In October, Fairfax County published its latest progress report on Tysons. Each year since the Board of Supervisors passed the 2010 plan for redevelopment, the county has published reports on how well development outcomes are meeting the plan’s objectives. The plan is an important effort in transparency and accountability that more localities should implement to assess whether or not development outcomes are meeting the stated goals of development policy.
The 2020 report provides some important updates on housing construction in Tysons, and it also provides an opportunity to evaluate the effectiveness of the plan’s income-restricted housing requirements. Here’s what we discovered.
Housing construction in Tysons
The Tysons comprehensive plan calls for a substantial increase in residential development in Tysons. The plan relies on an increased residential population in Tysons to “transform Tysons from a suburban office park and activity center into a 24/7 urban center marked by the diversity of residents and workers.” The plan sets a target of 100,000 residents in Tysons by 2050, more than a fivefold increase from its 2010 population of 17,000.
Since 2010, there’s been impressive progress toward permitting residential development. In the first year following the adoption of the redevelopment plan, developers proposed nearly 17,000 new units, when fewer than 9,000 units existed in Tysons. County policymakers have acted relatively quickly to approve units as they’ve been proposed. In the graph below, the gray portion of each bar representing approved units has consistently expanded as policymakers have worked through the initial rush of proposals.
Currently, the average household size in Tysons is 1.88. If this household size remains consistent, occupancy of existing units, those under construction, and those approved or proposed would put Tysons’ population at 85,500. This would be well on the way to the goal of 100,000 residents, and. presumably developers will continue proposing additional residential projects in the meantime.
The number of existing units is, unsurprisingly, lagging the number of proposed and approved units since high-rise development is often a slow process every step of the way. However, if the rate of construction fails to increase to reflect the large number of approved units, the Tysons population will fail to meet county policymakers’ goals for population and jobs-to-housing ratio. Since 2011, the number of units added to the stock each year has averaged about 530 and the number of units under construction has averaged 911 units, and peaked in 2015 so far. At this rate of construction, the number of residential units will only reach about 77,000 by 2050.
When asked about the seemingly slow rate of projects moving into the “under construction” phase, Suzie Battista, Acting Chief of the Urban Centers Section for the Fairfax County Department of Planning and Urban Development, attributed the slow down of residential construction in recent years to temporary market saturation. “We’re monitoring the plan very carefully. Our feeling is that the plan is working as intended,” she said. “We’re not seeing any red flags.” Battista added that in the coming years, County policymakers may consider changes to development rules in Tysons if residential construction continues to be slower than the plan’s objectives.
Income-restricted housing in Tysons
In addition to establishing goals for increasing housing in Tysons generally, residential developers are required to set aside 20% of new units as affordable to households making from 50% to 120% of the county’s median income in exchange for a 20% density bonus. Density bonuses allow developers to build larger buildings—and in turn more housing units—than underlying zoning would otherwise permit. Localities often offer density bonuses in exchange for a portion of income-restricted housing.
Some evidence indicates that this practice, often called “inclusionary zoning,” can be a tax on housing construction. If the value of the density bonus that developers receive is less than the cost of providing below-market-rate units, inclusionary zoning can slow new housing construction and increase the price of housing for everyone who doesn’t receive a subsidized unit.
In the case of Tysons, however, it appears that the county’s requirements for workforce dwelling units and affordable dwelling units are offering little if any benefit to the residents who live in them, and are, in turn, having little or no effect on housing market outcomes.
At over $120,000, the median income in Fairfax County has one of the highest median incomes in the country. A household earning the median income for the county is earning close to twice the national median. Income-restricted units in Fairfax are set aside for households earning between $44,100 to $151,200, depending on the household size and income level.
Due to the combination of high incomes for many residents and multifamily housing construction in Tysons and elsewhere in the region, households with earnings that qualify them for income-restricted units often have options for market-rate housing that are affordable to them. Even much of the new construction in Tysons is affordable to households in this income range.
At the Lumen building, for example, the difference between a one-bedroom workforce dwelling unit and the lowest-cost one-bedroom available on apartments.com is less than $200. The same sources show that market-rate two-bedroom at the Lumen is available for the same price as a two-bedroom workforce dwelling unit.
A task force has examined the workforce dwelling unit requirements in Fairfax County and recommended that the County Board of Supervisors revise the requirements to serve exclusively households earning less than the county’s median income.
However, it’s really households at the lowest end of the income spectrum that struggle to afford housing in Fairfax County. Generally, inclusionary zoning programs are not well-suited to serving the very-low-income households—those earning, say, under 30% of the county’s median income.
Providing new-construction units to these households is often a large tax on construction. Inclusionary zoning programs targeted to these households either require few set aside units, or they may choke off housing construction entirely because they’re too expensive to comply with. County policymakers could instead use revenues from increasing property values in Tysons to finance housing subsidies for the county’s lowest-income households.
Nonresidential development in Tysons already offers a model for this approach. Developers on office or hotel projects are required to contribute at least $3.00 per square foot to the county’s affordable housing fund. Following the construction of the Silver Line and the redevelopment plan that substantially increased development rights, land values have increased sharply in Tysons and continue to rise. Due to the large increase in property values in Tysons, county policymakers have been able to levy extensive taxes on Tysons development without choking off construction proposals. The same approach could be applied to residential construction, and the trust fund could be dedicated to subsidizing housing for the county residents who need it most.
If housing affordability is a county policy priority, resources should be allocated to where they’ll do the most good. This means dedicating subsidies to households at the bottom of the income distribution, starting with those living in poverty who are not receiving other housing assistance. And, in order to do the most good for these households, these resources should be allocated to helping them afford safe, transit-accessible housing in Fairfax County, but not necessarily new construction housing in Tysons.