The Mayor of the District of Columbia recently urged the federal government to get its people back in their offices or give up millions of square feet. The city has ambitious economic goals that could, in its view, make better use of the space. For details, the Federal Drive with Tom Temin spoke with John Falcicchio, D.C.’s deputy mayor for Planning and Economic Development.
Tom Temin And just maybe, if you would, zero in with more detail on what the city would have in mind potentially for, I guess, mostly the leased space that the federal government now occupies. That is to say, pays rent on but doesn’t have any people populating.
John Falcicchio Absolutely. So first and foremost, our ask is for the administration to bring federal government workers back, and do so by having an enterprise wide policy on return to office. So Mayor Bowser is a chief executive herself. She has 37,000 employees. During the pandemic, 40% of those employees were in-person. They had to do their work in person. So that means 60% of her 37,000 person workforce, is able to have a flexible work schedule. And what we’ve done is we’ve set enterprise-wide, three days in the office and up to two days of telework. What we want the federal government to do is have a similar enterprise wide policy, so that every agency isn’t trying to leave it to itself. Now what we know, is that the federal government hasn’t brought people back in the same way that we have. And so that leaves a lot of office space, that isn’t being utilized, that we can either utilize ourselves, work with nonprofits to fill it. And so we get that vibrancy, that you would have, in having more workers in the office.
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Tom Temin Right. There’s a couple of issues. One is the space itself, that could be repurposed for the types of businesses and nonprofits you want to kind of engender in the city. And the other is the street traffic itself, with the food vans and the small restaurants. It’s kind of a wasteland, in many ways in some stretches, because there’s nobody to have breakfast and lunch at these places.
John Falcicchio Well, we know that the federal government, in our central business district, accounts for 25% of the office space. Whether that’s owned or leased. And when you think about having that much of the economy sit on the sidelines, it does have an impact on our businesses and our small businesses. And that really has an impact on the number of D.C. residents and residents from the region that they can hire. So for us, this isn’t about just seeing if we get workers back in the office, for the sense that they should be working in the office. We do think it’s a better environment, more collaborative when people are working together. But really, it also has an impact on those small businesses and those frontline workers. During the pandemic, we said, we’re all in this together, we’ll get through it together. And now it seems that we’re through it. We’re saying to folks, well, you get back to work and we’re going to kind of hang back and work from home.
Tom Temin And do we have any statistics on small business closures or how many fewer restaurants or any kind of metrics on that particular issue?
John Falcicchio Yes. So in the District of Columbia, before the pandemic, there were about 800,000 jobs. That’s total, 800,000 jobs. And because of the pandemic, we dropped to about 712,000. Now we’re actually cresting about 775,000 jobs. So we’ve almost made back all the jobs that we lost during the pandemic. But what we know is that the jobs that are still missing, in the city, are primarily in hospitality, food service and attraction. And so what we’ve seen is tourism bounce back with the leisure traveler coming back. But we don’t see that same activity in the business traveler. And that business traveler isn’t coming back, because the economy in the district is dominated by the federal government. And so we need the federal government to come back to draw back that business traveler as well. That will help our small businesses and help our small businesses employ more D.C. residents and residents from around the region.
Tom Temin We’re speaking with John Falcicchio. He is deputy mayor for Planning and Economic Development for the District of Columbia. And when having these discussions or urging the government, who do you talk to? Because that is a highly decentralized decision, from what I understand.
John Falcicchio So far it is. But the federal government also has ways to implement government wide policy. And so we talk to partners at the Office of Budget Management, Office of Personnel Management, [General Services Administration (GSA)], because those are really kind of the three organizations propensities that will help the president make this decision. And so what we’re really asking for, is that enterprise wide policy that makes it clear for agencies. Now, even with our policy in the District of Columbia government, the policy again, three days in the office, up to two days work from home. Each agency director is allowed to implement that in the way that they can still carry out their mission, but give workers flexibility. So the better normal that we’re all hoping for, after the pandemic, can still be realized by bringing people back. We don’t need everyone to come back all the time, but we do need them to come back most of the time.
