by Morgan Sweeney
The Virginia Tobacco Region Revitalization Commission recently approved a pilot workforce housing program to make the region more attractive to new businesses and job seekers.
The commission was founded to foster economic growth and opportunity in 34 counties and six independent cities comprising Southwest and Southern Virginia – a region where tobacco farming was once integral to the economy. It’s funded entirely by proceeds from a major 1990s tobacco lawsuit settlement.
Today, Southwest and Southern Virginia have the lowest median incomes and highest unemployment rates in the commonwealth – though still within the “natural rate” of unemployment, according to Forbes, between 3 and 5% – according to statewide economic development initiative GO Virginia. They also struggle with holding onto population, and Virginia, like many other states across the country, is amid an affordable housing shortage, according to reports.
The commission is devoting $2 million to its Economic Development Workforce Housing Incentive Pilot Program in hopes it could be a partial solution to some of these challenges.
“Southwest Virginia faces difficulties when it comes to workforce housing due in part to aging housing. The region has the workforce and other assets it needs to succeed, and we must not let a shortage of housing stand in our way,” said Del. Will Morefield, R-Tazewell, commission vice-chair. “The pilot program provides a solution that will be critical to building our economy, and I look forward to playing an active role as it moves forward.”
The program is designed to incentivize localities to create more workforce housing but ideally in a public-private partnership with an employer. Commission localities can obtain funding if their housing development plans are tied to an economic development project, and if they’re willing to create a workforce housing plan that will “[meet] the needs of the incoming employer.”
The developments are meant to fill a void in the tobacco region market for middle-income affordable housing.
“We need to find solutions for the ‘missing middle,’ those who fall into the gap between affordable housing programs and the housing that many developers choose to build that, in today’s market, is often too expensive for working families,” said commission member Del. Danny Marshall, R-Danville.
The strongest proposals will involve employer contributions to development projects, whether that’s by savings or monthly housing payment matches, contributions to employee transportation options or direct investment into housing units.
The commission offers a maximum award of $1 million, with a maximum of $35,000 per unit. The program is the first of its kind for the commission.
“The commission has had a variety of incentive programs over the years, but this is our first program focused specifically on housing,” said Jordan Butler, a spokesman for the commission.
Butler told The Center Square at the end of July that the commission had received some “general interest” in the program and was “excited to see what comes in.”
Though the commission itself does not use state or local funds and is investing a relatively modest amount in the pilot, the program encourages the use of taxpayer dollars in these projects – something ardently free market strategists would oppose.
“While the commission is only deploying $2 million, it is suggesting that applicants find local, state, or federal matching funds and/or create a tax increment district. This can potentially have a multiplier effect that will involve the use of much more tax money,” Marc Joffe, a policy analyst with the libertarian Cato Institute.
As it is a pilot program, however, the commission plans to “learn from this process and evaluate the outcomes to inform the eventual development of more traditional, structured documents for application, project development, evaluation, and implementation.”
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Morgan Sweeney is a staff writer covering Virginia and Maryland for The Center Square. Morgan was an active member of the journalism program as an undergraduate at Hillsdale College and previously freelanced for The Center Square.
