Falls Church Considers Possible Projects for Amazon Affordable Housing Fund

The City of Falls Church is currently looking at possible projects to submit for a slice of the funds that Virginia has pledged to support affordable housing around Amazon’s planned second headquarters.

Building off a consultant’s report on ways for the city to expand its affordable housing supply, Falls Church City Human Services Director Dana Lewis and City Manager Wyatt Shields laid out some of the options being considered during a city council meeting on Nov. 9.

Proposals include purchasing both owned and rental units that would be sold to city residents and workers at a lower price and buying units at a new development in the city to make them more affordable.

Lewis says Virginia Housing, the state agency that allocates the funds, has shown a particular interest in projects that involve homeownership, as opposed to rental units, because that is a major need throughout Northern Virginia.

“When we’ve talked with Virginia Housing, it seems like they’re really leaning toward innovation and creativity and something that can be duplicated in other jurisdictions,” Lewis said. “They seem to be pretty favorable on the ideas that we’ve shared with them.”

Previously known as the Virginia Housing Development Authority, Virginia Housing committed to investing $75 million in Northern Virginia over five years in response to Amazon’s November 2018 announcement that it will build a second headquarters in a section of Arlington County rebranded as National Landing.

The online retail and tech giant’s anticipated arrival has fueled rising housing prices in Arlington and surrounding jurisdictions, raising concerns that the region’s housing affordability challenges will only worsen in coming years.

The Amazon-related funds come through Virginia Housing’s REACH Virginia (Resources Enabling Affordable Community Housing in Virginia) program, which supports affordable and accessible housing as well as revitalization and preservation efforts.

While the first year of the fund focused on Arlington and Fairfax counties as well as the City of Alexandria, smaller localities like Falls Church City are now eligible to apply for the $15 million that Virginia Housing will allocate in Fiscal Year 2021.

Localities can receive a maximum of $3.75 million, and all of the funds they are awarded must be utilized within a year.

According to Falls Church City staff, proposals will be evaluated based on their proximity to National Landing, affordability, the project timeline, land use incentives, access to public transportation, energy efficiency, and other factors.

If Falls Church decides to look at buying homes that would be owned, Lewis says the city has identified six condominiums and one townhome that can be purchased for less than $700,000. They would be sold to buyers whose income is 60 to 80% of the area’s median income.

If the city decides to purchase a rental property, the units would be rented at a rate below 60% AMI, according to Lewis.

“We’d hold onto the units and then, at some point at a later time, maybe possibly combine them into a larger development plan,” Lewis said.

City Councilmembers Ross Litkenhous and Letty Hardi expressed interest in the idea of Falls Church exploring a homeownership program, noting that the importance of homeownership to people’s ability to accumulate wealth in the U.S. has contributed to racial inequities.

Councilmember Phil Duncan, however, questioned whether a homeownership program would allow Falls Church to produce enough affordable housing.

“Just because property here is so blooming expensive, [homeownership] is going to move the supply needle by handfuls of units, not dozens or hundreds,” Duncan said. “I think we need to find some way to try to move in the dozens or hundreds direction.”

With only four more council meetings scheduled for the rest of the year, Shields says city staff will keep the council updated on their work on the REACH application. He anticipates having another in-depth discussion on the topic at a work session on Dec. 7.

The deadline for localities to submit applications for Amazon REACH funds is Dec. 31.

“This is kind of at the testing-out ideas phase of this grant application, but we are moving quickly,” Shields said.