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Falls Church lays out savings plan for Virginia Village redevelopment; staff says millions more required
Summary
Staff told the Planning Commission the city will direct most Affordable Housing Fund resources toward a Virginia Village acquisition/reserve fund to support redevelopment of nine city‑owned properties; the city has about $1.9M on hand and a recent $850K federal grant but faces an estimated funding gap (tens of millions depending on unit counts) and will study options, including developer partnerships and preservation alternatives.
City housing staff briefed the Planning Commission on Feb. 18 about the Affordable Housing Fund and a strategy centered on Virginia Village, where the city now owns nine of roughly 20 small multifamily properties.
Staff described a restructured, six‑year approach to the Affordable Housing Fund. Key points:
- Local annual contribution reduced from the $500,000 target in earlier plans to $200,000 because of recent budget constraints. - The CCAU (City Committed Affordable Unit) voucher program will continue; staff projects ~15 voucher units with a current annual spend allocation and a modest escalator provision. - The affordable homeownership program (previously supported with one‑time Amazon Reach grant funds) is expected to wind down as those grant funds are exhausted. - Virginia Village strategy: with nine city‑owned properties (previously six), staff sees a redevelopment inflection point. Early developer feedback indicates redevelopment with meaningful affordable housing is feasible but will require substantial local subsidy — staff estimated roughly $80,000–$120,000 of local subsidy per affordable unit in a redevelopment scenario. For a 100‑unit project, that implies a $8–12M local funding need beyond current reserves.
Staff reported the Affordable Housing Fund currently holds about $1.9M allocated toward Virginia Village and that the city recently received approximately $850,000 in federal grant funds for the acquisition/strike fund. Cash‑in‑lieu payments from future developments (the Quinn and Westfall senior projects are potential sources) are projected in later years and will be reserved for Virginia Village under the current plan.
Commissioners asked whether the city or a private developer would own buildings after redevelopment; staff said ownership model will depend on how an RFP and development partnership are structured but that typical approaches include donating land plus local subsidy to a development partner who builds and operates the housing under long‑term covenants. Commissioners also asked whether preserving or buying down existing expiring covenants could be a more cost‑effective alternative; staff said analyses indicate Virginia Village—because of the city's existing land holdings—may deliver more long‑term affordable units per dollar in many scenarios, but staff will develop more detailed financial comparisons and bring options to Council.
Next steps: staff will prepare an RFP framework, consult development partners and a consultant to analyze financing options, and present updates to Council in coming weeks; planning commission members expressed interest in participating in outreach and potential steering committees for the site planning and rezoning pieces.
