Arlington's Office Vacancy Rate Forcing County To Cut Budget, Lay Off Employees

Arlington's office vacancy rate has hovered around 20% for nearly five years, and that is now taking a toll on the county's finances. 

County Manager Mark Schwartz Thursday proposed $20.5M in budget cuts and dozens of layoffs, which he attributed directly to the commercial vacancy rate, the Washington Post reports. 

"The difference of where we thought we were going to be in October and where we are now is a result of the commercial vacancy rate, which popped to 19.4%," Schwartz said, according to the Post. "It's the underlying challenge we face."

Nearly half of Arlington's property tax revenue comes from commercial buildings, which have lost value due to the persistent vacancy. The cuts would reduce the county workforce by 48 positions, 18 of which currently sit empty. Schwartz also proposed ending live performances during the Long Bridge Park Fourth of July celebration, discontinuing the county's quarterly print newsletter and cutting a free paper-shredding service for residents.

With a high concentration of government contractors, Arlington's office market has suffered in the years following sequestration and Base Realignment and Closure. But recent policy changes could cause that trend to reverse, with Congress earlier this month agreeing to raise federal spending caps by hundreds of billions of dollars over the next two years.

The county got a big win last year when it lured Nestlé to move its U.S. HQ from California to Rosslyn. It also has two sites in contention for Amazon's second headquarters, an 8M SF prize that would single-handedly solve the county's vacancy problem.