Custom homebuilder Andrew Moore remembers the days when getting a new home approved for construction in Arlington involved about five pages of plans and a stroll from office to office in the same county building. Back then, the entire approval process took about six weeks. The system was much faster, cheaper and simpler than it is today, says the owner of Arlington Designer Homes Construction.
That was before the county’s revised stormwater management rules went into effect in 2014, adding another layer of regulatory hurdles. Those and other requirements have made the process more tedious, he says. Today, the permitting for a new build or large-scale renovation can require up to 100 pages of paperwork and drag out for six months, says Moore, who’s been building luxury homes in the area for 20 years.
And, of course, time is money. Protracted construction timelines can leave homebuyers paying extra rent for temporary housing (or in some cases, two mortgages) or builders shouldering carrying costs (things like property taxes, insurance, interest on construction loans and utilities for the building site) that are ultimately passed on to the client.
But regulatory hurdles aren’t the only factors driving up building costs. Skyrocketing land prices, consumer demand for larger homes, inflation (which has goosed the price of raw materials) and interest rates are also in play. (Editor’s note: This story appeared in our March/April issue before the Trump Administration’s tariffs on steel and other raw materials went into effect.)
So is old-fashioned supply and demand. Arlington’s outstanding amenities—great schools, public transit, parks, services—and proximity to high-paying jobs has for decades made it a highly desirable place to live. And with only 26 square miles, the county has little open land for development. Older homes are often leveled to build something new, adding the cost of demolition to the price tag.
At the start of 2011, the median sale price for a single-family home in Arlington was $700,000, according to Bright MLS. By the end of 2024, it had doubled to $1.4 million. Falls Church saw its median price jump from $482,000 to $975,000 over the same time period. In McLean, the median price spiked from $950,000 to $2.35 million.
According to builders, Arlington’s stormwater rules have become a significant source of project delays. The rules kick into effect when the “land disturbance” (e.g., disruption to natural grading and the root systems of trees) created by a construction project exceeds 2,500 square feet. Once that threshold is crossed, the project must have both a regular building permit and a land disturbance permit to proceed, and the finished home must include a number of water management features on site.
The stormwater rules were implemented in response to a federal mandate that put municipalities in the Chesapeake Bay watershed on a pollution “diet,” limiting the amount of runoff they can release back into the region’s streams and rivers.
The goal, explains Aileen Winquist, Arlington’s stormwater communications manager, is to protect wildlife and drinking water sources. “People assume it’s rainwater, it’s clean, right? But that rainwater is running from people’s yards over roads and it’s picking up oil and trash and pet waste and fertilizer, and all these are going into our local streams.”
Jason Papacosma, manager of Arlington Watershed Programs for the county’s Department of Environmental Services, says most applications for land disturbance permits take two or three rounds of back and forth before builders get it right.
The red tape isn’t the only strain on homebuilders. Moore says that in addition to holding costs and headaches from construction delays, the county has ratcheted up its permitting fees by 30% each of the past two years.
Those fees are just the tip of the iceberg. Chad Hackmann, regional partner with Alair Homes Arlington, estimates that county requirements for on-site water detention features, such as permeable driveway pavers, planters, storage tanks and dry wells, can add as much as $100,000 to a home’s total price tag. (To be safe, Moore tells clients to plan for $150,000.) The civil engineering fee alone for a project exceeding the land disturbance threshold costs $15,000 or more.
Hackmann claims Arlington’s approach to residential development is more onerous and capricious than in neighboring jurisdictions. For instance, a building permit for a 4,000-square-foot house in Arlington might cost about $25,000, compared with $15,000 in Fairfax County. And that’s not counting hidden costs that arise when construction timelines drag out.
“We probably are more strict in a lot of ways,” Papacosma concedes. “But I think it’s driven by the impact dynamics that we’re seeing.” He’s referring, in part, to Arlington’s tight-knit neighborhoods, which are more densely packed than newer developments in points north and west. (In January, a snapshot of Northern Virginia homes for sale found lots averaging 1.06 acres in Fairfax County, compared with .19 acre in Arlington, per Bright MLS.)
Within the confines of Arlington’s snug landscape, water is a bigger issue. Lots are smaller. Runoff onto adjacent properties can cause erosion and problems far worse, such as flooding, for neighbors.
Combine that geography with Arlington’s rising wealth—in 2023, the median household income was $140,160, up from $99,651 in 2011—and you’ve got a problem. As demand for larger homes has given rise to new builds that fill every allowable cubic foot of the building envelope, there’s less permeable ground left over to absorb excess water. Houses are getting bigger while yards are shrinking.
