DC restaurants shutting down at record rates, new report shows
A new report says hundreds of jobs are being lost as restaurants shut down at record levels in D.C.
Many restaurant owners blame the controversial Initiative 82 policy.
The law is meant to phase out the "tip wage" system, where workers earn a lower than the base minimum wage.
WASHINGTON - A new report says 900 jobs are being lost as D.C. restaurants shut down at record rates.
At this time, may D.C. restaurants are pointing the finger at a controversial measure concerning tipped workers.
By the numbers
Across the District, two restaurants per week are reportedly closing down for good.
This comes as the D.C. council prepares to take up the controversial Initiative 82.
The Restaurant Association of Metropolitan Washington says the latest data shows new restaurant openings are down 17% compared to this time last year.
The troubling trends come as a jobs report reveals a reported net industry loss.
Dig deeper
FOX 5 has learned the new mid-year data from the Restaurant Association of Metropolitan Washington indicates that D.C. is losing restaurants at an historic rate, reportedly averaging two closures per week so far this year.
More than 50 restaurants have apparently closed in the first half of this year. That's reportedly nearly double compared to the same timeframe last year.
The Restaurant Association of Metropolitan Washington believes the rapid and record-breaking restaurant closures are due to increased operating costs and the minimum tipped wage increase with the phased implementation of Initiative 82.
What they're saying
Patrons we spoke with described the situation as saddening and pointed out that the District is an area that thrives on the food and hospitality industries.
The Restaurant Association of Metropolitan Washington says it's watching closely as the DC Council prepares to take up Initiative 82 on Monday.
The District is apparently on pace to exceed 100 closures by the end of the year, surpassing the 2024 record of 73.
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If I-82 went on as planned, the tipped minimum wage would have gone up from $10 to $12 on July 1. The D.C. Council paused that increase during an emergency vote in early June. Under the newly passed amendment co-sponsored by councilmembers Christina Henderson and Charles Allen, the current base wage for tipped workers will stay put at $10 until July 2026. After that, it will slowly tick up every two years as a percentage of the regular minimum wage until it reaches 75 percent of the full minimum wage by 2034. There were a number of last-minute amendments on the overall 2026 budget bill, but the partial repeal of pay equity for restaurant workers sparked a chaotic uproar inside the Wilson Building. Those in support of keeping I-82 in its original form swiftly disrupted proceedings with a shouting match, causing Council chair Phil Mendelson to call upon D.C. Protective Services police force to clear protestors from the building and lock down the chambers. Smaller restaurants did not embrace 1-82, and owners came out of the woodwork in full force for a marathon testimony hearing in June that lasted well over eight hours. Eric Heidenberger, whose hospitality group runs of Shaw's Tavern, 801, Prost DC, Madhatter, the Bottom Line, and Vagabond, says I-82 has 'made it near impossible for a small, independent operator to make ends meet,' noting a few of his locations have experienced a 30-percent decline in customer foot traffic since I-82's implementation. American standby Brookland's Finest closed after a decade this spring, in part, due to payroll challenges Initiative 82 presents. Brookland's Finest 'The decline in sales, coupled with a doubled increase in labor costs, has put a significant strain on the viability of our D.C. operations,' he says. If I-82 stayed as is, he anticipated having to close half of his D.C. portfolio. 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Ward 4 Councilmember Janeese Lewis George agrees that overturning the will of the voters was not the way to go and says not all restaurant failures can be fully attributed to I-82. 'It is not our job to remove all risk from the restaurant industry,' she says. Other U.S. cities like Chicago are also dealing with impacts of the hotly debated ordinance, and Massachusetts voters recently rejected a tip credit elimination and minimum wage hike law. Jonathan Nelms, owner of Georgian restaurant Supra and longtime D.C. resident, spoke out at the June hearing about the motives behind enforcing I-82. 'Why did the government feel the need to get involved in private enterprise? I don't think you did. I think an out-of-state organization came in and ran these campaigns for deceiving initiatives that have fooled D.C. voters twice,' he says. 'They all failed to understand that we as restaurant owners have to pay the difference, the tip makeup.' 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