Editorial: Outlook

Editorial: Outlook

Many bright spots will be overshadowed in the coming budget season.

Long awaited, the opening of the Silver Line promises to bring transformation to Tysons and around the current station in Reston, with another Reston station and Herndon to come.

The opening of Springfield Town Center has been greeted by enthusiastic shoppers, showing plenty of demand for retail and restaurants.

Housing prices are up, although so is the number of houses on the market, while the number of houses sold is down from last year.

But from local government, current economic conditions overall look more like this:

Job growth has slowed, and the jobs that are being created are lower paying. There is a decline in federal and business services employment, while the job growth that the region is experiencing is dominated by gains in hospitality and retail sectors. Slowing job growth and lower wages mean lower demand for home purchases and retail spending, while declines in federal jobs and government contractors mean lower demand for office space. The region is growing, but it is growing at a slower rate than projected one or two years ago.

Lower demand for office space translates into 19 million square feet of vacant office space in Fairfax County alone. Just for some sense of scale, that is like having eight malls the size Tysons Corner Center (2.4 million square feet) completely empty. Arlington County has an office vacancy rate of more than 20 percent; in Rosslyn, the rate is approaching 30 percent (27.7). Overall, Northern Virginia has an office vacancy rate of more than 17 percent.

Not only are companies moving their offices from older office space to newer space, more transit-oriented space, but as they do so, they are downsizing the amount of space, leaving more less modern space vacant in the process.

The result will be a very difficult budget year in Northern Virginia. It’s also a call to do things differently.

Critical to a successful economy will be to create housing that service and hospitality workers can afford. We have a massive shortage of affordable housing, and the opportunity transform some of the massive quantities of vacant office space into thoughtful, well-designed housing.