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A Richmond Fed Community Conversations visit to the nation’s capital this month informed Bank leaders about efforts to foster and preserve homeownership for residents and to shore up small business owners in growing sectors of Washington, D.C.

Community Conversations are the Bank’s visits with business and community leaders to learn about a region’s well-being and to exchange economic updates and ideas. On October 11–12, Bank President Tom Barkin, Regional Executive Andy Bauer and Community Development Regional Manager Peter Dolkart met with staff from the mayor’s office, neighborhood preservation officials, nonprofits working to ensure affordable housing and foster home ownership, and with business leaders and developers behind a significant project taking place east of the Potomac River called The 11th Street Bridge Project.

When the project is completed in a few years, it will result in the construction of a new thoroughfare and an accompanying footpath that leads from the Anacostia community in the District into the heart of downtown.

“There is an automobile bridge already there,” Dolkart explained. “But the foundations for an original bridge are still there, too, and developers want to turn this into a park over the river. When a project like this blossoms, property values go up.”

Dolkart noted that he, Barkin and Bauer were impressed with not only by how much thought was being given to the opportunities to create thriving residential and retail spaces due to the project, but also to the need to stabilize the area’s current residents and business owners.

 “This is an interesting moment in time, where they can see a potential issue and they are already planning to address it,” Dolkart said.

Bauer echoed those sentiments.

“There is $1 billion in investment slated over the next 10 years for Anacostia,” he said. “How do you manage the growth so that the people living there now can take advantage of it rather than being displaced? If the value of your business doesn’t increase, are you going to be able to pay the taxes for your property? If you’re a homeowner on a fixed income, as values go up and push taxes up, that could end up displacing current homeowners and commercial property owners. If you look at the history of D.C., it was historically focused on growth and a lot of people were pushed out. With the current leadership in Washington, D.C., you hear from not only the mayor, but also others, and that the focus is equitable growth. There is a really nice set of collaborative people at the table, and they have a shared vision and have been including stakeholders in the community.”

Bauer also noted several other interesting efforts that are being implemented to drive economic activity, subsidize costs for renters and promote home ownership. 

“D.C. has several different funds that target different segments of the population and offer them help to buy a new home,” he said. “Because D.C. is a gateway city for the commercial real estate market, they are leveraging that to set aside funding for affordable housing programs. There really is intentional thought about addressing the equity gaps that exist in the city.”

While housing is a huge focus, D.C. leaders understand the need to cast wide nets of support, Bauer said.

“How do you prevent teachers from leaving and going across the District line into Maryland or Virginia? They are spending money to make sure they are keeping teachers and because of the high teacher pay, retention in the D.C. school system is high,” he said.

Another area of focus for the education system is student retention, in an era where high school students found themselves working during the Covid pandemic to help support their families and are now struggling to choose the classroom over a paycheck.

Leaders want to help students in this quandary find ways to earn money that also provides them with school credits, Bauer said.

A surprising discovery for D.C. leaders has been the number of residents who turned entrepreneurial and established small businesses during the pandemic. With this in mind, various community leaders have established financial centers to help them apply for grants and for federal and state funding.

The Community Conversations team learned about these efforts during a roundtable discussion with the leaders of CDFIs who fund projects in the Greater Washington area, including the Washington Area Community Investment Fund (Wacif), Capital Area Asset Builders and the Latino Economic Development Center (LEDC).

The team came away with the realization that “D.C. is far ahead of the game than a lot of cities,” Dolkart said. “The CDFIs are small business lenders, and they feel like they have the full backing of the mayor’s office. They feel like this is the time.”

That collaborative spirit and energy were palpable across the board.