Arlington Expands Innovative Approach to Commercial Market Challenges

Published on October 11, 2023

Arlington County has launched the next phase of its efforts to proactively address the structural changes in the commercial market and the impacts office vacancy has on County revenue, seeking to remove regulatory barriers to market-based solutions.

The Arlington County Board held a work session on Oct. 10, 2023, to hear the County Manager and staff’s initial approach to the Commercial Market Resiliency Initiative (CMRI) 2.0, which will build on the work the County has been doing for the past year. Since 2022, the County Board has established several new uses for commercial buildings—urban agriculture, research and development, commercial and ghost kitchens, and micro-fulfillment centers, among others.

RELATED: Read frequently asked questions about CMRI

"We are in the midst of a paradigm shift in our commercial market that has fundamentally changed how people work and how businesses operate, both in Arlington and nationally," Board Chair Christian Dorsey said. "Our challenge is to adapt to this new environment while leveraging all that makes Arlington great. The CMRI 2.0 continues our commitment to modernizing our approach to Arlington's regulations and processes, and to working quickly to find solutions that ensure our community remains resilient and world-class."

Historically, Arlington had close to a 50/50 split in its tax revenue between commercial property taxes and residential property taxes. As more workers enter a hybrid or remote model, more companies are letting leases expire or downsizing their office space. These office vacancies impact the value of commercial buildings, which affects property taxes. A decline in commercial property taxes shifts more of the tax burden to residential property owners. When revenues decrease, County services and programs that benefit everyone are impacted.

MORE: CMRI Fact Sheet

CMRI 2.0 is designed to address the changing commercial and fiscal reality. It will focus on five strategic areas: office conversion, repositioning, redevelopment, tenant support, and placemaking.

Staff has identified several workstreams that will allow the County to work on all strategic areas simultaneously. The workstreams include planning processes (Special GLUP Studies, minor and major Site Plan amendments), the sign ordinance, parking regulations, green building incentives, and conversion of office buildings, among others.

The workstreams will not be considering wholesale changes to existing policies or regulations. Instead, they will examine specific areas where increased flexibility could result in new opportunities to stabilize and improve the commercial portion of the County’s tax base.

Each workstream will have its own timeline and community engagement with stakeholders, both of which will be guided by the subject matter and its potential impact on the community. Items will be brought before the County Board incrementally, with the first one not expected until 2024.

County Manager Mark Schwartz noted, “For us to thrive, we need to respond quickly and thoughtfully to the new market. We welcome input from residents and commercial property owners. I am convinced we can adjust our approach, but it will only happen with changes to some of our practices and by working with the community to ensure we remain true to the vision of the County.”

Learn more about the Commercial Market Resiliency Initiative and get the latest updates on the CMRI webpage

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