Mix of uses in DC’s downtown. Image from Office of Planning.

The area around Gallery Place and Metro Center was once nearly empty at night, full of surface parking and run-down buildings, and quite

seemingly dangerous, at least to visitors or suburbanites. Today, it’s lively and extremely successful. Economic conditions played a big part, but DC’s planners also helped by creating incentives for residential, retail, arts and historic preservation in DC’s old downtown, from Pennsylvania Avenue to the Mount Vernon Triangle, Thomas Circle to Judiciary Square.

DC created the DD in 1991 to shape the revitalization of DC’s downtown. The office center of gravity had moved to K Street and the Golden Triangle, but as that area filled up, developers began looking back at DC’s historic downtown. Planners wanted to avoid reproducing the Golden Triangle’s monoculture of law firm offices, low level of ground floor retail, inactive sidewalks, numerous garage entrances and repetition of boring boxes. What to do?

The 1981 “A Living Downtown” plan recommended retail on F, G, and 7th Streets; hotels around the Convention Center, Thomas Circle and “Downtown East” near Union Station; residential development in the Penn Quarter and Mount Vernon Square, and offices around Franklin Square and Judiciary Square. In 1991, DC implemented zoning rules requiring residential units and arts or retail in various areas throughout downtown. The zoning also required transparent glass over a majority of the ground floors on certain streets, with entrances no more than 40-50 feet apart and no garage entrances.

To create an incentive for desired development, the DD created a Transfer of Development Rights (TDR) program. Any residential, arts and retail, or historic preservation exceeding the requirements generated TDR “credits” that developers could sell to projects in various “receiving zones,” including parts of downtown, NoMa, the western half of the Golden Triangle, the Southwest Federal Center, and what’s now the Capitol Riverfront (ballpark) area. Buying those credits would allow new buildings in those areas to reach the maximum allowable heights, creating an economic incentive for more housing, arts, retail and historic preservation downtown.

Developers could also swap residential and office between buildings through covenants, called Combined Lot Developments (CLD). In this way, one building could serve entirely office uses if another building met the residential requirement for both buildings put together.

The DD was a great success. Counting buildings currently under development, there will be 12,580 residential units, especially in the Penn Quarter and Mount Vernon Triangle, exceeding the goal of 12,410. Museums and theaters comprise 1,218,000 square feet downtown, concentrated around Gallery Place, beating the goal of 900,000. There are 1,600,000 square feet of retail plus another 400,000 in the pipeline. That falls short of the DD’s initial 5,600,000 goal, but planners now believe that goal was probably unreasonable. And many historic buildings remain downtown.

The TDR system generated most of the its residential credits between 2004 and 2008. Before that, except for one big block of residential development, most of the credits were for historic preservation. At first, the cost of TDRs was around $30, but during the housing boom it dropped to the $10 range. The DD also generated few retail and arts credits, all in a small number of blocks. Since there was already a retail and arts requirement, developers didn’t want to build even more of either, except during certain new, large projects.

Image from DC Office of Planning. The pink line represents the TDR price, while the bars represent TDRs generated. Blue is residential.

Without the residential requirements and incentives, however, other areas such as NoMa haven’t developed the same mix of residential, arts, and retail uses as downtown. With limited supply and high demand for office space in DC, we need some incentives to keep parts of central Washington from becoming completely overtaken by offices, leading to dead zones at night and severely limiting retail opportunities. This is already a huge problem in Judiciary Square and along Massachusetts Avenue.

To encourage residential development in these areas as well, the Office of Planning suggests replacing the TDR and CLD program with a new unified system of Housing Credits. If a developer builds more housing than the zoning requires in any part of DC’s high density core, which includes the Golden Triangle, NoMa, Southwest Federal Center, Capitol Riverfront, the Mount Vernon Triangle, and Buzzard Point, they will earn credits. And in zones where existing zoning allows a developer to get more height from TDRs and CLDs, they can also buy the new HCs.

The proposal would also keep the retail requirements in the existing downtown zoning. DC’s Retail Action Strategy has also recommended adding similar requirements on certain additional streets such as K Street and Connecticut Avenue. Ground floor design standards, such as entrance spacing and transparency, would apply to all buildings across the downtown core areas. The Downtown zoning working group didn’t discuss those retail standards in detail, but the Commercial Areas group did. Next, we’ll look at some of the possibilities that group has discussed.

David Alpert created Greater Greater Washington in 2008 and was its executive director until 2020. He formerly worked in tech and has lived in the Boston, San Francisco Bay, and New York metro areas in addition to Washington, DC. He lives with his wife and two children in Dupont Circle.