Even in the face of rising inflation and uncertainty, the comeback story of the Southern Virginia economy continues to be written. Unemployment is at its lowest in twenty years. Major economic development project announcements keep coming. In many ways, our region’s economy is as strong as it has been in a long, long time. However, a new challenge is rising that threatens to stunt this growth and end the relatively low cost of living that residents of Southern Virginia enjoy. This challenge is housing, or rather, a lack of it.
A recent report by Chmura Economics titled “Housing as an Economic Development Strategy for Virginia,” commissioned by Virginia Housing, documents the challenge well. The Commonwealth is projected to add 140,000 net new jobs by 2033, and in many places, especially Southern and Southwest Virginia, there’s currently no good answer regarding the question of where all these people are going to live. Until we find these answers, we will increasingly face missed opportunities and higher housing costs.
Housing availability and affordability have traditionally been seen as outside the scope of economic development. As a result, our region’s business recruitment efforts focused on meeting the needs of businesses by providing adequate industrial sites, buildings, utilities and a trained workforce. That focus has paid off, and the jobs are now coming, but as they say, housing is where jobs go to sleep at night. The report from Virginia Housing makes it clear that in today’s hyper-competitive environment, economic development and housing are fundamentally linked.
All of this raises the question: What can we do about our housing shortage? The first step is to identify where we see the greatest need. It appears to me that, in order to provide the type of housing that our new workers will need, as well as our teachers, fire fighters and other public servants, we must focus on the “missing middle.” Affordable housing programs for those most in need abound, and plenty of developers seem more than willing to build the next McMansion; however, few seem interested in building affordable homes for working people. There are many reasons for this, from lower profits to higher costs of infrastructure, but there are also many solutions to this challenge.
I believe any meaningful fix to our current shortage of workforce housing will take a mix of public policy, targeted funding and private sector innovation. I also believe we need everyone at the table to solve this crisis; this includes not just the state’s housing community and developers, but also state and local governments, and especially those employers whose new workers we are all trying to house.
This is why I am proud to share that the Tobacco Region Revitalization Commission has launched the Economic Development Workforce Housing Incentive Pilot Program.
In short, this program seeks to utilize the energy around a major economic development announcement to engage state, local and private sector partners to work together to offer affordable workforce housing options that meet the needs of the community, employees and employers. The Commission has committed $2M for the first phase of this pilot with the hope that, by incentivizing new players to join the conversation on filling up that missing middle, we will make Southern and Southwest Virginia more compelling places for new businesses to locate or for existing ones to expand.
The basics of the program include a loan or grant for each new housing unit, provided that it will be affordable to a household with an income between 80-120% of the Area Median Income, that “missing middle.” However, what really makes this program unique is the requirement that any award must be tied to an economic development project within the Commission footprint. We want to harness the energy and excitement around a major economic development project to spur an innovative and meaningful solution aimed at addressing the new housing demand that the project itself will create. This could also include the employer directly participating in a housing solution, such as through a housing-payment match program for its workers, providing transportation to the development, or even directly investing in the project. My hope is that, over time, a new model for workforce housing will develop that allows us to better integrate workforce housing solutions into our economic development efforts, so that a lack of housing is never again an obstacle to growth.
I look forward to working with organizations already doing great work in the housing sector, like Virginia Housing, Virginia Department of Housing and Community Development, Housing Forward Virginia, and others, to solve our workforce housing problem and ensure that, when it comes to creating jobs, building communities, and making Southern and Southwest Virginia even better places to live and work, we have solutions that make the availability of high quality affordable housing an asset to our region.
Delegate Danny Marshall is a Republican member of the House of Delegates from Danville and a member of the Tobacco Region Revitalization Commission.
For further information please contact TRRC Public Relations Director Jordan Butler at (804) 894-9652 or JButler@revitalizeva.org. Information on this program, and all of the Commission’s offerings, can be found on the Commission’s website, www.revitalizeva.org.
