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Northern Virginia’s housing crunch is accelerating an exodus of young adults, middle-income families and first-time homebuyers, raising concerns about the region’s workforce and tax base.

Nearly 158,000 people left the region in 2022, approaching the pandemic-era record set in 2020, according to a Northern Virginia Regional Commission report published this month. Only 128,000 people moved in, a steep decline from pre-pandemic levels.

Remote and hybrid work have made it easier for residents to trade proximity to their jobs for less expensive communities and larger homes. Many departing residents are between 25 and 44 years old—the period when workers often seek to buy homes, settle down and start families.

The report warns that Northern Virginia could struggle to retain young, highly educated workers unless the region expands affordable housing, strengthens assistance for first-time buyers and preserves flexible work arrangements that allow employees to live farther from their workplaces.

Home prices squeeze would-be buyers

Median home prices in Prince William, Fairfax and Arlington counties ranged from $500,000 to $800,000, according to the 2023 American Community Survey. Falls Church had a median home value exceeding $1 million.

Those prices, combined with stagnant wage growth for many workers, have left middle-income households with few options. Some residents are moving farther from Washington, D.C., to find homes they can afford.

Migration to costly jurisdictions at the metropolitan area’s core—including Washington, Prince George’s County and Montgomery County—declined after the pandemic. More affordable, farther-out communities recorded substantial gains.

Household migration to Spotsylvania County increased 56% during the 2020-2022 period compared with 2017-2019. Frederick County experienced a 49% increase over the same comparison periods.

Renters face similar pressure. Many spend more than 30% of their income on housing, reducing the money available for childcare, healthcare, savings and other necessities.

The financial profile of the region’s migration is also shifting. In 2022, people leaving Northern Virginia had an average adjusted gross income of $121,875, compared with $99,641 among those arriving.

Departures threaten workforce and revenue

The loss of young professionals could make it harder for Northern Virginia employers to recruit and retain workers, particularly in technology, government contracting and healthcare. The report describes young employees as an important source of new ideas and future business leadership.

The movement of higher earners is also draining income from the region. Northern Virginia’s annual net income loss from migration grew from $1.95 billion in 2018 to as much as $3.5 billion in 2022.

That erosion could reduce the revenue available for schools, transportation, infrastructure and other public services while localities are already confronting weaker commercial tax bases.

Fairfax County, for example, is facing a budget shortfall of nearly $300 million for the second consecutive year. The strain has prompted difficult choices involving school renovations, park services and employee recruitment and retention.

County officials have also discussed a possible meals tax and other levies that could collectively generate as much as $226 million. Although Fairfax leaders have argued that the county receives inadequate state funding, the commission cautions that affordability-driven migration could intensify its budget problems.

Report calls for more affordable housing

The commission recommends simplifying zoning and permitting procedures to accelerate housing construction. Increasing supply could ease pressure on the market and help stabilize prices.

Tax incentives could also encourage developers to build homes for young professionals and middle-income families instead of concentrating new construction at the high end of the market.

The report additionally recommends expanding first-time homebuyer programs and raising their price limits to reflect current market conditions.

Public-private partnerships offer another potential tool. Arlington County’s work with Amazon to preserve affordable housing at the Barcroft Apartments is presented as a model for combining government and private resources on a larger scale.

Without a coordinated regional response, the report warns, Northern Virginia risks losing more of the workers and families essential to its long-term economic health.