Connecting housing and economic development

BRIAN DEPEW, Executive Director, Center for Rural Affairs

The Center for Rural Affairs has long focused on strategies to support economic vitality for small communities. Our work to assist small businesses, develop value-added agriculture and improve policy, all focus on creating widespread opportunity for people who live in rural areas.

Increasingly, we see small town housing as an economic development issue. While adequate and affordable housing is a quality of life issue, it also plays an important role in economic development. A lack of local housing can undercut successful business startup or business growth strategies.

Small towns often have less available housing stock than larger towns. The smaller the place, the larger the challenge. A shortage of appropriate housing leads to the loss of economic development opportunities.

When a business is growing in a small town, this growth may be constrained by workforce shortfalls because employees cannot find nearby housing. In the most pernicious instances, business growth is curtailed or businesses relocate to or invest in expansion in larger communities where housing is a lesser issue.

Aging housing stock, misalignment between available housing and market needs and affordability all have the potential to become a drag on small town economic vitality.

Understanding that housing and local economic vitality are linked can help focus local and state efforts on the housing challenges rural communities face. The solutions are multifaceted and could include local and nonprofit developers, housing rehab or engaging local businesses.

In addition to these ideas, financing for both developers and individuals, innovative approaches to materials, multifamily housing, smaller square foot options, increased direct government investment and changes in public policy all offer promise.

For local economic development to succeed, communities need housing stock that is adequate for market expectations and affordable to local residents.