Washington D.C.'s Comeback Post Pandemic

Introduction

Washington D.C., just like every major city or densely populated area in America, suffered greatly from the effects of the Covid-19 Pandemic. However, city officials are taking the negative effects felt in D.C. seriously, pushing forward for restructuring Landlord-Tenant laws to solve the issues around piling up unpaid rent, sealing the deal to bring the Commanders back to D.C. at RFK Stadium and a $515M renovation for the Wizards/Capitals at the Capital One Arena to reunite the community and give residents a new reason to move back to the city, and a big push to crack down on crime that had spiked dramatically in 2023. Although federal workforce cuts have been a headwind for unemployment, the effects have not be as drastic as expected due to the robust private sector in and around D.C., and return to work policies from the federal government seem to be helping support the D.C. economy by getting people back in the city. All of these factors play into a Washington D.C. with a strong outlook for tomorrow, and a chance to act while others are fearful in the D.C. real estate market.

Changing Landlord Tenants Laws in DC: The RENTAL Act

Washington D.C. has long had highly restrictive laws against landlords, which is now in the process of making a big move in the other direction with the D.C. Council Passing an amended RENTAL Act on September 17th 2025, originally proposed by Mayor Muriel Bowser in February of 2025.

Landlords have always dealt with restrictive regulations around their real estate in Washington D.C. with laws such as the Tenant Opportunity to Purchase Act (TOPA), Rent Control, and tenant friendly eviction proceedings. But these restrictive rules against landlords really became an issue in 2020 when the Emergency Rental Assistance Program (ERAP) was amended to be easier for tenants to apply for and obtain, and tenants began to abuse loopholes in the law to continuously reapply for ERAP assistance in order to delay evictions. This resulted in Unpaid Rent going from $11M in 2020 to $147M in 2024, a 1,236% increase, and Washington D.C. having the highest average Unpaid Rent per unit at $2,207 per unit as of April 1st 2025.

The result is a 79% reduction in housing starts in 2024 compared to 2023, and the lowest total starts we’ve seen since 2010. Interest rates and broader market conditions have brought down housing starts across the country for multifamily by 25%, so while the market plays a factor here, the dramatic difference for D.C. in a lack of new housing being developed is clearly an outlier. CEO of the Small Multifamily Owners Association, Dean Hunter, found in a study that estimated landlords across the city accrued $1 Billion in debt since the beginning of the pandemic. Even the most active developer in Washington D.C. over the last 5 years, MRP Realty, has been unable to develop shovel ready projects due to financing concerns related to these Unpaid Rent numbers. This poses a huge issue for tenants as well, because if developers and landlords are unable to secure financing to develop due to the regulatory environment, the supply of housing will stay flat resulting in increased rent prices for tenants. (Source 1) (Source 2) (Source 3)

Mayor Bowser and the D.C. Council are taking this issue seriously, and are moving quickly now to put new legislation in place to solve D.C.’s housing crisis. Mayor Bowser put forward a new law in February of 2025, the Rebalancing Expectations for Neighbors, Tenants, and Landlords (RENTAL) Act. It has since passed both rounds of votes from the D.C. Council, once on July 28th 2025 and again this week on September 17th 2025, with a few amendments made, and is on its way back to Mayor Bowser for a final signing off which she is expected to do. The major changes in the RENTAL Act, once signed off by Mayor Bowser, are as follows (Source):

• Properties <15 years old will no longer be subject to TOPA. Rule will automatically apply retroactively to buildings built between 2010 - 2025 (amended downward from the originally proposed 25 years)
• Shortened the timeline landlords are required to alert tenants before filing for eviction from 30 days down to 10 days (no lead time was required pre pandemic)
• Hearing summons period lowered from 30 to 14 days.
• Gives judges the right to use discretion to not throw out cases where there are "deficiencies" and allows errors to be corrected without throwing out the case
• Protections for Domestic Violence victims with an expedited process
• Made it easier for landlords to request rent through the rent registry
• Owners of two or fewer properties will not have TOPA apply on multifamily properties of 4 units or less

The Emergency Rental Assistance Reform Amendment Act of 2025 was also passed earlier this year on May 28th 2025, which allowed judges to have discretion to allow eviction cases to proceed even when tenants are applying for the Emergency Rental Assistance Program (ERAP) to stop tenants from purposefully abusing that rule to get indefinitely delay eviction cases. It also provided stricter guidelines around being able to apply for ERAP, both of which should help landlords have an easier time evicting tenants that are not paying rent (Source).

Between these two acts, D.C. will be taking a big step toward easing regulations to allow housing providers to do their jobs. Not only will this make property management much easier in the city, but it will also draw interest from more real estate investors into the city and have a positive impact on liquidity, two major tailwinds for future cap rate compression. In a report from JLL, you can clearly see that as regulations lower, transaction volume increases substantially

Commanders Officially Coming Back to RFK Stadium in NE D.C.

A major issue for D.C. among many cities coming out of the pandemic was around what could be done to get people back in the city that had left with the advent of remote and hybrid work. And what better avenue to draw back interest and unite the entire city than Sports? The Washington Commanders finally sealed the deal with the City to move their stadium back from Landover Maryland to the currently unused RFK Stadium in NE D.C. on September 17th with approval from the D.C. Council. The Commanders and the District are now getting to work on revamping the stadium, with an investment of $2.7 billion from the Commanders and $1 billion from D.C., and an estimated completion date of 2030. RFK Stadium sits on 174 acres, and the redevelopment will also include 5,000 - 6,000 new housing units and an “entertainment district” with shopping and restaurants.

