Fairfax County could potentially dedicate an extra penny to its affordable housing penny fund with the upcoming Fiscal Year 2021 budget by adding a cent to the real estate tax, Lee District Supervisor Jeff McKay says.

The Fairfax County Board of Supervisors chairman-elect emphasized at a work session with local and state elected officials on Tuesday that the move is far from official, but it is something the county plans to consider as its staff prepares an FY 2021 advertised budget for presentation on Feb. 25.

Fairfax County currently allocates the equivalent of half a cent from its real estate tax rate to the Penny for Affordable Housing Fund, which was established in 2006 to provide a funding source for preserving and promoting the development of affordable housing.

The proposal that the county increase the fund by a full penny from the real estate tax on top of the existing half cent comes from a report of recommendations that a group of public, private, and nonprofit stakeholders presented to the board of supervisors on Mar. 12.

Created by the board of supervisors in July 2018 to advise the county on the resources necessary to address affordable housing challenges, the Affordable Housing Resources Panel projected that adding a penny would give Fairfax County approximately $24.4 million more annually to spend on developing new affordable housing.

In its report, the panel recommended that the county set a goal of producing at least 5,000 new homes that are affordable to households earning 60 percent of the area median income or less over the next 15 years.

Even that target falls far short of the 15,000 new homes that the Fairfax County Department of Housing and Community Development determined will be needed in the next 15 years as part of its first-ever Communitywide Housing Strategic Plan, which was published in June 2018.

McKay says he thinks Fairfax County can fulfill the Affordable Housing Resources Panel’s recommendation by adding a penny to the affordable housing fund, but he also acknowledged that it would mean raising a tax that ultimately most burdens county residents with the lowest income, which could ironically feed back into the affordable housing challenges.

“We need to find a balance,” McKay said.

Fairfax County relies on real estate taxes for revenue, because unlike cities and towns, counties in Virginia do not have the authority to levy other kinds of taxes without getting voter approval through a referendum.

In its 2020 legislative program adopted on Dec. 3 by the Board of Supervisors, Fairfax County made getting the same taxing authority as cities and towns a top priority for the Virginia General Assembly.

“We need additional tools from the state to fund all of our priorities,” McKay said.

Fairfax County’s main priorities for state funding, as outlined in the 2020 legislative program, are kindergarten through 12th grade education and transportation, including the restoration of Northern Virginia Transportation Authority revenue that was diverted to create a funding stream for Metro.

While the cost of living in Northern Virginia has been a concern for years, the issue is becoming increasingly urgent as the region prepares for an anticipated influx of people and concurrent rises in housing prices with Amazon’s arrival in the Crystal City area of Arlington County.

Arlington has felt the biggest housing market impact since the online retail company announced in November 2018 that it would locate its second headquarters in the newly rebranded National Landing neighborhood that encompasses Crystal City, Pentagon City, and Alexandria’s Potomac Yard.

The median listing price in Arlington County hit $863,000 this past October, a 32.9 percent year-over-year increase, with the available housing inventory shrinking as active listings dropped 49 percent from 2018, according to a Nov. 13 “The Amazon Ripple Effect” report by Realtor.com.

While the impact is most visible in Arlington, Amazon’s HQ2 announcement has influenced the region as a whole with Northern Virginia seeing an 8.2 percent year-over-year uptick to a median listing price of $533,000 and a 26 percent decrease in active listings.

The sale price of single-family homes goes up by $13,218 for every mile closer it gets to the Amazon HQ2 location, Realtor.com found.

Del. Mark Levine (D-45th), who represents portions of Arlington, Alexandria, and Fairfax, says that the Commonwealth and local jurisdictions should allocate revenue from the new jobs that Amazon is expected to bring in to affordable housing, noting that the Virginia Housing Trust Fund “has always been underfunded.”

He argues that Amazon also needs to take some responsibility in addressing the housing issues it is exacerbating.

The company has pledged to contribute $20 million to Arlington’s affordable housing efforts, and it made some donations to some local housing charities earlier this year, giving $3 million to the Arlington Community Foundation in June and $300,000 to the planned Carpenter’s Shelter in Alexandria in November.

“We need to make sure that they are fair to our communities,” Levine said. “Everyone talks about all they’re bringing to our communities in jobs and everything, but we provide a lot for them too…We have a very educated, a very well trained workforce. Amazon’s getting a lot from us, and they need to contribute back to the community.”

Regional leaders are stepping up their efforts to address the need for affordable housing with the Metropolitan Washington Council of Governments choosing housing as its major focus for the next year, according to outgoing Fairfax County Board of Supervisors chairman Sharon Bulova.

Virginia, Maryland, and Washington, D.C., officials on the council unanimously voted on Sept. 11 to adopt regional targets for housing production and affordability that include adding at least 320,000 units in the region between 2020 and 2030.

COG has also committed to locating at least 75 percent of all new housing in activity centers or near high-capacity transit, and at least 75 percent of the new housing should be affordable to low and middle-income households, meaning the units carry a monthly cost of $2,499 or less.

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