Young people help transform D.C.-area economy

August 7, 2011

Three years ago, Erik Kimel moved back home to the Washington area looking to replicate his experience in New York connecting with like-minded young entrepreneurs who encouraged him and nurtured his fledgling Peer2Peer enterprise.

Instead, he said, he found disappointment. “It was kind of desolate — nothing going on in a networking sense,” said Kimel, now 24.

But all that has changed.

“Today, there are lots of Facebook groups for young entrepreneurs and Listservs for entrepreneureal meet-ups that didn’t exist,” said Kimel, whose Rockville-based firm works with students in kindergarten through 12th grade in peer tutoring. “You can apply to entrepreneurial programs that didn’t exist, or if they did exist, they didn’t target our age demographic,” he added.

An influx of 20- and 30-somethings here in recent years is transforming the economy and business culture in the Washington region, bringing an entrepreneurial edge. The region has become a hub of innovative youth-oriented businesses — from LivingSocial, to startups involved in developing smartphone apps, to trendy boutiques.

The District’s population of 25- to 29-year-olds grew to 69,649 in 2010 from 52,849 in 2000, according to census figures, a 31.8 percent jump. Though reliable regionwide census figures are not yet available, experts say a critical mass of young people is making an impact outside of D.C. as well.

A cottage industry of upscale amenities have cropped up catering to this highly educated, well-paid group, largely drawn here during the past three or so years by the strong job market.

Young people seeking housing have boosted the moribund commercial real estate sector, driving up demand for construction of new apartment units, while boosting rental rates and bringing down vacancy rates. “Apartments have come back,” said Guy Steuart III, senior vice president of Chevy Chase-based Steuart Investment Co., which is constructing a 390-unit luxury apartment complex on New York Avenue and L Street NW. “The demographics we’re building for is post college, post graduate school, first job.”

Trendy nightclubs, boutiques and eateries have breathed new life into struggling parts of the region. “The retail market is in great shape,” said Gregory H. Leisch, chief executive of Delta Associates, a real estate and economic research firm in Alexandria. The region “has the lowest vacancy rate in the United States.”

Business groups are especially targeting the demographic, enlisting their services to teach older members about social media while expanding networking events and incubator programs.

“Quite frankly Loudoun has a challenge. It doesn’t have the active night life that is attractive to young professionals, like in Adams Morgan,” said Tony Howard, president and chief executive of the county’s Chamber of Commerce, which last year established a young professionals group. “What we’re trying to do is create a network of folks like them to keep them rooted in Loudoun ... so they will be likely to stay.”

This week the staff at Capital Business talked to members of this new generation of business leaders about where they see opportunities in the region’s economy. Their stories follow.

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