Slightly more than a decade ago Washington's economic health was declared terminal by some, crippled at best. The city was still reeling from flying bricks and shooting flames of the late 1960s riots, weekly mass demonstrations and the height of white flight. At the same time President Richard Nixon was calling Washington the crime capital of the nation.
"The outlook for downtown Washington is very poor," one prominent local businessman said only eight years ago. "Short range, the future of downtown Washington as a retail and business center is not particularly attractive," said another.
Despite the prophets of gloom and doom, a boom has taken over Washington. In the past decade Washington has become the mecca of many major businesses and trade associations that daily face, as often in reverence as irreverence, the federal agencies in Washington which regulate them. It is mostly because of those agencies and the tons of pages of regulations that they have created since the late 1960s, that have brought dozens of new organizations here.
And what brought all this government to town? One response is the late President Johnson's expansive Great Society. Another is public interest groups that pressured the government for the regulations.
Consequently, all this has changed the look and life of Washington.
"Ten years ago, it's hard to believe it, but I sensed a real feeling of concern that the city was heading in the wrong direction on a lot of things," said Ken Sparks, executive vice president of the privately run city boosters called the Federal City Council. "It was a year or two after the riots. There was a concern about crime here.There was a lack of interest in new investment in the city. There was still a feeling that the city was not the place to be. The future of the city, many felt, was in doubt."
Since then the demand for space has expanded downtown's boundaries as well as the income of those who work there. Construction abounds, but the poor are being displaced by office buildings and new homes of office workers. Above the quietly rolling Metro subway, roller skaters make playgrounds of the streets at night.
"They want to be near the seat of government, Congress, regulatory agencies and the executive offices," real estate broker Jay Franklin said of the groups that have flocked here. Franklin is a broker at H. G. Smithy, a real estate brokerage firm that specializes in large moves. "The federal government is playing such an important role in the economic lives of their organizations they feel they have to be here. They want to be able to influence any policy decisions . . . they want their presence to be felt here."
"It's been going on for a number of years," Franklin said. "But as the federal government has expanded, we're seeing more and more of the importance of being here.
"Also, New York, a couple of years ago, really, really started going downhill," Franklin said. Organizations "began to say, 'Hey, why are we here?'"
Since then, there's been an avalanche of businesses that feed off of other businesses and government regulations, most notably, the three As: accountants, attorneys and associations.
According to figures supplied by the Metropolitan Washington Board of Trade in 1970 New York contained 31 percent of national headquarters of associations compared to 21 percent for Washington, 18 percent in Chicago and 30 percent elsewhere. This year Washington has become No. 1 with 28 percent of trade association headquarters compared with 23 percent in New York, 13 percent in Chicago and 36 percent scattered elsewhere.
More than 9 million square feet of office space or 40 percent of downtown offices are occupied by the three As, said one expert on Washington, who for business reasons did not want to be identified. Trade associations have grown from about 21 relocations to the city a year in 1970 to about 50 last year. In 1970 about 15 law firms relocated offices here. That has jumped to about 80 for last year. And although only 15 accountant firms relocated to the city in 1970, about 40 came here last year, the Washington expert said.
"It's an evolution and the evolution of Washington is accelerating," the expert continued. "At worst, the growth pattern will be level."
"Not only has it changed physically, there's a real change in the personality of the town," the man added. "Ten years ago you never would have imagined people roller skating down K Street. The town closed up at 6 p.m.
"Washington is evolving along the way of the great European capital cities, London, Paris, they're social, financial capitals. The United States is a young country and Washington is a young capital city."
"The middle of the Kennedy administration, the influx started," said Forrest Rettgers, executive vice president of the National Association of Manufacturers whose office moved here from New York six years ago. "That's when the technical things started. The regulations came out and business felt they needed to be here."
Since then, many big cash grabbers of America's top corporations and law firms have either opened headquarters or offices here including Xerox; Honeywell; Dow Corning; at least two Wall Street law firms, Sullivan and Cromwell Wall, and Woods and Dawson; Time Life books, a division of American Telephone and Telgraph; Mobil Oil; Visa USA and scores of others. They're here to combat regulations from the Environmental Protection Agency, Occupational Safety and Health Administration, Energy Department, Federal Trade Commission, and at least 120 others. Nobody knows for sure how many agencies there are.
All this seriousness and work orientation has taken the fun out of the city, one old-time Washingtonian groused. The new people in Washington use the city only as a stepping stone to better things. There are too many Mercedes, but not enough real money.
"People are more educated, but they're not more sophisticated," NAM's Rettgers said. "People are trying to be something they're not. Nobody was born poor and no one came out of a ghetto," Rettgers said the new Washingtonians pretend. "This is a tinsel and phony town."
"There's a tremendous amount of money here (as opposed to) around the country," Rettgers said. "But there's a lot of debt. It isn't as friendly a town as it used to be."
Federal government and private sector salaries amount to "well over $1 billion in cash floating around Washington" at one time, a Metropolitan Washington Board of Trade employe said. And as a result, more places to spend that money have appeared such as two and possibly three Bloomingdales stores, I. Magnin and Neiman-Marcus as well as an assortment of shopping malls such as Mazza Galerie, White Flint, Lakeforest and the extension of Tysons Corner.
Friendly or not, Washington is big. Downtown Washington has expanded, from one real estate broker's estimate, into Crystal City and Rosslyn, almost to Georgetown, and is creeping past the formerly forbidden 14th Street. Washington, once considered to be dominated by government, now has more than half of its leased office space occupied by private industry. Washington has the highest percentage of office buildings built on speculation rather than actual construction orders than any other city in the country, one Washington expert said.
Between March 1977 and March 1978 employment in the area increased by 27,000 jobs, but only 1,600 of those jobs were federal, the expert said. After the 1980 and 1990 censuses, Washington's Standard Metropolitan Statistical Area will increase by at least two counties, the expert predicted.
In the Washington area in 1960, 28 percent of the jobs were held by professional, technical, administrative or managerial persons, while that number jumped to 35 percent in 1970, 37 percent in 1974 and a projected 40 percent by next year. Federal military employment in the area is down by 28,000 persons since 1970 while it is up 18,000 in civilian jobs.
Another report, however, said the growth in the city is slowing down, but its outer fringes are expanding, a growth that "is strongly related to the economy of the Washington metropolitan area."
"The economy of the SMSA has continued to expand in the 1970s despite the great slowdown in its population growth," said the preliminary report by the Center for Municipal and Metropolitan Research. "Economic growth has continued partly as the result of changes in the composition of the area's population, employment and labor force."
All this, the report continues, has changed the face of Washington to one in which the size of households has decreased, more women are working, blacks and other minorities are experiencing upward job mobility plus there is "a proportionate increase in professional, technical managerial and administrative jobs."
"The rate of most of these changes seems likely to moderate during the 1980s," the report continues. "If this happens, and if population growth does not increase again in response to some presently unforeseeable national emergency, the result will be slower SMSA economic growth than in recent decades."
Expansion of residential growth outside of the metropolitan area, however "tends to draw economic growth away from the metropolitan area, deprive the area of transit ridership and revenues, increase state highway costs, add to non-point source pollution of the water supply, increase air pollution overall, increase per-capita demand for energy and remove jobs further from unemployed central city youth."
"People are coming, but people are also leaving," said the Federal City Council's Sparks. "The price of housing if forcing everyone out."
The new, more populous Washington is "good in a sense. These are generally people who are highly skilled, make good salaries, spend a lot of money. But they displace people and have some environmental impact."