Arlington proposes steep fee increases and staff cuts to stabilize development fund; board to weigh trade-offs

Arlington County Department of Community Planning, Housing and Development (CPHD) and Department of Environmental Services (DES) staff asked the County Board on March 13 to approve a package of fee increases, personnel changes and a structural realignment intended to stabilize the county’s development fund.

CPHD Director Samia Byrd and DES and housing leaders said the development fund — created to recover costs for inspection, permitting and development-review services — faces a projected deficit after major investments in permitting technology, lower-than-expected permitting revenue and a changing development pipeline.

Why it matters: The development fund pays for inspection services, zoning reviews and planning resources tied to new and altered development. The fund’s condition affects review times, staffing and the county’s ability to deliver predictable permitting services.

What staff proposed - Fee increases and timing: Staff proposed advancing prior multiyear plans to recover the full cost (100%) of development-related planning, zoning and inspection services. ISD (inspection) fees for building and trade permits would rise substantially (staff cited increases in the 70–79% range for some categories); zoning and planning fees would be adjusted to approach full cost recovery (planning fees proposed to move up to 100% recovery for development-related services in FY26, increasing some fees by up to 200% relative to FY25 levels depending on the line item). DES said an ongoing 10% technology surcharge on utility-related permits will remain. - Fund transfers and reallocation: CPHD proposed that roughly 30% of current zoning operating costs that are unrelated to development services be paid from the general fund rather than the development fund (staff estimated about $1.7 million in non-development work). The shift means the development fund only needs to recover costs for directly development-related work. - Personnel changes: The FY26 proposal includes reductions and freezes: staff identified a development-fund shortfall of roughly $13.3 million projected for FY25 that the FY26 package shrinks to a negative balance of about $10.4 million. Proposed actions include four filled positions to be eliminated and three currently vacant positions to be frozen in the development fund (the presentation noted 13 positions already frozen for FY26; with the new proposal that number would reach 16 frozen positions). Staff described specific impacts: longer review times for some permits, fewer proactive inspections, and a risk of backlogs for commercial plan review if a single remaining specialist is out of office.

Staff framed the financial trade-offs: higher fees will raise costs for developers and contractors, but staff said fee adjustments represent a small fraction of overall project costs (examples in the presentation showed permit-fee increases were around 0.9–1.4% of overall project cost in three illustrative project types).

Board concerns and next steps Several board members asked staff to model alternatives, including spreading fee increases over additional years, and to return with scenarios showing impacts on review times, permit backlogs and provider costs. Staff said they could present alternative pacing and scenario modeling. Several board members urged care to preserve core review capacity and to consider options such as staggered fee changes, temporary hires or other measures to protect service levels during the transition.

Ending note: Staff urged the board to balance long-term fund sustainability and cost-recovery goals against near-term service impacts and local economic conditions; the board asked for additional modeling on phased fee schedules and staffing trade-offs before final decisions.