Fairfax County’s efforts to support additional affordable housing may have received an unexpected boost from the recently passed federal budget reconciliation act.
County officials are working through the details, but the changes in federal law could represent “a significant step forward” in financing affordable housing, Tom Fleetwood, director of the county’s Department of Housing and Community Development, told the Board of Supervisors at a housing committee meeting yesterday (Tuesday).
The tentative optimism stems from a permanent expansion of federal low-income housing tax credits that can be sold by affordable housing providers to offset the construction costs. The expanded tax credits are expected to cost the U.S. $15.7 billion in lost tax revenue from 2026-2035, but they could finance an estimated 1.22 million additional affordable rental homes over that time, according to the accounting firm Novogradac.
“It sounds like we’re going to hopefully get more dollars into projects,” Franconia District Supervisor Rodney Lusk said.
“Presumably it will make it easier to build affordable housing,” said his colleague, Dranesville District Supervisor Jimmy Bierman.
While the reconciliation package may bolster Fairfax’s affordable housing efforts, the Trump administration is pushing to slash funding for federal housing programs overall by as much as 44%. Proposals for the full fiscal year 2026 budget include major cutbacks in rental assistance and programs to address homelessness, Fairfax County officials say.
Unlike the reconciliation bill, which was signed into law on July 4, the full budget package still has months of congressional consideration in front of it.
“The negotiations will carry on for some time,” Fleetwood predicted.
Determining exactly how the changes — both those that have been approved and those still under consideration — will affect the county government remains a work in progress.
“On the one side, we’re actually expecting some gains … [but] it is a really moving target,” said Callahan Seltzer, the Fairfax County Redevelopment and Housing Authority’s real estate and community development finance division director.
As a result, elected officials were eager to get more definitive staff feedback sooner rather than later.
“We’re wanting to have more clarity,” said Providence District Supervisor Dalia Palchik, who chairs the housing committee. “We have a lot of questions and concerns.”
“I don’t know if there’s any more complicated topic we deal with,” Palchik said of financing affordable housing projects.
At the meeting, housing staff said the county is making progress on its goal of 10,000 new affordable units countywide by 2034, a target set by the Board of Supervisors in 2022. About 13% of that total has been delivered, an additional 15% is under construction and 10% is in pre-development phases, according to staff.