Tom Temin And what is your sense of how the government compares to the other big occupiers of D.C. space? And I’m thinking primarily of law firms. There’s a few of those down there. And then also, the big non-profits, the [American Enterprise Institue (AEI’s)], the Cato’s, the ones that occupy big buildings, the Brookings, those kinds of groups.
John Falcicchio Yeah. So over the last couple of months, we’ve actually seen a couple of indicators that show that there is activity happening. So we track that in metro ridership, whether it’s rail or bus. We also have some indicators of office utilization, and that’s kind of ticked up over the course of the fall and into the albeit mild winter that we’ve had been experiencing. And so really what’s missing is, that rush of people that can only come back if there’s an enterprise wide policy by the federal government.
Tom Temin Got it. And just a quick question on the number of job, you say you’re cresting around 775,000. The population is around 700,000, I think. So, do we know how many of that come and go? Because you don’t have 725,000 to send on the city every day. What’s the number that balloon in and out each afternoon?
John Falcicchio Yeah. So pre-pandemic we actually, of all major American cities, we were the one that grew by the most during the day, per capita. And we really need to experience that again, in order to realize our economic potential. And so the federal government could be a big partner in that by bringing workers home. And really, what we’ve heard from, we’ve heard from some of our partners in labor. Labor unions who represent office cleaners and office security officials and others who are in that space, real frontline workers. And they’re being impacted by fewer office workers coming back.
Tom Temin Yes in fact, the [Service Employees International Union (SEIU)] itself, to name a few, to name one of a few, has a really big building in the district. And those are not the people they represent that work in that building. I wonder what their population day-to-day is of people in there versus their teleworkers. Do we know?
John Falcicchio Yeah. So I don’t have that data in front of me. But what I do know is one of the things that, kind of going back to what the mayor said in her inaugural address, was that there is an opportunity to for us not just to talk about bringing folks back. But if folks are not going to come back and there’s less federal office space needed, we have a great opportunity to partner with the federal government, like we have on big real estate projects. Like Saint Elizabeth’s and Walter Reed and Hill East, to do kind of a scatter sight approach across our downtown to take sites that are underutilized and bring them back to productive use.
Tom Temin Yeah, like the southwest too, that area.
John Falcicchio Yeah. And one of the sites, and I know this is a site of contention in the region, but where the FBI lands. Wherever it lands, and it seems like it’ll land in Maryland or Virginia, with an executive office being here in Washington, D.C. That tract of land on Pennsylvania Avenue, creates a great opportunity for us to do a mixed use development with our partners in the federal government and draw more residents downtown. One of the mayor’s goals in her comeback plan is to attract 15,000 more residents to the downtown to make it more viable.
Tom Temin Yeah, because right now that FBI headquarters, the way it’s situated, you’ve probably walked by that building, as I have. And in the winter, it’s like walking in Pyongyang. It’s just an empty, windswept, forbidding place with concrete rising on either side.
John Falcicchio Well, we are just a few blocks away from the FBI headquarters. And one thing I will tell you is that it does seem that a lot of their folks are in the office and working. I know it, because I see them at the lunch counter often, and they make the lines a little bit longer because they come back. That’s the kind of leadership we need to see of the federal government agencies. And a lot of that, I think, is because that’s a mission that you can’t carry out by everybody being separate. You got to bring people back together to collaborate, to work together, to mentor. And that’s what we think more federal government agencies should do.
Tom Temin And what about traffic and automobile movement? I know everyone has this great ideal of green inner cities, but the fact is, lots of people drive down and it’s getting tougher to get through some of these areas. Even the outlying counties are taking some of these measures. And that really mitigates for people to stay home.
John Falcicchio Yes. What we’ve seen is some utilization actually, of our bus is starting to come back. Actually, it’s at about 77% of pre-pandemic levels, where we see a lack of ridership is on the Metrorail. So we’ve got to do more to attract riders back to Metrorail. That will help us with the traffic issue. The other thing is that Metro is doing a great job over the last few weeks of bringing more cars into service and that allows them to run more frequent service. And so as that progresses, we think that the riders will come back as well.
Tom Temin No chance of bringing back 14th and a half street.
John Falcicchio So we think, we got to get more people onto Metrorail. That’s the best way to kind of take some pressure off the roadways.
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