Study presented to Fairfax supervisors: converting vacant office buildings to mid‑/high‑rise multifamily can produce a net fiscal gain under study assumptions

Keenan Rice of MediCap presented a fiscal impact analysis to the Fairfax County Land Use Policy Committee estimating that, for the mid‑to‑high‑rise urban infill scenario analyzed, multifamily development produces a net positive fiscal impact for the county under the study’s assumptions.

Rice summarized the analytical approach: MediCap reviewed Fairfax County budget line items with county staff, used county student‑generation rates and valuations, and modeled revenues and expenditures over a 30‑year horizon while explicitly not assuming growth in values or tax rates. For a notional 270,000‑square‑foot building converted to roughly 240 apartments, MediCap reported that the multifamily scenario raised annual tax revenues by about $1.4 million (real property roughly $900,000; personal property nearly $400,000; sales taxes about $100,000) and increased public service costs by about $833,000 — yielding "just over $600,000 per year" in net fiscal impact under the stated assumptions.

For comparison, MediCap estimated a vacant office building would generate about $221,000 per year in tax revenues with modest expense impacts (reported at about $38,000), for a net impact of roughly $183,000 per year. Rice explained that comparing the two scenarios produced a multifamily advantage of several hundred thousand dollars per year and aggregate figures he cited in discussion — an approximately $425,000 annual advantage and an approximately $13 million advantage over 30 years in one framing, while the multifamily 30‑year aggregate was also discussed as about $18 million in another framing; Rice emphasized the study’s conservative baseline assumptions and that different comparisons use different baselines.

Rice attributed the office vacancy forecast used in the presentation to CoStar, which provided a Fairfax County projection showing vacancy increases beginning around 2020 and a modest rent recovery that does not return to pre‑2020 levels in the decade reviewed. Supervisors and staff discussed data sources (CoStar) and asked for alternate scenarios; Rice and staff said they could prepare additional scenarios, incorporate enterprise‑fund impacts (water/wastewater) and refine assumptions on valuations and occupation rates.

Why this matters: testimony linked aging and vacant office parks to negative local effects on retail and small businesses, and the board’s discussion connected conversions to workforce housing supply, retention of retailers and potential benefits for affordable‑housing objectives. Several supervisors asked for follow‑up work on indirect/ancillary benefits, alternative scenarios (e.g., partially re‑filled office), and further breakdowns by submarket and enterprise fund impacts.

Representative quote: "For the assumptions we made here about mid to high rise density, urban infill projects, it does actually produce a positive fiscal impact. We estimated just over $600,000 per year," Rice said.

The committee did not make a formal decision; supervisors asked staff to consider additional scenario analyses and to coordinate with EDA/DEI and other county offices on forecasts and follow‑up analysis.