As DC weathers a federal takeover, its economy braces for unclear impact

DC summers have a lot to offer, like a restaurant week celebrating the local dining scene, air-conditioned museums full of art and artifacts and outdoor movies in local parks.

As residents take in the last moments of summer, they are also running into members of the National Guard, FBI and DHS roaming the streets. 

Even though homicides in the district dropped 32% last year, the Trump administration’s federal takeover is continuing into its third week, with crime being the justification for the president invoking section 740 of the Home Rule Act for the first time in history. Local leaders are working to boost the city’s charm through social media posts and directly contacting visitors in an effort to sustain the local economy. 

In 2024, crime in DC was at a 30-year low, noted Elliott Ferguson, the president and CEO of the city’s main tourism organization, Destination DC. 

“You’ll see that all the things associated with painting a nefarious picture of Washington are inaccurate,” Ferguson told Technical.ly. “Our goal is to make sure we give a true sense of what the city has to offer.”

Part of that effort is a series of video “love letters” to DC, highlighting different parts of the district. The organization created a video of its own, but Destination DC has also been working with content creators to spread the message, Ferguson said. 

As Trump threatens similar actions in other cities, there’s bound to be a “chilling effect” in DC, per Michael Negron, a senior fellow at the Center for American Progress. Different people will react differently to a visibly larger police presence and act accordingly when moving outside their homes, he explained. 

“You’re going to have people who are reassured by the presence,” Negron said, “and you’re going to have people who are chilled by the presence.”

In a statement, DC’s Chamber of Commerce noted a “secure environment” is necessary for businesses to thrive but this takeover and increased law enforcement is “creating uneasiness.”

“For many, a larger armed presence without deep knowledge of DC laws or community dynamics has the potential to cause heightened anxiety and deter everyday activity,” it read. “This is a growing concern for our businesses who rely on residents to operate.”

This takeover is set to last for 30 days, unless the Senate and House enact into law a joint resolution to extend it. There is already legislation to prolong the control for as long as six months. 

Restaurant dining slipped, then spiked 

When the takeover was first announced on Aug. 11, people dining at restaurants in DC declined sharply. On Aug. 13, there was a 31% drop compared to the same day in 2024. 

But on Aug. 18, the first day of the much-anticipated Restaurant Week offering prix fixe meals at restaurants around the region, dining increased 30% compared to the same time last year.  

Negron said business owners will be bracing for possibly less foot traffic. Plus, given how many immigrants work in hospitality and food, relevant entrepreneurs and managers will have to anticipate employees not feeling safe coming to work. 

According to a data brief by the National Restaurant Association, 22% of restaurant and food service employees were born outside of the US. Moreover, out of the 8.3 million undocumented immigrants working in the US, 1 million work in restaurants. DC police can also now notify federal immigration authorities of people who are not in custody (like during traffic stops). 

Since the administration started increasing law enforcement presence on Aug. 7, it has bragged that law enforcement made more than 1,000 arrests  — including 300 of immigrants without “legal immigration status,” as reported by CNN. This inevitably makes people nervous to walk around the city, and those trying to get to work.

“In addition to less customers, you can’t rely on your same staff turning up,” Negron said. 

Lack of clarity will affect business owners, consumers 

Tourism is a major part of DC’s economy. In 2024, Destination DC reported there was $11.4 billion in visitor spending and $2.3 billion in tax revenue due to tourism. 

It’s too early to tell how this is impacting tourism, Destination DC’s Ferguson said. He and his team are waiting on hotel data, and he hasn’t anecdotally seen a “mass exodus” of events or big conferences in DC. 

“If there were mass cancellations, those general managers would have been calling me,” he said. “I would have known about it by now.”

Ferguson and his team have been reaching out to major event organizers to communicate that DC is still a “destination.” He’s also relying on grassroots testimony on social media, like the love letters people have been posting.  

Negron brought up that the summer tourism season is coming to a close, and these moves by the administration may have had more severe effects in May or earlier in the summer.  

There is no definitive answer as to how long this takeover will last, which then affects businesses. This action is also unprecedented, he said — a detail that bears its own unknown consequences. 

“It’s tough to fully bake out what we think is going to happen,” Negron said. “But that’s just the environment we’re in with this administration. There’s a lot of testing the limits. They’re governing by emergency decree, and it’s hard to predict what happens, and that has its own impact on people.”