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Regional Matters

June 16, 2022

Rural Spotlight: Creating a Reservoir of Housing Resources in New River Valley

Rural Spotlight Series

This post is part of our Rural Spotlight series, where we explore solutions to the economic challenges faced by rural communities in the Fifth District.

Introduction

Rural communities across the nation face workforce housing shortages. Here, we define “workforce housing” as housing affordable to households earning less than 120 percent of the area median income. While the reasons behind these shortages vary from one jurisdiction to another, the effects are the same: many residents face high housing costs.

Throughout the rural Fifth District, both the ownership and rental markets are tight for low- and middle-income households. Compared to households with higher incomes, a larger share of low- and middle-income households rent, but in many communities, there are not enough affordable rental units. Additionally, the months’ supply of housing affordable to low- and middle-income households has been declining since 2015.

While urban areas also face workforce housing challenges, housing policymakers in rural areas face unique constraints to expanding housing opportunities. For example, steep topography in West Virginia, western Virginia, and western North Carolina is expensive to grade, which drives up development costs; other communities do not have a local construction workforce, so the cost of bringing in construction workers is relatively costly.

Yet, rural communities can also draw on local assets, such as intermediary organizations experienced with bringing resources into the communities they serve to creatively address a community issue. This Rural Spotlight explores the New River Valley Regional Commission’s (NRVRC’s) approach to support housing policy and funding in the New River Valley (NRV) of southwest Virginia. The NRVRC story is an example of how an intermediary organization can help elevate attention on workforce housing as a regional problem that requires regional solutions. This strategy allowed multiple jurisdictions to pool their resources to the benefit of all component communities in the long run. 

NRV Background

The NRV is located in southwest Virginia in the Blue Ridge Mountains and consists of four counties (Giles, Montgomery, Floyd, and Pulaski), the City of Radford, and 10 towns. There are three higher education institutions in the NRV: Virginia Tech, Radford University, and New River Community College. While the NRV is rural, Blacksburg, Virginia, home to Virginia Tech, has an urban feel because of the large student and employee population.

map virginia

The NRVRC is a regional development organization serving the NRV. It was established in 1969 and is composed of 13 local governments and the three higher education institutions in the area. Representatives from all participating governments and organizations meet regularly to discuss and resolve regional issues pertaining to community and economic development, housing, transportation, and natural resource management.

Virginia Tech is an anchor institution in the NRV, meaning it is a well-established local organization, which contributes substantially to the surrounding community. It is the region’s largest employer, with around 200 companies located nearby at the Virginia Tech Corporate Research Center. It follows that the largest share of jobs in both the public and private sector in the NRV are in the education sector (20 percent), followed by the manufacturing sector (18 percent), and health care and social assistance (12 percent). (See the Appendix for additional demographic and economic data for the region.)

Due in part to the draw of its rich local amenities, such as outdoor recreation and high-quality employment opportunities, both the rental and ownership housing markets in the NRV tend to be relatively tight. Rental housing is predominately centered on Blacksburg for serving student populations, and many landlords rent on a July-June lease cycle; this makes it difficult for renters to lease apartments in other months. At the same time, the ownership market throughout the NRV has been tightening since 2010: The median number of days that homes are listed on the market declined from 83 in 2010 to nine in 2019.

Since 2019, the ownership housing market has only tightened further. With more companies allowing for fully remote work and given how well connected the NRV is to broadband (82 percent of households have broadband access versus 74 percent of other rural counties in Virginia), NRV communities have seen an inflow of prospective buyers from more urban areas. Housing professionals in the area have seen a significant increase in home values, low housing stock for sale, and intense competition among buyers. Similar to hot urban markets, homebuyers that require financing have been at a disadvantage to competitors who are able to pay for homes in cash.

According to the NRVRC’s Director of Housing Jennifer Wilsie, “Our prices aren’t as high as some urban areas, but low stock has caused a huge increase in home values, with buyers scrambling to find ways to purchase homes.”

NRVRC Housing Interventions

Dating back to 2007, the NRVRC observed a range of housing needs within the region, from homelessness to a lack of affordable housing inventory. In response, the NRVRC created the NRV HOME Consortium in partnership with the Town of Blacksburg to develop affordable rental and ownership housing units for NRV residents earning less than 80 percent of the area median income. Annual funding from the U.S. Department of Housing and Urban Development supports its work, and its success in solving local and regional affordable housing woes is rooted in the ability to successfully leverage additional federal, state, and local dollars to fund projects. The HOME Consortium has helped create 359 homes in 15 years by leveraging $38 million in additional funds.

