The strength of the real estate market in Fairfax County is exemplified by the fact that 61 percent of the county's proposed $3 billion budget is tied to real estate. Add personal property to the real estate, and that rises to 80 percent.
The main driving force behind the strong market is job growth. People come to our area, said Supervisor Catherine Hudgins (D-Hunter Mill), because of the increasing number of jobs available in a community with a good quality of life. Fairfax County Public Schools, she added, are still considered some of the best in the country. However, Hudgins warned, housing prices are outpacing incomes, and therefore decreasing the ability of local residents, especially those in a lower-wage sector, to purchase homes. Teachers and firefighters, among others, are being forced to live outside the county. "If people live outside of where they work," she said, "then we have more transportation problems." Hudgins addressed an audience at a breakfast hosted by the Greater Reston Chamber of Commerce, Wednesday, March 16. She said the lack of affordable housing in Fairfax County has to be addressed, and that the Board of Supervisors has made progress on the issue. The progress translates to $17.9 million set aside in the proposed budget to the Housing Trust Fund, set up to preserve and create affordable units in the county.
ANOTHER PROBLEM, ADDING to the lack of affordable units, is the demand for the market rate units in the area exceeding the supply. "The constrained supply makes creating affordable housing that much more of a problem," said Tom Williamson of Comstock Homes. Condo conversion, he added, is not going to end soon, because the demand is high. Christine Todd, CEO of the Northern Virginia Association of Realtors, agreed the demand exceeded the supply in the 10 years between 1993 and 2003. She said the same will happen in the next 10 years. The reason for such a high demand, she said, is not just low mortgage rates, but also a number of creative ways to finance the mortgages that have become available.
The demand for housing is at a cost to affordable housing, Todd said. The "baby-boom" generation is in their best money-making years, and the high number of people who are a part of the generation contribute to the high demand, and therefore the loss of affordable housing. The money-making baby boomers are willing to purchase housing at a market rate.
"The affordable housing problem is rapidly getting worse," said Lee Rau, the commissioner of Hunter Mill District for the Fairfax County Redevelopment and Housing Authority. The county, he added, has 0.08 affordable units per person. Montgomery County, Md., has five times the number of affordable units Fairfax County does, said Rau. He cited Stephen Fuller, a professor at George Mason University, who said the next issue to hit the area will be a shortage of labor force. Rau said the extension of Metrorail to Dulles is an opportunity for the county to create a significant number of affordable units. If the county allows high-density, mixed-use zoning along the rail, and near the proposed stations, rail and affordable housing could be supported by new developments. The county could also extend its Affordable Dwelling Units (ADU) Ordinance to include high-rise buildings. Currently, under the ordinance, developers have to build in a certain number of affordable units into developments, but the ordinance does not apply to buildings higher than four floors, or to those with elevators in them.
A PERSONAL SPIN on the affordable housing issues was offered by Leslie Channel from Reston Hospital Center (RHC). She said the challenges affecting the employees at RHC include the high cost of living, diverse housing needs and lack of affordable housing among others. The high cost of living in the area affects the hospital's ability to recruit qualified candidates from other parts of the country to work for RHC.
"It is getting more difficult to recruit outside the area," said Channel, "due to the 'sticker shock.'" Recently the hospital attempted to recruit a director for one of its departments from Alabama, but the salary offered could not match the cost of living. The individual has four children, and a wife who stays at home to take care of the children, and the family is therefore a single-income one. A house of the size needed for the family, along with other living expenses, in this area turned out to be too expensive for the salary offered and the hospital lost a qualified candidate for an important position.
The other side of the issue is that the decreasing number of affordable housing units in the area are forcing lower-income employees to move to areas farther away from the hospital. Certain employees, she added, who are on call have 30 minutes to respond to a situation in which they are needed, but may be forced to live farther out than that.
The real estate market will continue to be strong, said Todd, partly because people think it is safer to keep their money in real estate, rather than the stock market. "My house made more money last year than I did," said Todd. She said the Reston market is especially strong, with a 24.31 percent increase in an average home assessment last year, jumping from $291,567 in 2004 to $362,440 in 2005.
Williamson agreed the market would continue to be strong because of the area's job growth, high median household income, diverse employment base and consistent population growth. The expansion of Dulles Airport is a testament to the projected continued growth of the area, added Williamson.