Hopes for a revival this fall were high. schools reopened. Covid cases were way down. Companies recalled their employees. But the city has been stuck at about 45 percent of workers back in the office since Labor Day. That’s worse than New York, Chicago, Houston and the national average for major cities, according to data from security firm Kastle Systems.
A key problem is that federal employees are still largely at home. President Biden vowed in March that “the vast majority of federal employees will return to work in person.” Months later, it’s not even close. According to the Office of Personnel Management (OPM) Federal Employee Viewpoint Survey, nearly 40 percent said they work completely remotely or from home three or more days a week. Another 17 percent state that they are at home one or two days a week. Records from the DowntownDC Business Improvement District show less than a quarter of federal employees are back in the office. Mayor Muriel E. Bowser (D) is begging the White House to change that. Allowing each agency to set its own rules was a mistake. Mr. Biden must provide a clear policy of at least three days a week on site for all federal employees who are no longer back.
opinion | It’s time for federal employees to return to the office
They are the hub for the city center. When they’re not there, lawyers, consultants, lobbyists and other workers also see little reason to return. While many large marquee law firms and other law firms that have long dominated downtown DC have policies that say their employees should be in the office three days a week, few enforce them.
The consequences are obvious. A walk along K Street Northwest from 14th to 20th Streets – prime real estate near the White House – reveals 21 retail space for rent and 10 office space for rent. During last Friday’s “Happy Hour” many bars along this route had plenty of free seats. This desolate scenery would have been unimaginable a few years ago.
It doesn’t help that several prominent companies are leaving downtown altogether for the redesigned Wharf area of southwest DC, where they’ll get river views and brand new buildings. The law firm Williams & Connolly left 700 11th Street – right by the Metro Center – to move to the Wharf. The owner of the downtown building, Hines Real Estate, has essentially abandoned the property. The lender put it up for sale.
Nobody wants the capital of the United States to fall into disrepair. Many remember how dirty and desperate it was in the 1980s and early 1990s. It’s going to take a lot to revitalize this downtown area (and others across the country), but basically it comes down to two main things: reclaiming more workers and converting some office buildings into apartments and entertainment centers.
It’s unrealistic to expect a return to 2019 office attendance levels, but if the federal government and most companies made a full commitment to requiring workers to come back at least three days a week, it would make a significant difference.
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At the same time, leaders from America’s largest cities are embracing the fact that remote and hybrid work is here to stay. A May DC Policy Center report summarized the city’s challenge: “Our best estimate is that of the 401,481 workers who commuted to DC from elsewhere before the pandemic, 155,550 are able to get their jobs done from home.” The need for office space just won’t be that great in the future. That’s a massive problem for downtown DC, which the mayor says is more than 90 percent commercial and just 8 percent residential.
Former Councilman Jack Evans recalls standing in Franklin Square in the 1990s with former Mayor Marion Barry, who lamented, “I should have surrounded these squares with housing 20 years ago.”
As depressing as it is to walk through parts of the city, especially on a Friday, this moment is a great opportunity. DC can become a leader in converting offices into homes, museums, college centers, indoor golf and more. Actually it’s already starting. According to real estate data company Yardi Matrix, DC saw the most office-to-apartment conversions in the country in 2020 and 2021.
While downtown is struggling along with the retail centers in Friendship Heights, other parts of the city are thriving. The Wharf to the southwest, the area to the southeast near the ballpark, and the Union Market area near the train station are examples of how the city has used its resources to work with developers and community members to transform neighborhoods. These parts of the city now have more of a 24/7 vibe. They are busy with workers during the day, but also at night and on weekends thanks to local residents and entertainment options that draw people to the city. Union Market is about 50 percent commercial and 50 percent residential, a far more sustainable mix in this new normal.
There are reasons for cautious optimism. The city continues to attract new museums (the Museum of Illusions opens in December) and expand the university campus. Venues like the Kennedy Center and Capital One Arena are once again running nearly full event schedules. Subway service is beginning to improve, particularly with easier access to Dulles International Airport. And violent crime, while still too high, is beginning to decline. Conversations with numerous developers show that many of them are in a wait-and-see mode. They watch what federal employees are doing — and city officials.
The transformation of the inner city requires investments from the city. Converting offices into apartments that require bathrooms and air conditioning in every unit is not cheap. The big hike in mortgage rates this year is also making developers reluctant to act without additional stimulus. But the alternative is a dead inner city that won’t bring much revenue to the city. An influx of federal pandemic aid and infrastructure dollars is giving the city a little more cash to work with than normal, at least for a while.
To the mayor, councillors, investment leaders, developers, businesses and residents, we have a message: be bold.
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