This will be just a few miles from the Navy Yard neighborhood, which continues to undergo complete redevelopment with another 15 acres in early stages right now by Redbrick LMD. Redbrick is also in the process of developing the Bridge District and St Elizabeth East, both right across the River from the new stadium. Redbricks total development in Navy Yard, the Bride District, and St Elizabeth’s East will total 8 million square feet of new development at completion. Along with the Commanders redevelopment, this entire section of Washington D.C. will be completely transformed into a highly desirable area. This is on the back of the $515 million investment from the city into the Capitol One Arena, expected to be completed by the Fall of 2027, to keep the Washington Wizards and Washington Capitals in the District, with another $285 million to improve the surrounding Gallery-Place-Chinatown neighborhood. These developments prove D.C. is focused on the long term revitalization and continued thriving of its city culture. (Source 1) (Source 2) (Source 3)

Crime is Dropping in the District

The Pandemic also created some big issues with crime in the District, which gave residents further reasons to find new accommodations outside the city. Homicides rose 14% from 2020 to 2021, and 38% from 2020 to 2023, but a surprising turn around was made in 2024 to see a 46% decrease from 2023 to 2024. This was achieved by thorough targeting of crime networks in certain neighborhoods and implementing Project Safe Neighborhood in April of 2022, and the passing of the Secure DC law on March 11th of 2024, a comprehensive crime bill to institute stricter crime standards. (Source) (Source 2)

Although the crime situation improved dramatically in 2024 for D.C., when comparing the number of homicides to the total population, D.C. still ranked #4 in 2024 for the most homicides per capita (Source). This has long been an issue for Washington D.C., but the recent deployment of federal troops to assist with crime could mark another big turning point to keep D.C.'s positive momentum going toward curbing these issues.

On August 11th, federal troops were deployed to help reduce crime in the District, and looking at the period from August 7th - August 25th 2024 to August 7th - August 25th 2025, the District saw a 49% decrease in violent crime. The D.C. CRIMES Act also recently passed the House on September 16th 2025, which would provide further stricter standards on crime in the District if passed in the Senate. The city has also made strides this year to further address crime, particularly Juvenile crime which has been a major contributor, with the Juvenile Investigative Response Unit in April of 2025. All of these factors should result in a continued trend of drastic crime statistics improvement in D.C. which is a positive catalyst for residents feeling safe to move back into the city. (Source 1) (Source 2)

Unemployment, GDP, and Agency Relocations/Cuts

Of course the big concern with D.C. right now is federal agencies relocating out of the area and or reducing their workforce. So far we have only seen unemployment in D.C. at 6% in August of 2025 according to the BLS (Source), up from 5.3% in August of 2024. This is still pretty significantly above the national average of 4.3%, but not out of control, which could in large part be due to the robust private sector in and around D.C. picking up talent leaving the public sector. D.C.’s GDP grew by 0% in Q1 of 2025, which actually outperformed the national average at -0.5% by half a point. The Q2 2025 GDP for D.C. will be released on September 26th 2025 (Source) and will help give further insight into the real effects on the D.C. economy. The return to work mandate by the federal government to be in the office 5 days a week likely contributed to the outperformance in GDP for D.C. in Q1 of 2025.

It’s important to keep an eye on which agencies are relocating or cutting jobs and where those agencies are currently located in the city to know which neighborhoods will be affected the greatest. So far we’ve seen the following major cuts / restructurings:

• Department of Agriculture (USDA - 1400 Independence Ave SW): Relocating most D.C.-area staff (~2,600 positions) to five regional hubs (Raleigh, Kansas City, Indianapolis, Fort Collins, Salt Lake City). About 2,000 staff will remain in D.C.
• Housing and Urban Development (HUD - 451 7th Street, SW): Moving headquarters from D.C. to Alexandria, VA (still in D.C. Metro - 2415 Eisenhower Avenue) (~2,700 employees).
• Health and Human Services (HHS - 200 Independence Ave SW): Reducing staff by ~10,000 through layoffs and consolidations. Target headcount ~62,000 (down from ~82,000).
• Veterans Affairs (VA - 810 Vermont Avenue, NW): Reduced workforce by 17,000 as of June 2025, on track to reduce by 30,000 by September 30th 2025.
• Education Department (400 Maryland Ave SW): Cutting ~1,300 employees (roughly half of its workforce).
• Department of Defense (Pentagon - 1400 Defense Pentagon) - Reduced workforce by ~5,400
• State Department (2201 C St NW) - Reduced workforce by ~1,300 employees
  
  

Although this is a headwind to D.C. currently, the employees that remain in the federal government are required to be in the city 5 days a week, a big help for migration back to the city and businesses getting more foot traffic. New administrations will likely change the trend of reducing the federal workforce in the future, and D.C.’s expanding private sector, especially in the tech and tech startup fields, provides a strong anchor against a shrinking federal workforce.

Conclusion

D.C. has had a very interesting past few years, but with city officials taking the issues at hand seriously with legislative action, and big steps toward improving the community aspects of the city, the future looks bright for D.C. and the greater metro area. I encourage you to let me know what you think about the D.C. market, and any other big cities in the United States that you think are on the brink of making a big comeback post pandemic!