Business Leaders Review Economic Fear from Housing Shortages

Business Leaders Review Economic Fear from Housing Shortages

Before he first heard of the sweeping report detailing Loudoun’s projected future housing shortage, Todd Pearson says he’s already seen the economic impact on a county without enough homes. A vice president at regional real estate giant B.F. Saul, Pearson says Loudoun companies are struggling to fill jobs because they can’t find a local workforce. Pearson added that Ford’s Fish Shack delayed the opening of it’s third and newest location in Lansdowne, and cut its workforce by 30 employees, in part because it couldn’t find enough workers within the county who could afford to live here. Pearson said more and more companies are prioritizing workforce availability ahead of location or income demographics when looking to expand.

“Housing is the lifeblood of economic development,” Pearson said at a Loudoun Chamber of Commerce forum May 3. “It’s critical that we make sure we have a workforce that attracts business and allows us to facilitate growth.”

The chamber forum was the latest discussion on county growth and workforce accommodations since the January release of the report by housing analysis firm Lisa Sturtevant & Associates in collaboration with George Mason University. The wide-ranging projection says the county’s growing economy will produce demand for around 18,000 total new housing units than the county has planned for by 2040. The county has prepared itself for a surplus of multifamily apartment-style homes, but falls short of projected demand for more than 30,000 townhomes and single family homes. Loudoun is expected to continue as a national leader in attracting employees in high-wage, technology-based industries like cyber security and data analytics and those employees and for generations sought out larger, single-family homes, a trend the report expects to continue.

This will further hurt affordable housing. Loudoun’s average household income is approximately $110,000 annually, nearly double the national average. Even in one of the country’s richest jurisdictions, 30 percent of residents are cost burdened, meaning they pay more than 30 percent of their monthly income in housing costs. That includes around 50 percent of the county’s renters and 70 percent of Loudoun households earning less than $70,000 annually. With housing availability dwindling, prices will continue to rise.

Like the rest of the region’s jurisdictions, Loudoun is working to create more affordable housing units, but has only provided 2,400 in about 30 years, said Wendy Hill President, Kim Hart. The county’s foremost voice in affordable housing issues, Hart said a recent affordable housing development in Brambleton quickly filled up, with almost all of the nearly 100 units going to residents working full time teaching, in construction or in service industry jobs. Hart said 10,000 more units are already needed, and without further housing assistance, many more of the county’s nursing and public safety workers will be forced to live increasingly further away from the communities they serve. Already around 50 percent of all Loudoun workers live outside the county.

The projected housing shortage comes as the county works through a comprehensive review of its master zoning and land use plans.  The shortage shines a light on a potential problem few in Loudoun are eager to deal with. The county’s road infrastructure is just now catching up from a decade of growth that made Loudoun one of the fastest growing jurisdictions in the country. At the same time, many Loudoun residents and stakeholders are concerned about the 60,000 new homes slated for construction, the corresponding population increase and overall burdens on county services.

Many government and business leaders are skeptical of the bleak image portrayed in the report. Some point out that the report doesn’t take a constrained approach for land use policies and alreay-approved developments.  Instead, it shows an unconstrained approach, meaning it doesn’t consider anything beyond economic factors.

Chief among those is the upcoming Metrorail expansion, which is expected to pave the path for thousands of new homes in a wave of unprecedented development for the county. Urban-styled dwellings like those proposed around the county’s incoming Metro stations naturally tie in to a massive shift in housing preference toward walkable, mixed-used, all-inclusive developments.

This goes against the report’s projections of continued high demand for single family homes. Along with developments like One Loudoun and the Village at Leesburg, business leaders say these developments, which the county is already promoting, will anchor future housing growth. Loudoun Economic Development Executive Director Buddy Rizer said every major potential employer looking to come to the county already wants to be close to one of these development types.

But mixed-use developments are not in of themselves panaceas. Speaking at the forum, Rizer said while these developments help, new, diverse and varied housing types are still needed to attract employees going forward.

“There does reach a point where growth just stops, and you can’t get the types of employees you need,” Rizer said.

Speaking on behalf of her report and its relationships with national growth trends, Sturtevant warned that the whole Washington D.C. region is facing similar ominous consequences of its developments as other fast growing, high tech areas like Austin, Texas and California’s Bay Area. While some jobs are leaving cities like San Francisco, the skyrocketing cost of living continues to hurt the quality of life for many remaining workers, particularly teachers and other public service employees. Increasingly, these workers can’t afford to live near jobs in the city, so they commute three hours or more home during the weekends and sleep on friends couches or live in their cars during the week.

“I would love to be able to say to you that there is irrefutable evidence that if you don’t build enough housing your economy is going to go in the tank,” Sturtevant said. “It’s more insidious than that… What I’ve been struck by is the trade offs I would have never imagined.”