When Northern Virginia landed one of Amazon’s two new East Coast headquarters in November, the victory appeared to prove that the Washington region could stand on its own economically and reduce its historical dependence on the federal government.
Now, the government’s partial shutdown has punctured that bubble of optimism and highlighted again the area’s vulnerability to the federal presence and its record of dysfunction and gridlock.
The immediate effect of shuttering a quarter of federal agencies has been the bite taken out of the region’s economy estimated at more than $100 million a day. More than a quarter of a million federal workers and contractors in the area aren’t being paid, and the ripple effects are sapping private businesses throughout the District and the Virginia and Maryland suburbs.
A long-term consequence is setting back an effort — begun after the 2013 shutdown and accompanying budget cuts known as sequestration — to forge a strong regional identity independent of the federal government.
Elected officials and business and civic leaders hoped to rebrand the region as a lively, attractive place to live, visit and do business regardless of the federal presence. They did so partly to lure companies such as Amazon to expand the area’s private sector. (Amazon CEO Jeffrey P. Bezos owns The Washington Post.)
Instead, the shutdown, now the longest in history, has generated a new burst of negative publicity about Washington that marketing and tourism executives said is reviving the area’s bad reputation around the country and abroad.
“It takes an all-too-familiar shutdown or sequestration to remind people of the shadow of the federal government and what it casts over D.C.,” said Cary Hatch, chief executive of MDB Communications, an advertising firm.
“We’ve got all this good stuff — a vibrant foodie scene, top-tier theater, great quality of life, but then the shutdown slows down our progress,” Hatch said. “It really does underscore that we coexist with this periodic political drama and discontent.”
The Washington region’s economy is sufficiently large that it can recover from the shutdown with minimal damage, provided the government reopens by February, according to George Mason University economist Stephen S. Fuller.
After that, if the standoff continues between President Trump and congressional Democrats over funding for a southern border wall, there would be significant effects on hotel and restaurant sales, local tax revenue and Metro ridership, Fuller said.
It helps that January is a slow month for tourism and that only part of the government is closed. The 2013 shutdown ended after 16 days but furloughed more than twice as many employees.
People suffering most in the region are federal employees and contractors at the low end of the income scale who have been furloughed or are being required to work without pay. Many do not have enough savings to cover necessities such as rent, groceries and utility bills.
Such workers are concentrated in the eastern half of the region, according to data released Friday by the Metropolitan Washington Council of Governments, or COG. It said communities where half of federal workers earn less than $75,000 a year include Wards 7 and 8 in the District; Prince George’s County inside the Capital Beltway; Laurel, Waldorf and Germantown elsewhere in suburban Maryland; and part of Alexandria and Woodbridge in Northern Virginia.
“All of the communities in our region are hurting a little, but some communities are hurting a lot,” COG Executive Director Chuck Bean said.
Social service agencies that help the needy are reporting increases in visits to food banks and inquiries about cash assistance to pay rent and utility bills.
The Manassas food pantry run by Northern Virginia Family Service has seen a 10 percent jump in people coming to pick up groceries. Most are federal workers or contractors, and some are people who haven’t sought help in a decade.
“It’s folks that we have not seen since the  recession, have been stable for several years, and now are finding themselves in the position of again needing assistance,” Andrea Eck, executive vice president of programs, said.
Many are bringing a friend, she added.
Fuller, who has tracked the regional economy for years, said that 145,000 of the 361,000 federal workers in the Washington region are not receiving paychecks. In addition, he said, about 112,500 federal contractors are out of work.
The total cost of that hole in the regional economy is $119 million a day, or 7.3 percent of the area’s total output, Fuller said.
Federal workers have been paid retroactively after previous shutdowns, and Congress has passed a bill to do the same this time. Based on experience, however, the contractors would not be reimbursed. If that happens, the total overall impact would be lost output of $46 million a day, or 2.8 percent of the region’s production, according to Fuller.
“This becomes bigger the longer it lasts, but it’s starting with a fairly small footprint,” Fuller said.
The shutdown also injures the large numbers of businesses that rely indirectly on federal activity.
Kristina Bouweiri, owner of Reston Limousine, the area’s largest limousine and bus company, has worked for decades to diversify her business by reducing its dependence on federal contracts. Only a tenth of her $28 million in annual revenue comes directly from the federal government, compared with four-fifths in the 1980s.
But count her among those hurt by the shutdown.
“We work with a lot of international organizations, and many of them have canceled their January trips because they were coming to meet with [now furloughed] federal government officials,” Bouweiri said. “The government workers aren’t eating out. They’re not hiring buses to go on wine tours.”
Overall, her business is down 15 percent.
“The shutdown is bad for everyone, when you have such a large group of people not working,” Bouweiri said. “It really affects every resident of the DMV.”
The shutdown has put the convention and tourism industry on red alert. Destination DC, the District’s official marketing organization, immediately revived the “DC Is Open” campaign, which it created in 2013 when the shutdown hit during the busy fall tourism season.
The goal is to let people know that although the Smithsonian museums and zoo are closed, plenty of other entertainment remains available.
“You can still come and enjoy a Caps game or theater at Arena Stage or . . . other world-class museums” such as the Phillips Collection or Newseum, Destination DC CEO Elliott Ferguson said.
He acknowledged that much damage has been done, especially to the city’s image overseas.
“When you’re in a different country, and the news all comes from D.C., and it’s all focused on politics, then there’s a perception that it’s not the most fun or attractive place to go in the U.S.,” Ferguson said. “We hope this doesn’t continue on to March or April, which is a peak period for us.”
Like many residents, Ferguson pointed to one upside of the government’s closure: the drop in traffic. He said, “I just came from a lunch meeting, and the first thing they said was, ‘Wow, it’s so easy to get around.’ ”