Can Housing Be a Tool for Economic Development?

The FWD #G27 • 642 Words

by Susan Dewey

A new Virginia Housing-commissioned study examines how housing is interacting with regional job markets in Virginia.

The availability of quality, affordable housing—a vital component of Virginia’s quality of life—has helped the Commonwealth build one of the most capable workforces and competitive business environments in the country. The ongoing national housing crisis has elevated the importance of housing in family and business location decisions.

To better understand these dynamics, Virginia Housing commissioned Chmura Economics & Analytics to conduct a study exploring the linkages between housing and economic development. The study identifies housing as an increasingly central factor in decisions businesses make around relocation, expansion, and formation. 

What is the role of housing in economic development?

The role of housing in local and regional economic competitiveness is critical right now, not just in the future. With the exceptions of Southside and the Middle Peninsula and Northern Neck regions, representatives in each GO Virginia region indicated housing affordability issues are impeding economic development efforts. However, Virginia’s diverse regions face unique challenges:

  • In the southern and western regions of the state (regions 1, 2, 3, and 8), workforce and business retention and recruitment are hampered by aging housing stock, unaffordable new construction, and competitive markets across state lines. 
  • In Central and Eastern Virginia, (regions 4, 5, and 6) high housing costs are pushing workers to the edges of the region and beyond. Companies are concerned about worker attraction and retention with long commutes and the erosion of cost-of-living advantages.
  • In the Piedmont and Northern Virginia regions (regions 7 and 9) land constraints are encouraging multifamily development to meet the needs of the area’s high wage workforce. Local workers cannot afford high-end construction.

What are other states and communities doing?

Across the country, there are several examples of efforts to integrate housing and economic development that could inform similar coordinated efforts in Virginia:

  • Recent efforts in Ohio connect regional employment growth projections with housing needs, aiming for one construction permit for every new job.
  • Georgia, Connecticut, Nebraska, and North Carolina have advocated for or committed funds to support workforce development housing, rural workforce housing, and rural neighborhood revitalization efforts.
  • State (California, Connecticut) and local (Durham, Atlanta) rezoning efforts have reduced barriers to development, increased housing density, and encouraged production of affordable units.
  • Repurposing underutilized structures—including vacant commercial buildings—can provide housing units where space is constrained.
  • Collaborations between large corporations and states (e.g., Apple and CalHFA) have produced creative financing mechanisms and new housing units.

Recommendations for Next Steps in Virginia

These recommendations represent a draft on which we are expanding with input from partners. Key recommendations include:

  • Expand housing availability and reduce barriers to housing production through:
    • Evolutions in state and local zoning and permitting policies, particularly around innovative solutions such as manufactured housing.
    • Supporting workforce development in residential construction through training programs that provide transferable skills.
    • Developing new financing options such as partnerships with regional employers on mortgage assistance.
  • Build on efforts positioning housing as a pillar for economic development by:
    • Working together with the Governor’s Administration to support economic competitiveness.
    • Aligning local, regional, and state economic development and housing planning efforts as well as resources.
  • Improve collaboration between planning agencies and stakeholders through:
    • Identifying, gathering, and making available transparent data on housing markets throughout Virginia.
    • Empowering regional approaches to regional issues through Planning District Commissions and GO Virginia regions.
  • Increase engagement with private employers by:
    • Encouraging public-private partnerships.
    • Promoting Virginia as a leader in housing innovation and attracting businesses that support innovation.

We invite you to read the study and share it. In many ways, the study confirms what we’ve known all along: housing is an integral part of economic development. Housing must be part of any economic development initiative for Virginia to grow, and Virginia Housing is here to help. For inquiries regarding the study itself, contact Fabrizio Fasulo, Director of Policy and Planning.


Susan Dewey has served as the Chief Executive Officer of Virginia Housing since 1999 and has been an ex officio member of HousingForward Virginia’s Board of Directors since our founding in 2003. She is retiring at the end of this year.

Like what you’re reading? Support the work that makes it happen.

The FWD brings you the latest developments in the world of affordable housing, ad-free. HousingForward needs your support to continue providing this valuable service.

Can’t find what you’re looking for?
Contact us for more info.