As 2024 opens, Washington seems set to continue hemorrhaging small businesses as its government fails to control the city’s skyrocketing crime rate.
In the D.C. metropolitan area, the closure of restaurants and bars has gained a high profile and perhaps become an unconscious symbol of a wider crisis that has seen thousands of businesses close or leave the city over the past four years.
The city has witnessed the destruction of such heritage establishments as the Hotel Harrington—founded in 1914 and until November of 2023 was not only the city’s oldest continually operating hotel but still a family business owned by fifth-generation descendants of its founder.
Even if the total number of closed restaurants and bars seems a small fraction of the total—52 (or one per week) in 2023, 48 in 2022, and 40 in 2021—the details are demonstrative of the wider crisis.
For example, the same years saw not only increases in restaurant closures but decreases in new openings—from 78 to 74 to 72. The continuation of this trend will result in Washington suffering an annual net loss of restaurants and bars by 2030.
Numerous factors contribute to the problem.
The restaurant business is notoriously difficult to succeed in. Patronage has been lost as increasing numbers of people begin to habitually work from home, even if only a day or two each week.
Costs of doing business have increased—including for rent and purchasing necessary products.
Faced with existing decline, changes to city labor law exacerbated the problem.
Throughout most of the country, business owners are required to pay a lower minimum wage to workers who habitually receive tips for their services than to those who do not—at least if the amount made in tips can cover the difference.
Initiative 82, passed by Washington voters in a referendum on Election Day in 2022, established a scale of annual increases to the minimum wage for tipped workers so that it will equal that of non-tipped workers by 2027 regardless of how much workers additionally make in tips.
To offset the change, nearly 300 small businesses polled by the Restaurant Association of Metropolitan Washington reported that they increased prices but could not cover increased costs while sales declined.
But the single most significant factor impacting closures—perhaps more significant than all others combined—is a spike in crime.
The homicide rate in the national capital increased by 35 percent in 2023 (from 201 to 274) to reach the highest level in more than two decades and the equivalent of approximately three homicides every four days.
And that is just the tip of the iceberg.
Overall crime increased by 26 percent (27,305 to 34,414), violent crime by 39 percent (3,850 to 5,336), and robbery by 67 percent (2,076 to 3,470), while motor vehicle theft almost doubled with an increase of 82 percent (3,756 to 6,829).
Victims of carjackings have included a member of Congress—Henry Cuellar—who was robbed of his vehicle in October 2023, a foreign diplomat, and an FBI agent.
Arson combined the largest increase in percentage (175 percent) with the smallest in absolute numbers (from 4 to 11).
Of the cities studied by Forbes Advisor, Washington had the second-highest retail theft index.
The rate at which crimes have been solved has plummeted, serving only to embolden criminals further.
As of November 13, 2023, just 75 of the year’s then 244 homicides had been solved—the lowest rate since 2008—while the city Department of Forensic Science has been without accreditation since 2021 and the police department lost almost 15 percent of its strength (declining from 3,800 to 3,300 officers) in the three years since 2020 and became the smallest it has been in 50 years.
Of those arrested for any crime in 2023, only 56 percent were prosecuted.
Small businesses have been hit in a multiplicity of ways.
On Jan. 25, 2023, Adams Morgan Bakery was robbed a year after being damaged by arson.
City Winery, a small chain with 13 stores nationwide, closed its Washington location due to the frequency of gunfire in the vicinity and of staff and customers being assaulted and robbed and having their cars broken into.
The Pursuit Wine Bar lost $15,000 after being broken into three times in April-May of 2023, announcing its closure in December as difficulties continued.
Private efforts have been made to increase security but with mixed success.
Businesses located near the Washington Navy Yard joined with each other and the Capitol Riverfront Business Improvement District to hire off-duty police officers as security guards and to increase lighting and the number of security cameras—with the result that crime on a single block remained significantly lower than the remainder of its neighborhood.
Such initiatives are also of questionable long-term financial viability.
Bo Blair, owner of a dozen local businesses, spent $450,000 on security—including a soon-to-be prohibitive $4,000 a week on guards for Surfside Taco stand.
Greg Casten, another local restaurant owner, had to spend $200,000 on security in 2023.
Attempts by some city officials to establish policies to combat the crime wave have met with limited success, and sometimes with considerable opposition.
In May, the city council passed an emergency bill that increased penalties for several crimes and made it easier both for judges to impose pretrial confinement and to deny petitions for reduced sentences.
But just two months earlier—unanimously overriding a veto by D.C. Mayor Muriel Bowser—it had passed a major revision to the city criminal code that lowered maximum sentences for various violent crimes and eliminated minimum sentences for all crimes other than first-degree murder.
Within weeks a bill overturning the criminal code passed both chambers of Congress and was signed into law by President Joe Biden, using the authority of the federal government over the national capital.
Soon after that, President Biden vetoed a bill to overturn the “Comprehensive Policing and Justice Reform Amendment Act” passed by the city council in December of 2022.
The act has been unpopular with members of the police department and was criticized as soft on crime and anti-police by Members of the House Oversight Committee.
In October 2023, Democrat Mayor Bowser introduced her “Addressing Crime Trends Now” bill, insisting that the law of the previous December was an overreaction to the death of George Floyd and other events of 2020.
Provisions of the new bill include distinguishing between incidental and serious use of force by police officers and allowing officers to review bodycam videos when writing reports.
As of today, the bill has received considerable opposition.
