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Potential reductions to the federal workforce could further weaken Fairfax County’s struggling commercial real estate market while adding pressure to an already difficult budget outlook.

The county’s 2026 Budget Forecast, published Nov. 27, 2024, projected that nonresidential property values would fall 1.3 percent. That would mark a second consecutive annual decline, driven by high office vacancy rates and rising operating costs.

Fairfax County also faces a projected $292.7 million shortfall as employee compensation costs rise and revenue growth remains limited.

The local economy’s strong ties to Washington could magnify the effects of federal cutbacks. According to the Fairfax County Economic Development Authority, county businesses receive $38 billion in federal contracts, representing 5 percent of all federal procurement contracts.

Fairfax County Board of Supervisors Chairman Jeff McKay warned in a November 2024 board matter that any reduction in the federal government’s local presence would have a major effect on commercial real estate.

McKay and Braddock District Supervisor James Walkinshaw introduced the measure to prepare for policy changes under the incoming presidential administration. McKay said the president-elect had renewed plans to reduce government bureaucracy, including a proposed sharp reduction in the federal workforce and the replacement of nonpartisan civil servants with employees considered loyal to the administration.

The board directed county staff to assess how the incoming administration’s policies could affect Fairfax County and its local regulations.