The county has added about twice as many jobs as homes since 2013, and an estimated 40,000 new homes are needed by 2035 to meet demand, the Fairfax County Housing Task Force said in an April housing action plan. Of the homes built in the last four years, only 13% are affordable to households that earn the county's median income.

In May, the Fairfax County Board of Supervisors adopted a budget for fiscal year 2027 that dedicates $52.7M for affordable housing initiatives, FFXnow reported.

The county is working toward its goal of advancing at least 10,000 new affordable homes by 2034, although progress has been slow. Since 2019, 1,487 affordable homes have delivered, and 1,461 are under construction, but just 1,538 are in the future pipeline, according to the county's affordable housing dashboard.

For affordable housing developers, it is hard to compete with market-rate developers, SCG Development President Stephen Wilson said at Bisnow’s Fairfax State of the Market, held at the JW Marriott Reston Station. Part of the reason is due to the costs associated with rezoning, retitling and the extra financing hurdles that affordable developers face.

Market-rate buyers have a business model where they “go ahead and rezone, redevelop, sell lots, get out,” said Wilson, whose firm specializes in affordable housing.

“Not that that's easy, but then when you layer in the additional obstacle course of financing that we go through to layer all that in, we really can never compete on the buy side of the market-rate developer.”

Financing is the key factor holding back more production, said Mike Chiappa, senior vice president at True Ground Housing Partners, a nonprofit affordable housing developer. To offer low rents and offset the cost of construction, developers often need to cobble together subsidies from multiple levels of government and private capital sources.

“A lot of the financing challenges that we have is that it's not just debt and equity, but we have probably eight to 12 sources that are sort of stitched together, and each of them has sort of their own criteria, their own sort of application process,” Chiappa said. “We sort of want all of them to move at once, but it does make it hard to be creative and nimble.” 

The market-rate side also faces its challenges, with the yield on 10-year Treasury bonds — the most important debt metric for real estate financing — hitting a 19-year high Wednesday.

“You've got the rate environment where costs have gone up, and rents have not risen enough to cover those,” Edelson said.

Developers also emphasized the time-consuming processes to get the green light for a project. Edelson said county reviews could be streamlined, particularly since comprehensive plans “have been done and redone and re-reviewed that have tons of that guidance.” 

“Maybe there are things they just don't need to review,” she said. “You know, find the places where you can say, ‘Hey, look, if you're consistent with this comprehensive plan and you can meet the density and the height and the use and the street grid, maybe there's a faster 60-day technical review to confirm that you meet all of those standards.’” 

The lack of supply is a big piece of the affordability issue, developers said. Federal Reserve Governor Michael Barr said in a speech Wednesday that the housing shortage has made shelter unaffordable for large numbers of Americans. He called out the “accumulation of local land use, zoning, permitting and building regulations” as a key factor restricting new construction

“When you don't have enough supply, the price on mortgages comes up, and so the harder and more expensive it is to go through the process, the less that something gets built,” Edelson said.