From talking to the founders of some of the biggest local startups, most seem to prefer recruiting in the DC region though it remains a challenge to find the right people. I've heard from a few people that hires in DC are much more "loyal" than they are in the valley and there is much less turnover.

One of the main advantages DC has is there is a huge supply of engineers and developers working for major defense and government contractors just waiting to be poached by a hot new startup.