INDUSTRIAL LAND IN A POST-INDUSTRIAL CITY District of ...

District of Columbia Industrial Areas Study DC Office of Planning
Prepared by Phillips Preiss Shapiro Associates, Inc.
confirms that while the large users may dominate land use, most PDR businesses in the district are of
modest size. Their businesses appear stable but many are not partaking of the local economic boom.
They either have no expansion plans, or only modest additional space needs. They lack the dynamism
that characterizes the District’s rapidly expanding office sector, for example.
A primary purpose of the survey was to assess the importance of a DC location for the businesses
occupying the District’s industrial zones. Future land use policy might seek to preserve the zones, or,
through rezonings, facilitate the loss of industrial land. If PDR businesses can easily relocate outside of
the district and continue to serve their customers, then (1) their displacement is less of a cause for
concern, and (2) efforts to keep them in the district would have to go beyond maintaining existing
zoning protections. If, on the other hand, these businesses truly need to be in the district, then their
displacement is a more serious matter.
The survey findings indicate, perhaps unsurprisingly, that a majority of the respondents do derive extra
value from being in the District. Proximity to their customers is the primary benefit, and is apparently
sufficient to outweigh identified detriments including taxes, high land costs, and insufficient space with
few or no expansion options. These findings suggest that for a significant share of existing tenants, a
move will only be contemplated when their existing situation becomes untenable.
Even still, for every DC tenant that does most of their business within the District, there are others who
serve a more regional clientele. These businesses may be the first to leave if better opportunities are
available elsewhere. Inertia is a powerful force behind many business decisions. It cannot be
discounted that many businesses may not be planning to move simply because it is easier not to.
In sum, the survey backs up some initial hypotheses informing this study, namely that regional
congestion provides value to location closer to the end users of goods and services provided. Further
research, particularly into the industrial property market, will hopefully shed additional light on how this
value translates into lease rates and land costs, and the extent to which it influences the demand for
industrially-zoned land and buildings in the District.
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