A new housing study led by the Virginia Center for Housing Research at Virginia Tech has found a shortage of affordable housing throughout all regions of the state – and that Virginia needs to produce significant levels of new affordable housing to accommodate anticipated workforce growth.
“Urban, suburban, and rural areas are all affected,” said Mel Jones, research scientist at the Virginia Center for Housing Research. “Statewide, one in three households is cost burdened, spending more than 30 percent of income for housing. But it may surprise some that in 2015, affordable housing problems were most acute, not in Northern Virginia or Richmond, but in Hampton Roads, where the level of poverty is high, wages are low, and high costs of housing are compounded by high transportation costs.”
The independent analysis, Addressing the Impact of Housing for Virginia’s Economy, was commissioned by the Housing Policy Advisory Council, established by Gov. Terry McAuliffe under Executive Order 32 to help guide the development and implementation of Virginia’s housing policy. The researchers were charged with identifying links between housing, economic development, and community development.
Faculty from the College of Architecture and Urban Studies, including Jones; Andrew McCoy, director of the center, head of the Department of Building Construction, and associate director of the Myers-Lawson School of Construction; and Tom Sanchez, professor and chair of the Urban Affairs and Planning program in the School of Public and International Affairs, led the study overall and were responsible for the analysis related to housing supply and demand – particularly housing affordability and production.
“Projections show that Virginia can add 357,800 net new jobs over the next 10 years if affordable and appropriate housing is available for potential employees,” said McCoy. “The findings point to a critical need for Virginia to produce substantial new, affordable housing to meet the needs of expected workforce growth.”
“Overall, the report establishes the importance of affordable, appropriate housing to individuals, families, communities, and the state,” Jones said. “Housing cannot be an afterthought; it must be central to any community or economic development efforts.”
The three other universities collaborating on the report were the College of William and Mary, George Mason University, and Virginia Commonwealth University.
“I appreciate the collaborative efforts of so many Virginia housing researchers and stakeholders who identified the specific statewide and regional connections between housing affordability, economic, and workforce development, transportation, education, and health,” McAuliffe said when he released the report at the recent Governor’s Housing Conference in front of 800 stakeholders, including housing providers, housing finance representatives, community and economic developers, and research institutions.
Other key findings in the report include:
- Failure to adequately address affordable housing needs has significantly affected key priorities of state policy, including economic and workforce development, transportation, education, and health.
- The homebuilding industry – both nationally and in Virginia – faces major challenges in meeting affordable housing needs for reasons that include shortage of developable residential sites and high land costs near major employment areas; constraints on construction labor, especially in skilled trades; and limited means for reducing rapid increases in development costs.
- Virginia can no longer rely on federal housing appropriations. Fiscal stress is expected to increase, reducing federal housing expenditures even further and increasing responsibility of the state to provide affordable housing.
The study recommends proactive and decisive planning and policy that supports workforce housing and embracing technology that will make housing a competitive advantage for the state. It also suggests that training and educating people in the residential housing industry is the best way to introduce changes needed in the industry.
“States and places that are willing to take this kind of action will be increasingly attractive to both workers and businesses and, ultimately, strengthen the economy,” said McCoy.
Jones and McCoy presented the study to legislators at the Virginia Housing Commission last week. Find the full report here.