Fairfax County's Ground Lease Strategy: A Creative Fix for a Housing Crisis

Fairfax County is short 13,800 affordable rental homes — and with the 30-year mortgage at 7.40% as of October 8, 2026, renting affordably has never mattered more. The county is betting on a 99-year ground lease model that lets developers build below-market housing on public land for $1, trading land cost for long-term affordability. The Lodge at Autumn Willow in western Fairfax, opened June 2026, is the newest proof.

Key takeaways

• Fairfax County is short 13,800 affordable rental units for households earning 60% or less of AMI.
• Ground leases let the county provide public land to developers for 99 years at $1 in exchange for long-term affordability restrictions.
• The Lodge at Autumn Willow (opened June 2026) is the newest 150-unit example, with 46 affordable homes for seniors.
• The 30-year mortgage averaged 7.40% as of Oct 8, 2026, pushing more households into rental demand.
• Virginia Housing provides LIHTC equity + construction/permanent loans to make each project financially viable.
• Fairfax County aims to create 10,000 net new affordable units by 2034 — the ground lease is its sharpest tool.

Why Is Affordable Housing So Scarce in Fairfax County?

Fairfax County is one of the wealthiest counties in the United States — and one of its most expensive places to rent. According to a recent housing-needs study published by Fairfax County, 87% of renters earning less than $75,000 per year spend more than 30% of their income on housing, the threshold that defines "cost-burdened." Teachers, first responders, hospitality workers — the people who make the county run — are priced out of the market they serve.

The county currently has a goal of creating 10,000 net new affordable units by 2034. That target sounds ambitious until you realize the deficit: Fairfax County needs 13,800 more affordable rental units just for households earning 60% or less of the Area Median Income (AMI). Demand is growing, too: the senior population is expected to climb from 13.4% of residents in 2019 to 17.7% by 2035, and only 21% of older adults currently rate affordable housing availability in the county as good or excellent.

What Is a Ground Lease — and How Does It Lower the Cost of Building Affordable Housing?

A ground lease is an agreement in which the government owns the land and leases it to a private developer for a very long period — in Fairfax County's model, 99 years — at a below-market or nominal rate. In exchange, the developer agrees to deed restrictions that keep rents affordable for the life of the lease.

The financial logic is straightforward. In Northern Virginia, land is the single largest cost barrier to building affordable housing. When a county can remove that cost entirely, the developer can charge lower rents and still make the project pencil out. Virginia Housing, the state's housing finance authority, provides a second piece of the puzzle: Low-Income Housing Tax Credit (LIHTC) equity financing, plus construction and permanent loans, to make the numbers work end-to-end.

"Land is so limited in Fairfax County, and what's available is very expensive," said Ayan Addou, Northern Virginia Strategic Housing Officer at Virginia Housing. "Ground leases are a great way to bypass that. They're a great mechanism for a jurisdiction looking to meet affordable housing targets because they increase site control while lowering the cost of development."

What Did The Lodge at Autumn Willow Actually Build?

The Lodge at Autumn Willow is a 150-home senior community in western Fairfax County developed by The Michaels Organization on county-owned land leased for 99 years at $1. Of the 150 homes:

• 22 units are reserved for residents earning up to 50% of AMI
• 16 units are set aside for residents earning up to 30% of AMI
• 8 units are supported by project-based housing vouchers

Virginia Housing ribbon-cut the project in June 2026 after providing LIHTC equity, a construction loan, and a permanent loan. Fairfax County leased the land at a nominal rate, allowing Michaels Development to avoid land acquisition costs and pass the savings through as below-market rents.

"Having a ground lease is our way to maintain affordability for the long term of a property," said Anna Shapiro, Deputy Director for Real Estate Finance and Development at Fairfax County Housing and Community Development. "As rents continue to rise, we want to make sure people have affordable rental opportunities."

Which Other Fairfax County Communities Use the Ground Lease Model?

The Lodge at Autumn Willow is not a one-off experiment. Fairfax County and Virginia Housing have partnered on several ground-lease developments, each sited near transit to reduce car-dependence for lower-income households:

• The Exchange at Spring Hill Station — near the Silver Line in McLean
• Belmont at One University — near transit in the Fairfax area
• Indigo at McLean Station (originally Somos at McLean Metro) — steps from the McLean Metro station
• Fairfax Crest — an additional affordable community in northern Fairfax County

Transit access is deliberate. When a household cannot afford a car payment on top of rent, proximity to Metro or bus rapid transit is not a luxury — it is a necessity for reaching jobs in Arlington, Alexandria, and Washington, D.C.

