Blog posts are the personal views of Letty Hardi and not official statements or records on behalf of the Falls Church City Council

Dear Friends,

‘Tis the season for to-do lists, holiday parties, and busy schedules and in that vein, this will be also be a packed post with updates across many city topics: early financial forecast (and a timely plug for shopping local and why it matters!), updated demographics and projections, continued good news on affordable housing and economic development fronts. This was a super interesting week of meetings so I hope you’ll find the post useful. Make sure you get to the end as there’s a new business in 2024 that you’ll be excited to see.

Next week is our last City Council meeting of 2023, which will be a bittersweet occasion as it includes oaths of office for incoming members and farewells to outgoing members.

Take care,
Letty

What Happened This Week:

(1) FY25 Financial Forecast

As the unofficial kickoff to budget season, we had our annual joint City Council-School Board meeting this week and heard early forecasts for revenues and budget cost drivers. This forecast is important context in advance of City Council issuing “budget guidance” next week to guide the development of the general government and school budget development in the coming months.

The TL;DR headline is a projected 8% revenue growth, which may be one of the strongest revenue projections I’ve seen to date. The details are important, so here are additional points:

• 8% Growth!
  • Out of the 8% revenue growth (equivalent to about $7.5M), 1/3 of the new revenue is from new construction ($2.1M), attributable to several major projects underway that are beginning to generate taxes.
  • 8% is more than 4X the revenue growth many of our neighbors are projecting (Alexandria 1.5%, Arlington 1-1.6%, Fairfax County 1.9%) – putting us in a uniquely positive and fortunate financial position in the region.

• Increased property values
  • Besides new construction, some of the revenue growth is also due to increased property values – for example, estimated 4.7% growth for residential assessed values.
  • Assuming the tax rate is held the same at $1.23 (see here for tax rate history), the tax bill would increase $540 for the median homeowner due to these higher values.
• Local taxes matter
  • We’re also expecting strong performance in local taxes, a sign of a continued healthy local economy. When you shop or eat local, you are directly contributing to this tax revenue, which is becoming a larger share of our total tax base, around 20% of the total.
  • Sales tax, meals tax, and gross receipts taxes (BPOL) are all projected to grow 6%, 27%, and 11% respectively next year.

• Costs
  • Besides rosy revenues, we do expect increased growth in population and student enrollment, WMATA funding wildcard, a continued competitive labor market, and other needs so those will be key budget drivers we’ll need to balance.

(2) Demographics Report Out & Projections

In the same joint meeting, we also heard a report out on our first post-Covid demographics update and projections (which we had last updated in 2018) by the Steven Fuller Institute at GMU. Demographics and projections will be used in regional cooperative forecasting, school enrollment projections, planning for affordable housing needs, and updating our Comprehensive Plan. If you find this super interesting, the full deck and report are available, but I’ll pull out what I found to be the most insightful points:

• The DC regional economy is actually growing slower than the US (as measured by GDP). Of most concern is the overall out-migration of population across the DMV due to high housing costs and slowing job growth in various sectors. Housing was noted as a key factor in DC staying competitive in the US.
• In Falls Church, the last census had us at 14.6K people, 5600 households, with 36% of households with kids – a sizeable jump from 31% just 10 years ago.

• Also notable is the jump in households earning $150K – it grew from 43% five years ago to 52%. Median income in 2012-2016 was $115K and from 2017-2021, median income is $155K.

• In response to perception that Falls Church’s population growth is faster than elsewhere – the demographers compared us to other regional activity centers and pointed out that Falls Church is actually just at the “leading edge of the middle of the pack” and there are other communities in the region growing much faster.

• It’s no surprise to anyone looking to move to Falls Church that the data also points out that housing demand far outstrips supply – between super low vacancy rates, low “days on market” when a property is listed – anything that gets built will be sold/rented/occupied.
• It’s worth pointing out insights from the jobs and commuting data: income data shows that workers who live in Falls Church earn far more than workers who come to Falls Church for jobs. Also, an overwhelming majority of our residents don’t work in Falls Church (it would be interesting to revisit with more recent 2022-2023 data when post-Covid work from home patterns have further settled) – which have implications on mobility, environment, and urban planning.

• Finally, we also received population and student enrollment projections. Similar to past forecasts, we’re expected to hit 20K in population around year 2035 and 3000 students in FCCPS. The past 5-10 years of capital planning and investment in our schools and other infrastructure means we are ready to handle this growth.

(3) Affordable Ownership

In the Housing Commission meeting this week, among other topics – we also heard good progress on affordable homeownership program. To date, we’ve helped 3 households attain ownership opportunities in Falls Church (which we all know is increasingly hard), with a 4th closing in the coming weeks. Two additional properties have also been added to the available homes, and it’s notable that they’re 3 bedroom units which will be helpful for families.

If you are interested in participating in the program – either as an interested buyer or seller, please reach out. As noted in the demography section above, housing supply is very limited, so we’d love to add more units to the program. The City offers sellers an all-cash, competitive price for your home. And you’d also get the added “pay it forward” benefit – your home would become an affordable ownership opportunity for a potential buyer and future buyers in perpetuity.

(4) New Business Alert

We also learned that there will be a new business opening at the ground floor of the Kensington, where Famille was previously located, which closed during 2020. As evident by our bustling coffeeshop and restaurant scene, this will be a welcome addition in the “midtown” part of Falls Church.

And while we’re on restaurants, the latest count is 162 restaurants in the city. Save the date for our first ever Restaurant Week in January.

What’s Coming Up:

Monday, December 11 – City Council Meeting*

*Mondays (except 5th Mondays and holidays) at 7:30 pm. You can access the agenda and livestream here, including recordings of past meetings