New York Times article on DC's success misses the most important point

-- "Washington’s Economic Boom, Financed by You," New York Times

The article argues that DC's success over the past 15 years is the result of a federal spending boom in response to 9/11, wars in Iraq and Afghanistan, and the increase in spending on counter-terrorism.

Likely that contributes, sure, but I can't fully agree with the thesis.

Federal spending has been increasing for decades, it's just that it was mostly being spent outside of DC

The reality is that federal spending has been increasing significantly throughout the past 50 years.

What happened is the bulk of that spending has been outside of Washington, DC proper, and spent in the suburbs--military spending in Northern Virginia ("Why Virginia's Become Mecca For Military Contractors" from Forbes Magazine) and health, science (NIH, NIST, FDA especially in Montgomery County), and military in Maryland, with telecommunications and computing spinoffs in NoVA somewhat derived in a broad ecosystem sense from military spending on telecomm and information technology.

However note that much of the increase in spending over the past decade, and discussed in the NYT article, has been military related (e.g., the Post series "Top Secret America," from 2010) and most of this spending isn't spent _within DC proper_ (e.g. contractors, defense agencies, etc.)

The real story is that from from the 1960s until 2000, DC wasn't capturing "its fair share" of this growth which was mostly captured by the suburbs.

And even today, almost 70% of the people earning wage income in DC continue to live in the suburbs.

What has happened is that DC is capturing a bit more of this growth in spending

Through the combination of a number of factors, over the past 10 years, DC has been able to reposition slightly vis-a-vis the suburbs in terms of capturing residents and other new development where proximity to the federal government is advantageous (trade associations, lobbyists, law firms especially).  It's now seen, generally, as a competitive location for certain types of business.  Especially because of the subway (see below).

But it's not a continuous upward trajectory.

DC continues to lose federal agencies--it is likely that the FBI will be the latest agency to leave the city--and other businesses with large numbers of employees (such as Intelsat or the Bureau of National Affairs) to the suburbs.

Plus DC generally isn't very successful competing for headquarters operations relocating to the metropolitan area (recently both Hilton and Northrup Grumman chose to locate in Northern Virginia).

Although it is true that military base consolidation and the relocation of some military facilities to the Navy Yard and the relocation to the area by related military contractors, has contributed somewhat to the revitalization of M Street SE and the Capital Riverfront District.

Right: rowhouses in Bloomingdale. 

Urban pioneering from the 1970s through the 1990s reaches critical mass around 2000

It is somewhat pejorative to use the term "urban pioneering," because like saying that Columbus discovered America while Native Americans were already here, the same goes for in-migration to the city, but...

Even after white flight in the 1950s, DC's population continued to decline.  In 1950, the population was about 802,000, in 2000 it was 572,000.

Yet, significant numbers of people were still moving into the city, despite prevailing trends, attracted to nice neighborhoods, typically comprised of historically significant residential building stock, the ability to get to work without having to rely on a car, cultural amenities, etc., despite the double whammy of declining quality of municipal services and increasing crime.

These "pioneers" helped to stabilize otherwise declining and shrinking communities and over time in some areas (such as Capitol Hill, Dupont Circle) built up large enough numbers so that they began expanding the boundaries of where they were willing to live--e.g. "Capitol Hill" moved from around the Capitol and Union Station to eastwards of Lincoln Park and the definition of Dupont Circle continued to move southward to 14th Street.

I would argue that around 2000 and onward, in-migration began to achieve critical mass in many neighborhoods, like Logan Circle and Bloomingdale, not just in Capitol Hill.  See the past blog entry "Revitalization in stages: Anacostia."

Transit

The same goes for transit oriented development.  From the opening of the WMATA subway system in 1976, it took about 25 years to begin seeing significant spillover development benefit from proximity to transit.

First this happened in Downtown and West End, and over the last 10 years in the East End of Downtown (assisted a bit by Verizon Center).  Then in places immediately outside the core (NoMA, Columbia Heights), and now further out.

