtown was not entirely unjustified: federal offices are particularly concentrated downtown.

Federal workers in the Washington region did work remotely at higher rates than other workers in 2022 — 32% versus 25% of for-profit workers, 28% of non-profit workers, and 12% of local, county, and state government workers. However, only 19% of workers working from home in the region in 2022 were federal employees, while 56% were employed by for-profit organizations.

This is a consequence both of the fact that 58% of the region’s workers work for for-profit organizations compared to the 15% who are federal employees, and of the fact that the region has some of the highest rates of work-from-home by for-profit workers in the country.

While 15% of for-profit workers nationally work from home, only five metro areas out of the 50 largest have larger shares of for-profit workers working from home than the Washington region’s 25%: Austin, Texas, (29%); San Francisco (28%); Raleigh, North Carolina, (28%); Seattle, (27%); and San Jose, California, (Silicon Valley, 26%), all of which are technology hubs. This fits a broader national pattern, where remote workers are concentrated in metro areas with large white-collar workforces with many jobs that can be done remotely at least some of the time.

The city really needs to start yelling at K street law firms to return to the office.

I kid. The city’s leadership–and most don’t seem up to the task, so it’s time to replace them–needs to use something like Boston’s Back Bay as a model, and add a lot of residential housing. But too many in the Wilson Building and on the Council still think it’s 1998, so that’s not going to happen anytime soon.

*Bowser et alia openly call her donors the Green Team, and it’s not because they’re environmental activists.

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1 Response to The Problem with D.C.’s Downtown Is the Private, Not Federal, Sector

  1. Gregory Paul Lanman says:

    I just saw a report that said the average work spends $50 a day to come into the office; a worker with a pet spends $70 a day. So, if I’m working from home, I might be saving $40 a day. I am not sacrificing my $7 Starbuck habit. I fully support as many Americans as possible, working from home or at least getting paid enough, to offset the costs associated with coming into the office.

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