With an unexpected windfall socked away for the city, D.C. Mayor Vincent Gray promised Feb. 5 to create affordable housing, rebuild the city’s public schools and foster economic development in what he called a “prosperity dividend” in his state of the city address.

He unveiled plans to reform the regulatory and contracting systems while investing $100 million in affordable housing and pledged to focus on creating a city built around more than just the federal government.

“Make no mistake: My administration is working with the fierce urgency of now to make sure the District’s economy continues to grow, diversify, and reach new heights — no matter what happens with sequestration and the federal budget,” he said in a 6,000-word state of the city address.

With the city’s rainy day fund fattened to $1.5 billion on the heels of consecutive budget surpluses and with the population increased by newcomers, he characterized the city’s as being on the threshold of a “prosperity dividend” that, he said, “I intend to invest in some strategic initiatives that advance important goals for the District.”

His pledge to create 10,000 new units of housing for senior citizens, government workers and the moderate income city resident drew a standing ovation from the crowd inside the Sixth & I Historic Synagogue near Mount Vernon Square and Chinatown.

He also said he would push for pay raises for D.C. employees, who have endured pay freezes, furloughs and hiring barriers for several years.

And, he said, he is zeroing in on ways to broaden the city’s employment base beyond working for the federal or local government.

“Let there be no doubt: looming federal budget cuts – whether caused by sequestration or not – will hurt regional public-sector employment, and it underscores the district’s need to continue aggressively diversifying our economy,” he said. “In response, my administration has been working hard to lay the groundwork to create new jobs in the district that are not dependent on the federal government or federal contracting.”

Noting that the District of Columbia is emerging years of fiscal crises as a “big league” city, he pointed out that the unemployment rate has fallen from more than 11 percent in 2011 to less than nine percent today. Now, he said, the goal is to “to grow and diversify our economy, to educate and prepare our residents for the district’s emerging new economy, and to improve the quality of life for all of our residents.”