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Potential reductions in the federal workforce could intensify Fairfax County’s commercial real estate troubles, putting additional pressure on local revenue as officials confront a projected $292.7 million budget shortfall.
The county’s 2026 Budget Forecast, published Nov. 27, 2024, projected that nonresidential property values would fall 1.3%, marking a second consecutive year of declines. High office vacancy rates and increasing operating costs are driving the drop.
Fairfax County is particularly exposed to changes in federal spending and employment. Businesses in the county receive $38 billion in federal contracts, representing 5% of all federal procurement contracts, according to the Fairfax County Economic Development Authority.
Jeff McKay, the Democratic chairman of the Fairfax County Board of Supervisors, warned in a November 2024 board matter that any reduction in the federal government’s local presence would significantly affect an already-declining commercial real estate market.
McKay said county leaders needed to prepare for policies proposed by the incoming presidential administration. He cited plans to sharply reduce the federal workforce and replace nonpartisan civil servants with workers considered loyal to the new administration.
McKay presented the measure with Democratic Braddock District Supervisor James Walkinshaw. The board directed county staff to evaluate how the incoming administration’s plans could affect local policies.