January 2, 2012 | 9:28 AM | By

D.C. Growth to Continue in 2012?

Last year was sort of monumental for D.C., which led states in population growth for the first time in more than 70 years. The Atlantic senior editor Megan McArdle discusses what could happen to D.C.’s housing prices — which rose in 2011 — and population size if the federal government shrinks.


In the next few years, it’s reasonable to expect that the ten year boom in government expansion will come to an end. Does that mean that the DC housing-and-retail boom ends with it? Will population stall?

One school of thought holds that it has to; when the government stops expanding, so will all the ancillary jobs–not just the services to people living and working in the district, but everything from think tanks to lobbyists to journalists covering all this added activity.

I’m inclined to think, however, that this is not quite right. I don’t know whether house prices will stay high–they increased at quite a clip over the last ten years, and they’ve barely fallen. Ultimately house prices can’t keep growing faster than area median income, so without New York’s absurd finance incomes, eventually they should stabilize or even pull back.

Read more at: www.theatlantic.com

  • Anonymous

    Of course everything will drop if the governement contracts, there will be less people paying for those services and buying those products. It’s what happened to lower Manhattan when finance firms moved or shut down, the retail goes too. Most people who live outside of DC don’t travel into DC to do shopping or eat out.