How Does Rising Mortgage Rates Make This More Urgent?

The 30-year fixed-rate mortgage averaged 7.40% the week of October 8, 2026 — up 0.12 percentage points from the prior week and the highest in several months, according to Freddie Mac's Primary Mortgage Market Survey. On a $680,000 home in Fairfax County with 20% down, that translates to a $3,767 monthly principal and interest payment. Add property taxes and insurance, and a buyer needs household income well above $150,000 to avoid being cost-burdened.

When homeownership is priced this far out of reach, demand for affordable rentals intensifies — which makes the county's 13,800-unit shortage even more acute. The ground lease model is not just a nice experiment; it is one of the few tools the county has that can deliver permanently affordable units without ongoing public subsidy.

What Does This Mean for Buyers, Renters, and Investors in Northern Virginia?

For renters earning less than $75,000 a year in Fairfax County or neighboring Prince William County, the ground lease pipeline is the most practical near-term relief in sight. These developments take years to complete, but every new project adds to a permanently protected stock of units that cannot be flipped to market-rate once the economy turns.

For market-rate buyers in Northern Virginia, the ground lease story is a signal that the county is serious about workforce housing — which stabilizes local employment and supports the service economy that makes suburban life work. A county with a robust affordable housing stock is a more resilient community.

For investors, the LIHTC structure Virginia Housing uses is worth understanding. Tax credit equity is one of the primary financing mechanisms for affordable multifamily development across the country, and Loudoun County, Arlington, and Alexandria are beginning to explore similar partnerships. Developers with experience in public-private ground lease deals are well-positioned as more Northern Virginia jurisdictions follow Fairfax County's lead.

Frequently asked questions

What is a ground lease in affordable housing?

A ground lease lets a government entity own land and lease it to a private developer — often for 99 years at a nominal rate like $1 — in exchange for deed restrictions that keep rents below market rate for the life of the lease. It removes land cost, the biggest barrier to affordable development.

How many affordable housing units does Fairfax County need?

According to a county-commissioned study, Fairfax County is 13,800 affordable rental homes short of what is needed for households earning 60% or less of the Area Median Income. The county has set a goal of 10,000 net new affordable units by 2034.

Is The Lodge at Autumn Willow open to renters now?

Yes. The Lodge at Autumn Willow, a 150-home senior community in western Fairfax County developed by The Michaels Organization, opened in June 2026. Forty-six of its homes are designated affordable, with income limits ranging from 30% to 50% of AMI.

How does rising mortgage rates affect renters in Northern Virginia?

With the 30-year mortgage at 7.40% (Oct 8, 2026), buying a median-priced Fairfax County home requires income well above $150,000 — so more households stay in or return to rental housing, intensifying demand and making affordable units even harder to find.

Are other Northern Virginia counties using ground leases for affordable housing?

Fairfax County is the leader in Northern Virginia, with completed ground-lease projects near Metro stations in McLean and Fairfax. Loudoun County, Arlington, and Alexandria are beginning to explore similar public-private partnerships.

Sources

• Virginia Housing — Ground Leases Make Affordable Housing Add Up in Fairfax (2026-10-08)
• Fairfax County — Assessing Housing Needs in Fairfax County (2026-10-08)
• Freddie Mac PMMS — Weekly Mortgage Rates (2026-10-08)

Related reading

• What the Fed's Rate Hike Means for Northern Virginia Buyers and Sellers This Fall
• Why Northern Virginia Homeowners Are Buying Florida Vacation Homes Right Now
• Northern Virginia Real Estate: A Mid-2026 Market Update

Thinking about buying or selling in Northern Virginia? Reach out for a no-pressure conversation about your situation. Get in touch.

About the author — Sathi Maddu is a Northern Virginia real estate sales associate and longtime Centreville resident (since 1999). He first worked as a Realtor from 2008 to 2014, then spent 15+ years in technology consulting before returning to real estate, bringing a data-driven, contract-detail-first approach to buyers, sellers and investors across Fairfax County and the DC suburbs. Sathi Maddu is licensed with Spring Hill Real Estate (Virginia real estate license 0225279914). Contact Sathi.