Findings at Odds with County’s Residential Growth Plan to Fuel Local Economy.
Loudoun County is facing a shortfall of more than 18,000 housing units needed to sustain its economic growth, according to a new housing needs assessment prepared by George Mason University’s Center for Regional Analysis and housing needs analysis firm Lisa Sturtevant & Associates. The report projects Loudoun will have a demand for 66,600 new housing units between now and 2040, but is prepared to add only 48,910 in that time frame.
“The county has not planned for a sufficient supply of housing to meet anticipated demand,” the report said.
The Board of Supervisors commissioned the forecast last year. Both groups that collaborated on the forecast are among the most well-respected in their fields and have run similar analyses for other regional governing bodies, including Rockville, Maryland, and Arlington County.
The report was acquired from a Freedom of Information Act request ahead of its presentation to the full Board of Supervisors, scheduled on Jan. 18. Elements of the report were provided to the County’s Housing Advisory Board in December.
The report is based off housing projections Loudoun provided to the Metropolitan Washington Council of Governments in its Round 9.0 cooperative forecasting process. It projects a negligible impact in available housing in 2020 and 2025. But by 2040, the County could face significant shortfalls.
The chart above shows the county could face a deficit of nearly 4,000 single family detached homes by 2020. That figure picks up, hitting 19,090 by 2040.
There will also be an increase in unmet demand for single family attached homes, such as townhouses, with that figure ballooning to 11,380 two decades from now. The same projects show the county has a surplus in projected multifamily condominium and apartment-styled housing.
Loudoun’s affluent demographics and suburban characteristics mean single family homes will still bring the largest demand in years to come. Already, 54.3 percent of occupied homes in Loudoun are single family detached homes, and there will be a demand of more than 25,000 households for a new homes of this type between 2015 and 2040, even though the board appears to be disinclined toward this kind of development.
“Given current plans, Loudoun County would be unlikely to be able to accommodate this level of household growth,” the report said.
Development has been a contentious issue for decades as some elected officials and community leaders have advocated for increases while other feel Loudoun has already grown too large. Over the past 15 years, the pace of new housing construction has been brisk, but in some important ways it has failed to keep up with the changing population’s needs, the report said.
It comes as the county is undertaking a new installment of its comprehensive plan, the large-scale review that direct’s Loudoun’s zoning and planning policies for the next few decades.
Since 2000, the county added 204,100 people and approximately 67,000 housing units. The average population grew by 5.1 percent but housing units grew at only 4.7 percent annually.
During this time, new housing inventory has increased, but has still not kept pace with demand. This has driven up the cost of housing for both ownership and rental. Between 2000 and 2014, the median existing home sales price increased 116.6 percent and rent increased 75.5 percent. Vacancy is still low and demand for home sales is at its highest since 2005.
Meanwhile, Loudoun had an employment growth rate of 3.8 percent from 2000 to 2014, which including the addition of 60,600 jobs. The region was at just 1.1 percent growth during that time.
In the next 25 years, Loudoun is expected to continue to grow faster than the rest of the metropolitan area. About 6.8 percent of the region’s jobs will be in Loudoun by 2040, up from 5.1 percent in 2015.
Loudoun is also expected to have the second largest increase in jobs and the second highest growth rate between 2015 and 2040.
As it becomes an increasingly stronger economic driver in the region, the report warns of the consequences of Loudoun failing to provide adequate housing.
“Without a sufficient supply of housing affordable to households across the income spectrum, Loudoun County may find it increasingly difficult to attract workers in key industries, including administrative support for professional and technical service jobs, as well as the retail, hospitality, education and health services sectors,” the report said.
The greatest impact will be among workers who have jobs in Loudoun County and would prefer to live in the County, but instead will commute from elsewhere. This would put the county at a disadvantage attracting workers and businesses. People working jobs in Loudoun will have fewer options to live in the county and will be forced to live outside of it.
Businesses could see a lack of sufficient housing options as a negative when making decisions about expanding or relocating to Loudoun. Young families will continue to be attracted to Loudoun because of its schools, but will face housing constraints. Meanwhile, aging Loudoun residents won’t be able to remain in their communities.
All this in turn could have negative effects on the local economy.
“The ability for Loudoun County to meet its full economic development potential and to remain a vibrant and growing community is not assured.”
As Loudoun plans for ways to ensure a sufficient supply of housing to meet housing needs going forward, it is important to understand the magnitude of the potential gaps that currently exist between housing demand and supply, the report said.
“These estimates of the current housing gap suggest there is a mismatch between the County’s current housing stock and the needs of current County residents,” the report said. “There is a gap between housing demand and supply at certain prices and rents, and potentially also in terms of unit sizes.”
While the largest and fastest growing source of demand for housing in Loudoun County is projected to come from higher-income households, there will also be a sizable demand for lower-income housing.
The report says the biggest risks to the County’s for-sale market are the potential obstacles to home ownership among young, working households and the challenges among older home owners to sell their homes if and when they want to downsize. A lack of sufficient supply for renters will make it difficult for lower-income workers to find affordable and suitable rental housing.
“To ensure a robust local economy, it is critical to provide sufficient housing this is affordable to workers all along the income spectrum,” the report said.
Over time, the housing affordability challenges are not expected to improve for many households in Loudoun County, and for many at the lowest income levels, the challenges will be exacerbated not only in Loudoun County, but throughout the region.
The report said Loudoun County can do its part to accommodate lower-income working households and seniors and others on fixed incomes by helping to promote or incentive the development of housing affordable to these households.
“The ability for Loudoun County to meet its full economic development potential and to remain a vibrant and growing community is not assured,” the report said. “Critical to attracting and retaining a talented workforce and to building and strengthening existing communities is the availability of a sufficient supply of housing that is affordable to individuals and families across the income spectrum.”