The price of living so close to the nation’s capital has always been expensive, and it’s getting even higher. Those looking to buy homes in the Northern Virginia (NOVA) housing market are deep in the throes of post-pandemic inflation on top of the area’s already outrageous housing prices.
NOVA has been known for its proximity to D.C., generating a great number of job opportunities which appeal to young families and ambitious workers. This pattern became more noticeable after the pandemic when people, tired of being locked in their apartments, flocked to NOVA in search of long term housing. The pandemic also raised inflation and interest rates.
“It’s a challenging market for borrowers and buyers, especially first-time home buyers,” NVAR Board Member Jamie DeSimone of Keller Williams Capital Properties to Virginia Mercury said. “The increase in interest rates is a primary deterrent for buyers and would-be sellers. Current homeowners have no incentive to forgo their lower interest rate unless they are forced to move. That’s why home buying options are scarce.”
This significant rise of inflation rates paired with NOVA’s already ultra competitive prices has made the area’s housing market one of the most expensive in the nation. Because of such high prices, there is a scarcity of affordable housing for those who don’t meet a certain income threshold. While young families and workers making higher wages are moving into NOVA, local workers, especially those in the service industry, are unable to find housing nearby that they can afford.
According to an article published in the DCist, “For decades, rising housing costs have outpaced (more slowly) rising wages, creating a worsening mismatch between what they need to pay for market-rate housing and what they can afford.”
Many Madison teachers are unable to find affordable housing near the school and find themselves making lengthy commutes to work each day or having to find other housing options.
“There is no affordable housing in my opinion,” Madison English teacher Shamella Gaillard said. “On our teacher social media pages, there are always people looking for roommates or someone to help them because they just can’t afford it, and we don’t get paid enough to afford to be able to live comfortably in Northern Virginia. It’s just not sustainable long term.”
Still, it’s a slow effort to build new affordable housing in the D.C. area. The Northern Virginia Association of Realtors’ comparison of NOVA housing market statistics for September of 2022 and 2023 found the average sold price of NOVA houses went up 6%. Additionally, the number of active listings and new pending sales went down 29.8% and 12%, respectively. This report covers the NOVA area of: Fairfax and Arlington counties, the cities of Alexandria, Fairfax and Falls Church and the towns of Vienna, Herndon and Clifton. These statistics show that while housing prices are high, the inventory is low. In fact, Fairfax County fell short of their 2022 goal to build 4,070 units in that year, instead building only 1,270 units.
There are a myriad of reasons for this lack of new housing inventory in NOVA, particularly affordable housing. Primarily, land is costly so there’s little incentive for developers to spend their money on building affordable middle housing units, such as duplexes and small apartment buildings. They instead invest time into more profitable projects, such as renovating older buildings or building huge condos. Because of this, affordable housing typically needs to be subsidized by local jurisdictions’ trust funds, local tax revenues and the federal funds such as the Low-Income Housing Tax Credit, a federal program that awards tax credits to developers in exchange for a portion of rent-restricted housing to be saved for low-income households.
Many jurisdictions have also financed affordable housing projects with federal pandemic relief funds. Although these pandemic relief funds eventually run out and don’t make for a sustainable method of affordable housing development, they have still helped many affordable housing projects to finally come to fruition. One such project, a newly approved 450-unit affordable housing development plan for Tysons, received $19 million in pandemic relief funds, constituting over half of the project’s budget. This will contribute to the Fairfax Board of Supervisors’ 2022 goal of creating 10,000 net new affordable units for households earning up to 60% of their area median income by 2034. And perhaps by 2034 teachers and other workers in NOVA won’t need to hunt for a roommate or make an hour-long commute in order to live “comfortably”.