Water Woes
Arlington’s stormwater management requirements to prevent runoff are among the many factors driving up building costs. Since 2013, larger residences have contributed to a significant increase in impervious surfaces that don’t absorb water.
Cumulative impervious surface increase (in acres) for various types of development in Arlington County:
Source: Arlington County
Some 70% of Arlington’s private land is zoned for single-family homes, Papacosma points out. Amid all the teardown construction, the county has seen a steep increase in impervious surfaces such as expanded roofs and driveways. Of the 200 to 300 land disturbance permit requests his office receives each year, he says, most are for single-family homes.
Some cities and counties process runoff in municipal sewers and then charge homeowners a fee, but Arlington requires that new construction projects include on-site water containment. The county already has its hands—and sewers—full, Papacosma says, from past development. He and Winquist defend Arlington’s approach as an exercise in fairness, in that the water management costs are borne by those creating the land disturbance, versus spreading those costs to all taxpayers.
But for buyers of new homes, the added expense doesn’t end once construction wraps up, notes architect Tripp DeFalco, owner of DeFalco Home Design in Arlington. At closings, many homeowners are surprised to learn they must pay to maintain water absorption elements like dry wells on their properties, with county inspectors making regular checks, even though those costs don’t “give you any more utility in the house.”
Now add climate change to the mix. Arlington updated its land disturbance rules in 2021 after increasingly intense storms caused flooding in several areas. A survey of county residents found that “they wanted the county to do more to manage that lot-to-lot runoff,” Winquist says.
Today, the rules require homeowners to manage both the quality and quantity of water flowing off their property.
Before Arlington started regulating stormwater runoff in 2014, Papacosma says, neighbors would call to complain their homes were flooding because of upstream development. The county couldn’t do anything to protect those residents. “That was, from a public policy and stewardship perspective, not the right place to be,” he says. “As a government entity, we have the ability to be stewards.”
Sarah Riddlemoser, principal of the local firm Moser Architects, says she does worry about the environmental impact of builders going for maximum lot coverage and sacrificing green space. But she also shares contractors’ frustrations over county regulations that are “a moving target” and therefore hard to predict. “The rules are very tight, and they keep changing,” she says.
Moore claims this problem extends not just to stormwater regulations, but to the building code in general: “Each time the code changes, you’ve got an increase in requirements, and an increase in cost.” He says Arlington’s interpretation of the rules changes frequently without much transparency or consistency.
“I love it when an Arlington County employee who’s been there for four years says, ‘Well, this is the way we’ve always done it.’ And I’m like, ‘Well, you know what? I was here five years ago, and that’s not the way we did it five years ago,’ ” Moore says. “They keep changing and trying to tweak the systems and therefore moving the goal posts.”
According to Hackmann, those seemingly innocuous tweaks are what sends members of the trade back to the drawing board without the approvals they need to break ground.
“Arlington likes to change their interpretation,” he says. “They don’t like to change the rules, because that requires county board involvement…but they will change their interpretation. What they interpreted as fine a couple years ago, now they’re interpreting as not fine…which is now going to cost your homeowner more money. That drives people nuts. It makes it hard to have predictability in costing.”
Papacosma says county officials meet regularly with contractors and welcome their feedback: “Feel free to express it, and then we can look into it.”
High inflation drove up homebuilding prices in recent years. So did fluctuating mortgage interest rates, which went from around 3% only a few years ago to 7%, says Terry Clower, director of the Center for Regional Analysis at the Schar School of Policy and Government at George Mason University.
Hackmann has a few observations about how this all played out: “When the interest rates were low…people had silly amounts of buying power and some were desperate to get these houses. Since the interest rates were so low, they were willing to overpay. Many folks also had more cash on hand since Covid restrictions kept them from traveling, eating out and doing other things they used to do.”
Then interest rates spiked, jacking up mortgages for homebuyers and borrowing costs for builders seeking loans for speculative projects, thus baking more costs into the price tags for new homes.
With the fed’s rate increases, housing markets in other parts of the country experienced less demand and prices leveled off, observes Michelle Sagatov, an Arlington-based real estate agent with Washington Fine Properties. But Arlington has such a tight supply of homes that the correction didn’t happen here. Prices may not be increasing by 10% annually, but increases of 3 to 4% are still the norm, says Sagatov, whose husband is a custom homebuilder.
Now that rates are higher, some homeowners who might have pulled the trigger on a new build or moved to larger digs are reluctant to take on both a more expensive house and a higher interest rate. As they stay put in their existing homes, the market’s dearth of supply raises prices.
