Chamber Event Speaker Says F.C. May Be Exception
According to News-Press sources, residential real estate prices have gone up 9 percent in the City of Falls Church just since January, and 50 homes have already sold in the City since then, with another 20 in the process of selling. This compares to 80 homes which sold all of last year here.
This stunning news came forth at Tuesday’s monthly luncheon of the Falls Church Chamber of Commerce, where Dr. Keith Waters of the George Mason University Center for Regional Analysis spoke about what he called “an existential crisis” facing the region now, even though he acknowledged that the City of Falls Church is “crushing it” in terms of economic development right now.
But the biggest issue facing the region, which Falls Church may not be able to avoid eventually, is the fact that the kinds of jobs that attract and retain a skilled workforce of professionals, centered on federal government jobs, may be leaving.
In the past, even during the Great Recession of 2008 and during the Great Covid-19 Pandemic of 2020-22, the jobs and workforce lost in the region were on the lower end of the economic spectrum, less skilled and lower paying. But now, the job losses in this region since the pandemic have been of a higher skilled and better educated sort as the federal government’s job growth is happening outside this region.
As a result, he noted, the D.C. region’s economy, having always been highly sensitive to federal policy changes, is now stalled. He added that an administration change in November “will make a big difference,” and it will not be good.
While earnings have been flat throughout the region, costs have gone up four percent, mostly due to housing costs, he said.
The most important way local jurisdictions can buck this trend, he said, is to relax zoning laws enough that will allow for the construction of sufficient new housing of all types.
At Monday’s meeting of the Falls Church City Council, discussion of zoning changes to permit more Auxiliary Dwelling Units (ADUs) was held in what was considered a kickoff for more than a year before any actual votes to make such housing lawful will be taken.
The extensive discussions and delays that accompanied Arlington County’s zoning changes to permit some multiple dwelling units in areas previously limited to single family homes, and Falls Church’s similar delays in making changes to its Transitional Zones regulations are cited as cases in point of the delays that are preventing sufficient housing from getting built in the region. The existing home sales are down four percent, with the radical exception of Falls Church on this score mitigating that, but for how long, he suggested, is not clear.
Dr. Waters pointed to other regions of the country that are building their housing stock faster, areas such as parts of Texas, Arizona and California, for example, where jobs and the skilled professional workforce that are filling them are beginning to migrate.
Even though the national economy is advancing, there are still five million fewer jobs than before the pandemic, he noted, and the bulk of them are in the areas of leisure and hospitality.
In this area, “We are bumbling along for a couple of years, but the general sense is that nobody knows anything and there should be no more certain forecasting.” Total jobs, he added, have been down the last three months in Maryland, and the outlook is not clear for Northern Virginia, “which has always been the star performer in the region.”
The number of federal contracts being let in Lexington Park, California (on the San Francisco peninsula) compared to here “is freaking me out,” Waters said. He said that with home prices skyrocketing as they are now, “we may be peaking in terms of how much people can afford to spend there. We may be bumping up against the limit of what this region can do.”
Housing inventories are now “shockingly low”, and the age cohort of 35 to 44 years is shrinking in Northern Virginia. “There is no place to put more people compared to, for example, Dallas where 500,000 new workers have shown up.”
As the Falls Church City Council prepared to begin its dive into the issue of Accessory Dwelling Units Monday, the City’s Planning Director Paul Stoddard and senior planner Jack Trainor suggested changes to make ADUs more attractive here “will be only one tool in the tool kit” to address the housing shortage locally.
At the meeting Monday, members of the Planning Commission, Housing Commissioner and Public Utilities Commission were invited to participate.
“The staff recommends Council review and provide feedback on the proposed scope of work, policy goals and public engagement schedule,” a staff brief to the Council stated. “Accessory dwelling units have become popular in cities across the country as a tool for increasing housing availability and reducing housing costs while having limited impacts on community character and sense of place.”
Final consideration of any plans on this is not expected to come before the first quarter of next year.