An economic revival has spread into nearly every corner of the nation's capital this spring, pushing the District's unemployment rate to its lowest level since 1990.
Weakened by years of federal downsizing, a dysfunctional city government and an exodus of businesses and middle-class residents, the District is finally bouncing back. A strong national and regional economy and restored confidence in the District itself are helping the city register its strongest housing sales and biggest office building boom in a decade.
The scenes of the recovery are showing up in all pockets of the city. On U Street in the heart of the District, a historic jazz club that for three decades sat fire-scarred and shuttered is about to be reborn. Logan Circle, a grim downtown drug market a decade ago, is being revitalized by newcomers like Donnet Yatsko, a transplant of San Diego who plans a "reverse commute" to a job in Rockville from her new condominium on the circle.
Along upper Georgia Avenue, a construction crew recently hoisted a 25-foot-long Safeway sign into place as part of a $750,000 store renovation in a down-at-the-heels neighborhood. South of Suitland Parkway, new town houses are arising from abandoned, derelict apartment buildings.
And there's a human side, too: John Lyons, a 45-year-old District resident, has his first steady job in five years, a beneficiary of a shortage of workers that had pushed employers to look harder for recruits.
Reports clearly document the rebound. The District's 6.8 percent jobless rate in April was its lowest since August 1990. Just a year ago, the city's unemployment rate stood at 9.2 percent. The number of unemployed D.C. residents declined to 19,000 in March from 24,700 in the same month a year earlier.
Home resales in the District in April rose 11 percent from April 1998, while condominium and cooperative sales increased by 30 percent, according to Pardoe Real Estate ERA.
"A hallmark of the present economy is that all groups are benefiting across ethnic, age, education and skill lines," said Mark Zandi, chief economist at Regional Financial Associates in West Chester, Pa.
While the District's economy has improved markedly, its jobless rate is still three times the levels in the booming Washington suburbs. Although chronically unemployed District residents are finding work, the jobs they are getting are often at or near the minimum wage.
But investors are looking at parts of the city that they formerly shunned and employers are hiring D.C. residents they weren't considering a short while ago, employment experts said.
Lyons, a longtime printing industry employee, had not had steady work since 1995 because of health problems, he said. He worked on and off for his uncle's street vending business and when the uncle left town in January, Lyons was unemployed again.
Lyons's resume was the kind employers don't typically look at twice. Then, he took a week-long work orientation program with Jubilee Jobs, a District-based nonprofit employment counseling and referral agency, and with its support, landed a job with a District copying company, running its machines during the night shift. "I feel very good about the job, particularly when they said, `We don't fire someone. You fire yourself.' It's up to me. I'm very comfortable with that."
The upturn is affecting all parts of the city. The District's more upscale precincts are benefiting from the region's overall economic health as well as the new wealth generated by a soaring stock market.
Developers are buying up vacant lots in high-end neighborhoods like Georgetown, with plans to build expensive luxury condominiums, upscale hotels and movie theaters, aimed in part at luring the newly minted millionaires at suburban high-tech companies.
Next year Millennium Partners of New York, for example, will complete construction on a $260 million complex of condominiums, a luxury Ritz-Carlton hotel and a huge, high-end health club on nearly an entire city block in the District's West End. The company will soon begin construction on a similar project abutting the Whitehurst Freeway in Georgetown.
Nothing makes the District's booming economy more apparent than the cranes, bulldozers and scaffolding that mark new office construction downtown. Vacancy rates are at their lowest point since the early 1980s and office rents are rising. More than 3.3 million square feet of office space is under construction or renovation in the city -- three times as much as a year ago.
What's new in the District's current revival is the movement of investment dollars outside the main downtown commercial corridor.
At 11th and U streets, for example, Al Afshar stands amid the lumber, cables and sawdust of a $2 million restoration of the old Bohemian Cavern. A jazz club that once featured Duke Ellington, John Coltrane and other headliners in its heyday, the club was gutted by fire during the downtown riots that followed the murder of Martin Luther King in 1968.
But Afshar will reopen the club this summer. "I've been in business in D.C. for 22 years," said Afshar, who also owns a club in Georgetown. "I love the city." But it was the improvement in the District's economy that persuaded him to pursue the project now.
The revival of the housing market also has spread far beyond the wealthy neighborhoods of Northwest Washington, aided by a $5,000 federal tax credit for first-time home buyers enacted by Congress in 1997.
One of the tax credit's beneficiaries will be Donnet Yatsko. A marketing executive for MRIS, the manager of many of the area's real estate listing services, she has chosen Logan Circle as her future home. Her arrival this month from San Diego coincides with a burst of upscale condo and apartment construction in a neighborhood filled with historic mansions and apartments.
"The energy is in the city -- all kinds of people, the flavor, the smells and everything," she said.
A recent survey by the Greater Washington Research Center showed that 70 percent of the District home buyers in 1998 took advantage of the $5,000 tax credit. While about 60 percent of the buyers were simply moving to a new house within the District, the remainder were new arrivals to the city, the survey showed.
Those migrating to Washington are more likely to be singles and couples without children, reflecting the persistent struggles of the D.C. school system, which has reaped few of the benefits of the economic boom so far.
About two miles north of Logan Circle, in the Petworth neighborhood near Georgia Avenue, Nicole Greene has bought her first home -- a three-story row house. The 27-year-old social worker, a native of Brentwood, Md., settled upon the neighborhood after she discovered that she couldn't afford to buy a house in more established areas like Brookland near Catholic University.
She will make her home in a neighborhood whose residents have welcomed her and are working hard to improve the street. "This was the fourth contract that I had on a house," Greene said. "The problem with the market is that everybody has started to hear about it. There are serious bidding wars going on out there. When I first heard about the property, I was skeptical. But the Metro is coming, and it's exciting."
As crime has dropped and the city services have gradually improved, the District's appeal to tourists also has blossomed. The Washington region was host to 21.2 million travelers last year, up 8.2 percent from 1997. For the first time in two years, consumers ranked the region among the top 10 destinations that they wanted to visit this summer.
Last week, as two busloads of young sightseers from Chicago pulled away from the National Shrine of the Immaculate Conception in Northeast Washington, members of an eighth-grade church group from New Haven, Ky., pulled in. Were any of the children's parents anxious about a trip to the District? "Just one," said group leader Lee Haydon, and those fears were quickly put to rest.
Even economists are believers in the District's new strength and said they don't see any serious threats to the city's economy, at least not in the short run.
A steep drop in the stock market would erode consumer confidence and spending. If a market drop coincided with a upturn in interest rates, the District's housing recovery could falter. But that's not part of anyone's forecast, economist Zandi said. His biggest worry is a possible overexpansion of office space.
Stephen S. Fuller, a regional analyst at George Mason University, however, warns that a slowing of the U.S. economy would undercut the tourist and lodgings businesses here, particularly conventions and business trips, which account for one-third of the District's tourist trade.
"The only thing the District is really vulnerable to now is a change in its reputation -- a failure to deliver on its promises," Fuller said. "That would make investors more wary."
On a table in the office of Douglas Patton, deputy mayor for economic development, are a dozen manila folders containing plans for new economic investments in the city, all requiring support from Mayor Anthony A. Williams's administration.
"We have a lot of interest in the city," Patton said. "The expectations may be overly high, but we have an opportunity now. We have to take advantage of it."
CAPTION: Easier Street For Job Seekers (This chart was not available)