While administering the HOME Consortium, the NRVRC continued to convene regular meetings with their component jurisdictions to provide a platform for localities to share housing market-related concerns for both subsidized and market-rate housing. Through the course of their discussions, multiple localities indicated a need for housing market data to inform how local housing policy could address the issues they observed. According to Jennifer Wilsie, “If you hear a similar question from multiple localities, you start to wonder if there’s a thread to look at regionally.” The NRVRC started exploring opportunities to respond to this regional and local research need.

In 2018, the NRVRC secured grant funding from Virginia Housing — Virginia’s state housing authority — to conduct a regional and local housing study and policy analysis in partnership with the Virginia Center for Housing Research at Virginia Tech (VCHR) and HousingForward Virginia. This multiyear endeavor was made possible by the consistent and willful engagement of local governments, nonprofits, lenders, bankers, realtors, and housing service providers. It included data collected from focus groups and over 1,100 online community survey responses.

The power of partnership rang throughout. The VCHR conducted research using regional data and offered training to community leaders who wanted to learn how to interpret the data. This would be the first time Virginia Tech leveraged its housing research expertise in the surrounding community. The NRV Association of Realtors also provided 20 years of regional multiple listing service data to provide insight into housing market trends, such as home sales prices. Each of these contributions were essential to informing HousingForward Virginia’s recommendations for regional and local housing strategies.

The results were a comprehensive regional housing study, seven common regional strategies, and multiple complementary local strategies. The NRVRC and HousingForward Virginia distinguished between regional and local strategies, according to Jennifer Wilsie, by asking two questions: “Is this a topic that touches all of our localities? And is this a strategy that needs a collaborative approach to be successful?” If the answer to both questions was yes, the strategy would be best suited to a regional approach. In conversations coordinated by the NRVRC, HousingForward Virginia also developed local strategies by listening to localities discuss their unique housing challenges. For example, partnering with anchor institutions or growing a building construction workforce are best done at a regional level, whereas assessing vacant parcels for housing infill development is best addressed at a local level.

Reflecting on HousingForward Virginia’s involvement in developing local and regional housing strategies for the NRVRC, Jonathan Knopf, executive director of programs for HousingForward Virginia, shared that he believes NRVRC is a “really good model for how to rally a region together around housing and get local governments thinking about working with each other and not competing with each other.”

What’s Next for NRVRC?

Recently awarded a $2 million grant from Virginia Housing, the NRVRC is now pursuing the creation of a multijurisdictional Housing Trust Fund. The NRVRC hopes to use this seed money as an incentive for institutions, businesses, governments, and philanthropic organizations to participate in the initial planning and/or funding of the Housing Trust Fund. The advantage of having local dollars in the fund is the flexibility it provides in how and where funds are spent. Jennifer Wilsie says the value proposition is straightforward: “If you really believe that housing is an issue, why don’t you join this process, invest financially, and lend your influence so we can decide together how to address housing needs in our community.” 

Appendix

The following section includes demographic and economic data for the New River Valley (Floyd County, Giles County, Montgomery County, Pulaski County, and Radford City)

Demographic and Education Statistics

GeographyTotal Population

% of Population Age 25-64

 % of Population (25-64) with High School Diploma or Higher

% Population (25-64with Bachelor's Degree or Higher 

 Floyd County 15,76651.1  94.1 25.2
 Giles County16,760 51.0 92.3 21.9
 Montgomery County98,495 44.494.8 48.4 
Pulaski County 34,11352.4 91.9 19.5 
 Radford City17,833 37.5 93.5 45.3 
Virginia 8,509,358 53.1 91.7 41.4 
United States 326,569,31252.2 89.5 34.4 

Sources: American Community Survey 2020 5-Year Estimates; author’s calculations.

Employment Statistics

Geography

Employment to Population Ratio (25-64)

Labor Force Participation Rate (25-64)

Unemployment Rate, December 2020

Unemployment Rate, December 2021 

 Floyd County 73.963.7 3.5 2.0
 Giles County73.759.1 3.9 2.3
 Montgomery County75.1 60.63.2 2.0 
Pulaski County 69.757.4 4.9 2.5 
 Radford City70.055.7 4.5 2.4
Virginia 75.663.25.03.3
United States 74.462.26.7 3.9

Sources: American Community Survey 2020 5-Year Estimates; U.S. Bureau of Labor Statistics Local Area Unemployment Statistics; author's calculations.

Note: December unemployment rates are not seasonally adjusted.

Interested in reading more articles like this one? Check out Our Regional Focus, where you can find additional research and analysis on rural communities, education, labor force participation, and other pressing economic issues that affect our communities.
 

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