Greed Outruns Growth in Columbia Heights
In four days, the 1968 Martin Luther King, Jr., riots wrecked Columbia Heights. They left broken windows, abandoned storefronts, and empty lots. A 1999 metro rail station stop lifted the neighborhood up again. But like Aesop’s fable, greed escalating rent too quickly. It may well kill the goose.
Columbia Heights prospered long before the riots. In the 1920s, it emerged as a center of fashion and retail in Washington, D.C. The Tivoli Theater embodies that roaring opulence. Built as the largest theater in DC at the time, the four-story, Mediterranean Revival-style Tivoli occupied a whole block of 14th Street, where it seated more than 2,000.
The riots left the Tivoli physically intact, but the neighborhood suffered for the next thirty years. In 1967, 200 businesses served its 14th Street corridor, but by 1980, only 35 did. The corner turned in 1999 with the metro station. Over the next fourteen years, owners built or renovated nearly 3,000 rental units within one-half mile of the rail station. In 2005, the GALA Hispanic theater company moved into the Tivoli, but things really started moving in 2008 when Target arrived at the DC USA center.
Cheaper housing costs made it desirable for people wanting shorter commutes, and money arrived to renovate houses long in need of repair. Fast-casual restaurants moved in: Pete’s Apizza, Potbelly’s, Five Guys, Panera, Cava, Z-Burger, and Chipotle. By 2010, Meridian Pint had joined Red Rocks to anchor a restaurant strip on 11th Street with Kangaroo Boxing Club and Maple that brought New York Times raves. The Tryst Group brought the Coupe to occupy the street level of a formerly blighted, but newly renovated, apartment building. Through all this, Columbia retained its diversity.
Since then, greed has been outpacing growth. Empty storefronts have returned as high rents have driven out many innovative, small businesses around the metro. A Wawa replaced Pete’s, Potbelly’s, and Five Guys when their leases ran out. The building owners raised the businesses’ rent so high that it would strip all their profit. Increasing wages in D.C. squeezed profits further.
The apartment dwellers living above would have preferred funky pizza and burgers, and the Wawa draws fewer renters. As apartment demand goes down, so does price. The apartment buildings are seeding their own downward spiral and taking the whole neighborhood with them.
The DC USA owners exemplify that backward economic thinking. Staples, Payless, and Panera moved out in the past few years, and their storefronts remain empty. Instead of lowering the rent to retain those tenants or to attract new tenants and more foot traffic, the building owners are renovating the storefront to change their fortune.
Investing in tenants with cheaper rent would have let the businesses thrive. Thriving businesses would have brought more people and would have generated larger rents in the future. Greedy property owners who want their money now are increasing the rent too fast and stunting their own growth. Escalating rents and wages squeezed them out, and new businesses are not replacing them. When something stops growing, it begins to die.
 The Venue - History of Tivoli Theatre, Gala Theater, http://en.galatheatre.org/2016/05/history-of-tivoli-theatre.html.  Id.  Haben Kelati, Columbia Heights is a vibrant, diverse and, for D.C., affordable neighborhood, Washington Post (Oct. 10, 2019), https://www.washingtonpost.com/realestate/columbia-heights-a-vibrant-diverse-and-for-dc-affordable-neighborhood/2019/10/09/63b9c0f0-e92a-11e9-9c6d-436a0df4f31d_story.html.  T.R. Goldman, The Surprising History of One DC Rowhouse, Washingtonian (Apr. 19, 2016), https://www.washingtonian.com/2016/04/19/surprising-history-one-dc-rowhouse/  Lea Radick, Columbia Heights takes off, Washington Post (Oct. 18, 2013), https://www.washingtonpost.com/express/wp/2013/10/18/columbia-heights-takes-off.  The Venue - History of Tivoli Theatre, Gala Theater, http://en.galatheatre.org/2016/05/history-of-tivoli-theatre.html.  Marissa Conrad, A First Look at Columbia Heights’ New Target (Mar. 5, 2008), https://www.washingtonian.com/2008/03/05/a-first-look-at-columbia-heights-new-target; Lea Radick, Columbia Heights takes off, Washington Post (Oct. 18, 2013), https://www.washingtonpost.com/express/wp/2013/10/18/columbia-heights-takes-off.  Brendan Spiegel, In Washington, D.C., Columbia Heights’ Hip Strip, N.Y. Times (Feb. 20, 2011), https://www.nytimes.com/slideshow/2011/02/20/travel/20110220-surfacing.html.  Tierney Plumb, Columbia Heights to get more condos, Washington Business Journal (May 26, 2010), https://www.bizjournals.com/washington/stories/2010/05/24/daily17.html.  Haben Kelati, Columbia Heights is a vibrant, diverse and, for D.C., affordable neighborhood, Washington Post (Oct. 10, 2019), washingtonpost.com/realestate/columbia-heights-a-vibrant-diverse-and-for-dc-affordable-neighborhood/2019/10/09/63b9c0f0-e92a-11e9-9c6d-436a0df4f31d_story.html; see also D.W. Rowlands, How the region’s racial and ethnic demographics have changed since 1970 (Jan. 13, 2020), dcpolicycenter.org/publications/regional-demographic-shifts.  Amanda Michelle Gomez, Wawa's Presence Is Growing in D.C. Longtime Business Owners Aren't Thrilled, Washington City Paper (Aug. 15, 2019), https://www.washingtoncitypaper.com/news/city-desk/article/21082599/wawas-presence-is-growing-in-dc-longtime-business-owners-arent-thrilled.  Id.  DC Minimum Wage to Increase to $14.00 Per Hour Beginning July 1, 2019, Department of Employment Services, Office of Wage Hour Compliance, does.dc.gov/service/office-wage-hour-compliance.  DC USA storefront redesign which seems designed to cater to a more upscale set of retailers, such as those selling… penny farthing bicycles, Prince of Petworth (Sept. 3, 2019), https://www.popville.com/2019/09/dc-usa-storefront-redesign-columbia-heights.