Besides maintaining the economic relevance of the central business district, access to fixed rail transit contributed to the success of neighborhoods like Dupont Circle or Capitol Hill.

And over time, more housing proximate to transit is being built throughout the city, such as in Columbia Heights, Downtown, on U Street, H Street, etc., and even in places further out like Takoma and Fort Totten and Petworth.  This has significant positive benefits.

In any case, the biggest change in the dynamics of the metropolitan housing market in Washington is that neighborhoods with high quality transit remain in demand despite the vicissitudes of the market.

This favors DC because DC has 40-42 transit stations (two are on the border and shared with Maryland) with 30 stations in the core of the city.  It should be no surprise that in the core of the city, virtually every neighborhood with fixed rail transit service is either healthy or in the process of significant improvement.  (The area around Rhode Island Ave. Station languishes because of the persistent application of suburban rather than urban design.)

Before large houses and lots far from the core were seen as valuable.  With the real estate crash, many of these areas have lost 50% or more of their value.  (Although gasoline prices are expected to decline and so this may change somewhat, plus the relative economic success of the Washington region may mean that housing distantly located will still be somewhat valuable, at least compared to other metropolitan areas.)

Right: 1st and M Streets NE in NoMA, one block from the NoMA-Gallaudet subway station.

This favors Washington, DC specifically, but also places like Arlington, Alexandria, and parts of Montgomery County which have in-demand neighborhoods that are served by high quality fixed rail transit service.

Many people think that it's transit that matters most.  It's more complicated than that.

It's transit plus access to activity centers and employment in high quality neighborhoods.  Successful TOD at places that have no "there" qualities ("no there there") takes much much longer--and in fact may never be achieved.

And I didn't fully realize this til the last 18 months, but much of the desire for the Silver Line subway expansion in Northern Virginia is driven by a recognition that Fairfax and Loudoun Counties would need fixed rail transit to remain competitive for new development when compared to locations that already had subway access.

Continued crime reduction

Towards the end of the 1990s crime began dropping--in the early 1990s, murders in the city approached as many as 500 per year, and in 2012, the number was 88 ("Washington, D.C., finishes 2012 with fewer than 100 homicides," Los Angeles Times).  A focus on problem-oriented policing has made a big difference in the city ("Cathy Lanier Changes Policing in D.C. and Maybe Nation" from Governing Magazine) although so has outmigration from the city of poorer residents who have been displaced from changing neighborhoods.

Addition of multiunit housing

For the most part, DC's neighborhoods are typically comprised mostly of rowhouses or detached housing.  The buildings tend to be small and aren't typically occupied by large numbers of residents.

By adding multiunit housing, more people can be accommodated in a smaller footprint.  Plus, this type of housing appeals to different segments of the housing market that might have otherwise looked elsewhere for places to live.

Since 2000, a significant amount of new multiunit housing has been added to DC.  This is what supports the general economic improvement of the city and allows DC to capture a bit more of the region's growth than it had been capturing previously.

What has changed is the last 10 years is DC's ability to capture residents vis-a-vis other locations in the metropolitan landscape of choice neighborhoods

The city became much more competitive as a place to live beginning with the election of Anthony Williams, and his focus on improving the quality of local government, simultaneous with reaching the tipping point in terms of favorable attitudes towards living in the city (the "Friends" and "Seinfeld" effect).

The tipping point of a willingness to live in the city matters a lot.

As many urban pioneers as it seemed there were, there weren't enough to significantly move neighborhoods beyond stabilization.  That's why DC's retail languished for decades.

Only now, with the increase in population in many neighborhoods are you starting to see improvements in places like Petworth and 8th Street SE.

And the addition of large amounts of multiunit housing supports commercial district revitalization, retail growth, and transit frequency.

Schools as a long term issue that still is up in the air

This will be subject of another blog entry sometime in the next month (I have grand jury duty which limits my ability to do much of anything three days/week.)  But... it might not matter so long as families see charter schools as the solution to problems with local elementary schools.