“I may like my house, but I love my mortgage,” quips GMU’s Clower.
Today, the inventory of single-family detached homes for sale in Arlington is one-third lower than it was about 13 years ago.
A Red-Hot Market
Single-family home prices have risen dramatically in Arlington as inventory has diminished.
*Annual averages were calculated using a snapshot of active inventory at the end of each month in a given year. Source: Bright MLS
The pandemic also reshaped housing economics by driving up prices for building materials, just as it did for other goods. Manufacturing slowdowns during the worst of the contagion, combined with supply chain disruptions and labor shortages, all contributed to higher prices for homes, says architect Riddlemoser. “That’s what kicked construction prices higher, and they’ve never really come down,” she says.
DeFalco notes that the construction industry was hit extra hard by rising energy prices, which meant higher transportation costs to get materials to job sites, plus steeper costs for raw materials that are energy-intensive to produce, like cement and shingles. Shingle prices have risen 12% in each of the past four years, he says.
As people spent months working from home, many began renovating their homes to add space, creating acute demand for supplies and labor.
Why, in the face of these market constraints, have new homes in Arlington gotten so big? Industry observers say buyer demand for more square footage, combined with high land costs, has made smaller homes less profitable. When the land alone is worth $1 million, putting up a $1.2 million home doesn’t pencil out.
Arlington’s proximity to D.C. and limited supply of undeveloped land drives up lot prices, explains DeFalco, who has been designing homes in the area for 31 years.
Hackmann says Arlington’s smaller lots are also more complicated and expensive to build on because of ancillary costs like finding space for a dumpster and storing dirt offsite during construction.
“Builders have had a hard time,” Riddlemoser says. “Land values, even for teardowns, have risen in price so high that they have to build bigger to make their margins. The houses that used to be $2 million are now $3 million. They have to build bigger on smaller lots to make money.”
At the same time, she says, “More and more people are like, ‘I cannot afford the kinds of new builds that are going up.’ ”
Larger new homes can be unpopular with neighbors. Mark Riley, a 30-year resident of Arlington Forest, says the house under construction next door to his is so ugly that he refers to it as the “Branch Davidian compound.”
Occupying a corner lot, the new home is three times the size of the 1,300-square-foot house Riley shares with his wife, Susie O’Brien. One of its street-facing facades has no windows on the first floor, he says.
Aesthetic complaints aside, Riley worries about giant houses displacing longtime Arlington residents who can no longer afford the neighborhoods they’ve lived in for years. He bristles at the idea that folks like him who stay put will have to live in the shadow of towering dwellings on tiny lots.
“The prices keep going up and up and up, and there’s no end in sight,” says the retired former regional director of the Child Welfare League of America. (Locals also know Riley as the former “chief turkey” of the annual Arlington Turkey Trot.) “I was pissed to have that monstrosity next door to me, especially when I realized that it was simply another opportunity for a developer/builder to flip a property next to me to make a big buck.”
He’d like to see more county protections for property owners who suddenly find themselves shoehorned between larger homes. “We need to figure out ways where the community has an opportunity to weigh in before they get screwed,” he says. “We’ve got to get a constituency whereby we can actually sit down and communicate with each other without throwing [stuff.]”
Riddlemoser offers a more tempered assessment of the dynamics at play. Not everyone wants an 8,000-square-foot home, she says. But when builders have to pay $1 million for a lot, then fork over more cash to tear down the existing home, erect the new one and fund carrying costs until the new home is built and sold, bigger homes with bigger price tags make more financial sense. Not to mention the investment builders have to make in mandated stormwater management features like permeable driveways and dry wells.
Builders of large homes claim they are also doing so to accommodate the features on their clients’ wish lists. Most luxury buyers in Arlington want three or four bedrooms upstairs, Hackmann says, and at least 4,000 to 5,000 square feet of living space, including a basement. They want top-line finishes such as hardwood floors, natural stone and designer tile. “And good luck trying to sell a house in Arlington with vinyl siding,” he says. Buyers have come to expect fiber-cement siding, which can cost 50% more than vinyl, and wooden windows with aluminum cladding.
But value is also part of the calculation. Kitchens and bathrooms are the priciest parts of a house to build, Hackmann explains, so spreading the costs of those areas over a smaller footprint results in a higher price per square foot. That makes a 3,500-square-foot new home more difficult to sell than one spanning 6,000 square feet.
