How will federal cuts impact Virginia? A new GA committee will determine what’s what. What do we do in the meantime? (Part III)

Read Part I and Part II for the set-up.

Local conditions that may exacerbate the effects of federal cuts

Existing issues and challenges can exacerbate federal cuts. Think housing availability generally, older person housing availability, workforce housing availability, access to health services, and poverty.

Housing

It is fairly well understood that, with some exceptions, retirees have driven home sales across the Northern Neck over the past several decades. It is equally well understood that housing affordability and housing stock are challenges for middle- and lower-income individuals and families.

In 2024, Richmond Feds’ Regional Economist Joseph Mengedoth wrote Have Some Rural Areas Turned the Tide on Population Decline? In it, Mengedoth wrote that amenity-rich communities near the Chesapeake Bay are attractive to retirees and mentioned Northumberland County specifically. Years earlier, market and housing analysis firm czb stated that the Northern Neck, and particularly Northumberland County, are appealing as vacation home locations. In Housing Needs Study of the Northern Neck of Virginia (PDF) they write,

Second Home Buyers from Strong Equity-Rich Markets: Further, strong housing markets in Northern Virginia have propelled demand for vacation homes by residents able to extract home equity there into buying power on the Northern Neck. For these households, as is the case for a high percentage of retirees from outside the area, demand is for waterfront property, so Richmond County has experienced less pressure than the rest of the Northern Neck, and no part of the Northern Neck has experienced quite so much of this activity as waterfront properties in Northumberland County on the coastal side of Rt 360.

While the data in Northern Neck Home Sales by Year, 2016 to 2024, by County does not speak specifically to new resident/retiree housing purchases, it does tell us that home sales are up in all NNK counties since 2016.

Of course, the water and amenities also attracted younger people during the pandemic who left urban and suburban areas. This influx naturally increased prices of homes and land. Return to work requirements (both in- and outside government) and federal employment/firing actions may result in younger people, especially young families, moving back to to suburbia and urban centers for work since there are few in-person professional opportunities on the NNK, especially in Lancaster, Northumberland, and Richmond counties. It is as yet unclear about how this will affect the housing market and state and county revenue. It can be expected, though, that moves out of the Northern Neck will not ease pressure on lower-cost properties.

The focus in the market on high income earners and those with equity have created immense pressure on the lower end of the housing spectrum, leaving moderate and lower wage earners with few options. One choice is to spend more of their monthly income on housing. Another is to live in multi-generational housing or multi-family housing. Another is to live in an area with lower housing costs, or at least inland. Finally, another option is to live in what has been described by some as “less desireable” housing: Mobile and manufactured homes.

In Northern Neck and Middle Peninsula Housing Fact Sheet (PDF), Bay Aging reports that one in 10 homes on the NNK and MP are mobile homes, often referred to as single wides and double wides. Since 1976, when HUD (US Department of Housing and Urban Development) changed their housing policies, manufactured homes have replaced mobile homes as the affordable option versus stick built homes.

And while renting is the alternative to buying, Bay Aging points out that renting has become more unaffordable over time. The rental stock is small, allowing for landlords to drive market prices, and wages have not kept up with rents.

There is little doubt that the current federal cuts in spending, staffing, and contracting will have an impact on housing, whether it be a glut of housing as people leave the state or a reduction in earnings and tax revenue, to name only two. Future installments in this series will consider population and health conditions which will interact with federal actions and make better or worse, or keep the same, federal impact. Coming up in the next installment is population. Stay tuned.