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

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District of Columbia Industrial Areas Study DC Office of Planning Prepared by Phillips Preiss Shapiro Associates, Inc. and the average sales occupation is just a little above. The spread in wages in sales occupations is further broader than most other occupations, as this category encompasses sales managers as well as clerks and cashiers. As shown by the 10 th percentile wage, entrylevel sales positions can pay less than $16,000 a year. The 10 th percentile wage for construction and installation, maintenance and repair occupations is significantly higher. Thus, leaving aside the important fact that PDR jobs are also generally associated with good benefits and union representation (something often lacking in sales and service jobs), PDR jobs provide a level of compensation that the District should make every effort to retain and expand for its working families. Table 2.10: Employment Growth by Education and Training Category Education & Training Category 2002 2012 Growth - 37 - Percent of New Jobs Cumulative Percentage 1 First professional degree 52,734 54,800 2,066 3.06% 3.06% 2 Doctoral degree 6,646 8,057 1,411 2.09% 5.14% 3 Master’s degree 32,016 35,220 3,204 4.74% 9.88% 4 BA degree, plus work experience 88,015 99,967 11,952 17.68% 27.56% 5 Bachelor’s degree 136,631 154,930 18,299 27.07% 54.63% 6 Associate degree 29,481 33,471 3,990 5.90% 60.54% 7 Postsecondary vocational training 25,698 28,282 2,584 3.82% 64.36% 8 Work experience in a related occupation 51,487 54,575 3,088 4.57% 68.93% 9 Long-term on-the-job training 30,543 32,975 2,432 3.60% 72.52% 10 Moderate-term on-the-job training 81,494 85,137 3,643 5.39% 77.91% 11 Short-term on-the-job training 189,321 204,252 14,931 22.09% 100.00% Total 724,066 791,666 67,600 100.00% Source: District of Columbia Department of Employment Services (2005): District of Columbia Employment Projections by Industry and Occupation, 2002 – 2012. Finally, Table 2.10 shows projected employment growth by the necessary level of education and training necessary for the position. At the lowest end of the entry-level job spectrum are those positions, such as cashiers, that call for only short on-the-job training. Such occupations are expected to make up over a fifth of all new jobs between 2002 and 2012. At the other end of the spectrum are jobs requiring a bachelor’s degree or better—these make up over half of new jobs. PDR jobs such as construction, maintenance and repair typically require technical skills acquired either through vocational training or medium and long-term on-the-job training. Collectively, these mid-range occupations in the skills spectrum are projected to account for about 17 percent of new jobs, or 11,700 jobs in total. This is fewer than half of the jobs needed
District of Columbia Industrial Areas Study DC Office of Planning Prepared by Phillips Preiss Shapiro Associates, Inc. to move the District’s 24,000 unemployed residents into productive employment, even if 100 percent of these jobs were to be filled by DC residents, not to mention providing opportunities to underemployed residents. In fact, according to the Industrial Users Survey undertaken for this report, about 40 percent of PDR jobs are held by DC residents. Under the best of circumstances, PDR industries will only account for a fraction of DC’s future job growth. Yet, increasing that fraction could have a significant impact on the range and type of job opportunities available to DC residents, particularly jobs which offer career ladders and living wages. “Growing and Inclusive City” is the organizing theme of the District’s new Comprehensive Plan. Economic inclusiveness requires access to meaningful job opportunities for all of DC’s residents, even those without advanced education. PDR jobs can provide these types of opportunities. A strong base of PDR employment should be an important part of an array of strategies addressing chronic unemployment in the District. 2.3 DEVELOPMENT PRESSURES 2.3.1 DISCUSSION OF DEVELOPMENT PRESSURES Developable land of any type is scarce in Washington, DC, and industrial land even more so. As the District’s inventory of favorably located development sites is exhausted, the development community will inevitably hunt for opportunities in areas heretofore considered unsuitable for residential, commercial, or mixed-use development. Such forces are already at work in DC, as development pressures are increasingly manifest in formerly bypassed neighborhoods and other less than prime locations, including the areas zoned for industrial (PDR) use. In general, real estate pressures in the District are extremely high—supply is very limited and demand has never been greater. In the resultant high-stakes bidding contest, those willing to pay the most win the land. PDR businesses are at a great competitive disadvantage in a superheated market because they have limited ability to afford ever-increasing rents. Moreover, PDR users are unable to compete head-on with traditional “high value” uses such as office, retail, and residential, thus putting them at the end of the pecking order in the competition for scarce land. Typical industrial rents in the District’s industrial areas, at $5 to $15 per square foot, compare unfavorably with residential rents of $25 to $30, retail rents of $25 to $30, and office rents of $30 to $40 per square foot. In addition, given escalating land prices, typical PDR businesses cannot compete at all when land is developed for for-sale products such as condominiums, which often sell for $550 per square foot compared to an average industrial sales price rate of $100 per square foot. 5 Moreover, most PDR users prefer one or two story buildings, while office and residential buildings can be developed in a multistory format, increasing returns (hence land values) even further. To make planning more difficult, the typical 5 The CoStar Industrial Report, Third Quarter 2005, Washington, DC Industrial Market. The CoStar Group, 2005. - 38 -
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