Moore concurs. He says some clients come into the conversation thinking they want a smaller house, but they back off from that position when they learn that the cost to build smaller is $400 per square foot, versus $300 per square foot for a larger home. Concerns about resale value, financing and recouping their investment come into play. A buyer who needs a mortgage will need the appraisal (which is based on future value) to be high enough to qualify for the loan.
GMU’s Clower believes local home prices may rise even higher as federal workers are ordered to return to the office en masse.
“There are a whole lot more people who want homes in Arlington than [there are] homes available,” he says.
Although no one expects Arlington’s housing market to cool off any time soon, builders say clarity on the county’s zoning and rules could ease prices by making building timelines less of a wildcard.“I think they could be more transparent in their processes to make it easier,” Hackmann says.
Moore would like to see the county increase the capacity of its municipal sewer system to handle more runoff so that the onus isn’t on homeowners. This model would have property owners paying a one-time fee (in the range of $30,000, he says) to connect to the county system, but they wouldn’t be responsible for maintaining drainage systems on their properties.
“It would be a much, much more efficient system,” he contends.
Winquist, the county’s stormwater spokesperson, says that model might make sense if you were developing a new community from scratch, but Arlington is already built up. “It’s a challenge to overlay sufficient water quality treatment when you already have all this existing development,” she argues.
Even if the county increases its sewer capacity, Papacosma adds, water could end up flooding neighbors’ properties before it flows into the sewer. And Arlington doesn’t have the space to expand its sewers by much. Capacity upgrades are already in the works, and increasingly heavy rainfalls spurred by climate change threaten to overwhelm the system.
At the very least, builders would like to see process improvements on the permitting front to prevent long waits for plan reviews and inspections. “The analogy I use is, I don’t mind paying the toll. I mind waiting 20 minutes to pay the toll,” Moore says. “We’re not making more land. There’s no prospect for this getting any better in the near term.”
Is there a place for smaller homes in Arlington’s housing landscape? Riddlemoser thinks so. “Well thought-out and charming is just as good,” she says, noting that many homeowners are coming to her for architectural consultations, hoping that a “smaller” remodel that expands a house to, say, 5,000 square feet will be more affordable than the new builds they see for sale.
DeFalco says he finds it refreshing whenever smaller houses land on his drafting table—like the 1930s Falls Church home he recently redesigned for an empty nester couple. The gut remodel, completed in partnership with TW Homes, completely refigured the floor plan without increasing the home’s size.
“The entire house is 1,700 square feet on one floor,” he says. “The clients said, ‘We have enough footprint, but we hate the way it flows, the floors are sagging and it’s not our style.’ They wanted a mid-century look. Sometimes the smaller homes present more of a design challenge. They’re more interesting.”
When Michael Chaleff married Elaine Clark in 2022 and moved into her three-bedroom Cape Cod in Alcova Heights, the couple quickly realized the 1,146-square-foot bungalow wasn’t large enough for their combined household of four. But buying something bigger was beyond their budget.
Pivoting to a whole-house renovation, they hired DeFalco’s architecture firm and Hackmann’s team at Alair Homes to rethink their living spaces for improved looks and functionality (including raising the low and uneven basement ceilings where Chaleff, who is 6-foot-2, was banging his head).
Their wish list included expanding the kitchen into a large family gathering space, creating a bathroom that Clark’s two kids could share, and converting the home’s attic into a primary bedroom suite. The initial scope of work also included adding a bathroom to Chaleff’s basement home office so the lower level could double as a guest suite.
Then they realized the remodel was only financially feasible if they could avoid the delays and extra expense of meeting Arlington’s stormwater regulations. “It added barriers that limited our choices,” Chaleff recalls.
They scrapped the basement bathroom, which would have tipped the amount of land disturbance on their 8,100-square-foot lot over 2,500 square feet, triggering a host of additional costs and permitting requirements.
Steering clear of the stormwater mandates also assured a more efficient and predictable timeline. The entire renovation took eight months.
All told, Chaleff says, the only unanticipated costs included a requirement that they erect a fence to cordon off the area workers were allowed to enter. They had to pay to repair that fence when a neighbor’s tree fell on it, and again when a construction vehicle knocked it over.
Completed in February 2024, the renovation doubled the size of their house to 2,736 square feet—still modest by Arlington standards—with thoughtful touches such as hardwood floors, built-in shelving, a generous kitchen island and a small porch off the master bedroom (see page 59) where Chaleff now enjoys an occasional cigar.
“They didn’t want to make it big,” DeFalco says. “They wanted to be comfortable with the cost.”
Tamara Lytle is a freelance writer in Northern Virginia covering politics, business and other topics.