Condos are missing from Fairfax County's revitalization story
Apartments are becoming a tough sell in revitalizing areas of Fairfax County. Market support for rental units appears tepid, and the community is often opposed. Condominiums may be an attractive alternative, but so far nobody is talking about the them.
In January 2011, Redbrick Development Group announced a mixed-use development with 290 luxury apartment units in Fairfax County, just south of Alexandria. In the intervening 17 months, a parade of other developers has come forward with proposals for similar rental projects.
This wave of apartment development in a long overlooked corner of Fairfax County mirrors the regional trend. According to Transwestern's 2012 Trendlines report, the Washington Metro area set an all time local record in 2010 when the number of occupied apartment units (a measure called "net absorption") increased by more than 12,000. In response, in 2011 apartment developers began work on more than 14,000 units.
Unfortunately, the region's net absorption fell to just 3,300 units in 2011. This suggests that many of the new luxury apartment buildings in the development pipeline may struggle to fill their units. The report cites a slowdown in job growth for the lack of absorption.
Although affordable apartments remain in high demand, very few are being built because new buildings tend to be expensive. They become affordable over time as they age, but for the first couple of decades after construction almost all buildings are expensive. This means that while there is plenty of demand for apartments, there is a growing danger of a glut of luxury apartments.
In southern Fairfax County specifically, which has long been a stagnant area for development, but where construction is picking up rapidly, there is a mounting citizen backlash against the prospect of Richmond Highway being saturated with hundreds of new rental units. During the recent debate over the redevelopment plan for the Penn Daw area many citizens spoke angrily against the expected influx of hundreds of new renter households. While some comments were anti-development in general, many were pointedly targeted at rental apartments and their occupants.
All of this begs a simple question: if both market support and public support are thin for luxury rental housing in revitalizing areas of Fairfax, could condominiums be the answer?
The same Transwestern report that documented a decline in apartment absorption went on to predict that the Washington region's condominium market was poised to come back strongly in 2012. New projects are selling well for the first time since 2008, prices are stabilizing, and the backlog of unsold units is at its lowest level since 2006. Market indicators are suggesting that that the condo market is finally ready to come back to life, and apparently developers are starting to agree.
Yet in Fairfax County not a single new condo development began construction or sales activity in 2011.
Oddly, even owner-occupied townhouse developments appear to be rare. KB Homes has an 85-unit townhouse development on Huntington Avenue that sold out earlier this year, and EYA is planning some in Merrifield. But most of the residential redevelopment action across the county remains for-rent rather than for-sale.
As Fairfax works to revitalize its aging commercial areas, for-sale housing is an essential ingredient. If the revitalization areas contain nothing but rental apartments they run the risk of becoming less stable in the long term. The next phase of suburban revitalization should broaden the mix of housing types to include condominiums.
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