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Pandemic A Blow To D.C. Small Businesses, Data Show

MICHEL MARTIN, HOST:

There isn't a single business or shop out there big or small that hasn't been affected by the pandemic in some way. All have had to adapt in some way to keep employees and customers safe. A few have even seen business boom or at least hold steady. But many, especially small retail businesses, have struggled to make it through a year of lockdowns and restrictions. And for many, that's meant having a close up shop, either temporarily or for good.

So we're going to spend the next few minutes talking about what that means for workers, for small-business owners and for the communities they serve. And we're going to begin with a focus on Washington, D.C., the nation's capital. But it's also a city, like many others, with a local economy that's been deeply affected by the pandemic. And for that, we called Ally Schweitzer of member station WAMU here in Washington. She's been reporting on the impact of the coronavirus pandemic on local businesses. And she has some information to share with us from that reporting. Ally, welcome. Thanks so much for joining us.

ALLY SCHWEITZER, BYLINE: Oh, thank you for having me.

MARTIN: So in your reporting, you created a map of the businesses that have closed across the city of Washington, D.C. So how many D.C. businesses have shut down in the past year?

SCHWEITZER: Well, so it's at least 235 permanent brick-and-mortar business closures in D.C., but that's not counting businesses that temporarily closed. So we're expecting a lot of businesses to reopen. But in terms of permanent, it was in the neighborhood of at least 235 that we were able to count.

MARTIN: Do you have a sense - like, what does that mean? Like, what does that number mean in a place like the District of Columbia, which has - what? - a little more than half a million, like, about 600,000 residents?

SCHWEITZER: It's not a big city, but it's a place where the growth trajectory for the last 20 years has been explosive, you know? I think folks who live outside of the District of Columbia - their knowledge might need a little bit of an update when it comes to what the city really looks like. I think people tend to think of D.C. as it was maybe in the '90s, you know, when there were just a lot of issues with the economy. The city was shrinking. People were leaving. That has not been the story of Washington, D.C., for the last 20 years. It's really been the opposite of that. And a lot of the new growth - economic growth in the city has been from small businesses. It's been hospitality businesses, a lot of restaurants, a lot of bars. So the pandemic - when it hit, it was an immediate overnight reversal of a lot of that growth. And it was shocking and abrupt and very detrimental to a lot of small-business owners.

MARTIN: So as I understand it, as of December, more than 36,000 residents were unemployed, which is an increase of - what? - 77% over the previous year?

SCHWEITZER: That's right, 77%. And this is an area that people tend to think of as being, you know, recession-proof. It turns out it's not pandemic-proof.

MARTIN: So let's talk about - like, there's kind of a good news-bad news story here. You already started telling - taking us the bad news, so why don't we just stick with that? What are some of the kinds of businesses that just were not able to make it through the pandemic?

SCHWEITZER: It's really interesting to see how this played out because in a lot of ways, it's not surprising, some of the trends that we were able to find in this data. For example, like I said, hotels, restaurants, you know, little coffee shops, you know, that are really dependent on office workers, for example, in downtown D.C. - those are the places that were hit the hardest. Those are also the places that tend to be really prosperous.

And what we saw looking at revenue trends - and a lot of this data is available from Harvard University, their Opportunity Insights Project. Revenue at small businesses early on in the pandemic absolutely tanked in the District's wealthiest communities. But what we did not see - and this surprised me, initially, but it really makes sense - is a lot of business closures in areas that were already struggling and where residents were hit especially hard in terms of health and economic impacts by the pandemic. So I'm talking about - communities that are located east of the Anacostia River and the District of Columbia are among the lowest-income in the entire region.

Businesses in these communities were not affected the same way that they were in places like downtown and in some of the really high-income and very gentrified communities in the District. And a lot of that has to do with the resilience or rather the - I would say the businesses that are accustomed to dealing with difficult economic circumstances were better prepared for the pandemic. So we didn't see as many closures.

MARTIN: And before we let you go, do you have a sense of what the impact of this is going to be going forward? I mean, it does seem that - I don't know. Some of these businesses don't seem like they're coming back, some very loved businesses. I mean, I'm - you know, we're seeing, you know, stories in the local media about, you know, restaurants and bars that had been going for decades that - people just said, I just can't keep doing it anymore. Do you have a sense of what happens after this?

SCHWEITZER: That's a really interesting question because I think, yeah, there's going to be a lot of businesses that simply never come back. And their owners don't know what they're going to do next. On the other hand, what we've started to see at least in D.C. is that new businesses are taking the place of businesses that closed. Some people actually do seem to view this pandemic as an opportunity to shape a new business model for their existing businesses. But I also think a really big question is going to be what happens with all of this commercial real estate that might have lost value because of the pandemic.

This is a really big question in cities that really depend on property taxes from these massive commercial developments. And that's certainly the case in the District, and I'm sure it is in many other cities across the country. And so it's going to be really on these big commercial land owners to figure out how to bring value back to their property. That's a really big question that I think we're going to be watching unfold in the coming years.

MARTIN: That was Ally Schweitzer of member station WAMU talking to us about her reporting on the pandemic's impact on local businesses in Washington, D.C. Ally Schweitzer, thanks so much for sharing that reporting with us.

SCHWEITZER: Thank you for having me. Transcript provided by NPR, Copyright NPR.