RD31 - Economic Growth and Stability in Urban Areas of the Commonwealth


Executive Summary:
During the past decade, Virginia experienced a prolonged period of economic growth that provided opportunities and prosperity for many citizens of the Commonwealth. Most of Virginia prospered during this period of economic expansion. However, some areas of the Commonwealth did not experience this growth and prosperity. Most of these areas continue to experience economic decline during the current, nationwide economic slowdown. A significant number of these economically stagnant areas are the once busy and prosperous urban communities of Virginia.

Dramatic economic changes during the last quarter century have altered the role of urban areas throughout the country. Generally, cities no longer serve as the sole centers of commercial and retail activity. Major shifts in housing construction, commercial activity and the relocation of middle class residents to the suburbs often have led to economic distress and deepened social and spatial polarization within urban areas. The problems of economically depressed inner city neighborhoods are among the consequences of these shifts.

Although the national trend has been toward an increase in the level of urban economic distress, many urban areas in Virginia have remained vital and dynamic economic centers. Some of Virginia's cities continue to serve as major financial districts and as centers for education, entertainment and cultural enrichment. Office construction and university expansion are major factors driving economic growth in several Virginia cities. However, other urban areas of the Commonwealth have not experienced such continued economic growth or stability. Some areas have seen little or no new investment or growth. Government programs designed to assist in economic growth often have not been used in these areas. One of the purposes of this report is to catalog state programs available to assist in fostering economic growth or stability in urban areas, particularly those economically distressed areas.

"One Virginia, One Future," Governor Warner's economic development strategy for Virginia, seeks as a goal to focus economic development efforts in the areas of greatest need to help reduce economic disparity and thereby increase the prosperity of all Virginians. This would include many of the urban areas and neighborhoods of the Commonwealth that have not prospered during recent years.

Many factors contribute to the economic well-being of a particular area. Education, housing, transportation, infrastructure, labor supply and quality of life indicators all lay the foundation for what will happen in the area of economic development in a particular region or locality. There is historically a strong connection between economic and community development. Economic development usually has occurred in communities that are able to support new development. Communities seeking to improve or even maintain their economic positions must assure that the labor force, housing, services and infrastructure would allow firms to compete successfully in the broader marketplace. Communities that have become responsive to the competitive needs of businesses have been able to attract investment and jobs. One of the goals specified in Governor Warner's One Virginia, One Future strategy is to "support development of more sites in urban cores for redevelopment and brownfields development in order to rehabilitate and reuse sites and buildings including for retail and mixed-use development." This strategy would help assure that urban areas are able to serve those economic prospects considering or seeking location or expansion in the city. Other efforts are focused on assisting areas to attract economic growth and investment. The programs available through state government that reinforce these local efforts are listed and described in this section of the report.