by Alex Dadok

With Virginia’s election behind us, there’s a sense among some of wanting to find common ground. Those from all political persuasions share an interest in creating additional jobs and economic development for Virginia’s communities.

Community development — such as quality childcare, housing, healthcare, education, parks and amenities, transportation, and more — can support these economic development efforts in real and concrete ways. When a community is functioning at a high level to provide services and make itself an attractive place to live, work, and play, it’s easier to attract businesses. Community development partnerships, including the coalitions and dedicated public-interested leaders working in these areas, often make that quality of life possible.

Yet, for when many regional leaders think about economic development, community development is an afterthought. That’s a counterproductive posture.

Let’s look at a few examples of how community development partnerships affect economic development and will continue to affect economic development in Virginia. Then, we will turn to discuss the interplay between community development partnerships and economic development efforts and consider how these two dynamics might best reinforce each other.

Childcare and Economic Development: Driven by a lack of physical spaces and a critical shortage of early educators, a recent report by the Virginia Business Roundtable on Early Education discussed how childcare shortages are limiting economic growth. The report found that for Virginia to advance its early education system and maintain its competitive business environment, stakeholders need to work together to combine spaces, teachers, funding, and policies that support childcare providers. Community partnerships offer a powerful solution to this crisis.

A case study in in Southwest Virginia stands as an innovative example, where large employers and community stakeholders collaborated to renovate an unused big box store, combining corporate funding with state and federal resources to create a facility that can accommodate over 300 children. A focus on childcare and its close connection to economic competitiveness is unlikely to disappear once the newly elected leaders take office in January.

Housing and Economic Development: Housing has become a major barrier to workforce development and economic development nationwide. A recent report by Virginia economic development leadership highlighted the importance to Virginia’s business climate. To strengthen the connection between economic development and housing statewide, Governor Glenn Youngkin last year directed a Memorandum of Understanding between the Virginia Economic Development Partnership, the Department of Housing and Community Development and Virginia Housing. This collaboration intended to “integrate housing plans into the Virginia Business Ready Sites Program by requiring… housing plan[s]to match the job potential of each site.” This official state endorsement of the importance of community development for economic development success, and statewide order, is unlikely to be reversed in the incoming Spanberger Administration.

Additionally, in late 2024 Governor Youngkin unveiled Virginia’s Workforce Housing Investment Program. This program awarded housing funding to localities within a 30-minute drive of new or expanding businesses with a qualified job announcement. Across the Commonwealth, over $16.9 million was awarded to help create 740 housing units in 10 localities. Notable examples include Peanut Crossing in Suffolk, where a historic peanut processing plant is being converted into rental units for the local workforce.

These efforts are important also in Virginia’s smaller, less advantaged communities. In Southside and Southwest Virginia, SERCAP, Inc, a community development nonprofit, has been partnering with local governments to support housing and neighborhood revitalization and administrative support for those communities’ Community Development Block Grants. In Brodnax, a project will include rehabilitation or substantial reconstruction of ten residences. In a smaller community, this makes a difference for local workforce availability.  This work allows SERCAP to support its ongoing community partnership work and local communities to improve their competitiveness.

Maternal Health, Child Delivery and Economic Development: A troubling but understandable story where community development partnerships were able to provide real value but ultimately could not overcome economic and macro policy changes is playing out in central Virginia. It may cause major employers seeking to employ young families at the prime of their working life think twice about locating or expanding: Centra Southside Community Hospital in Farmville will close end labor and delivery services by the end of 2025. With tightening healthcare spending for rural hospitals, communities must adjust. Recent news coverage has focused on the families that will not receive this care or be able to give birth in the same place where generations of their family have been born. Yet Farmville’s ability to attract larger companies with employee families wanting to access this care may also be an effect. While the hospital closure had been delayed for years because nurse midwives had partnered with the hospital to provide more cost-effective non-physician provider alternatives, ultimately, because of the dearth of doctors available to oversee labor and delivery, the policy changes were too great to overcome.

Best Practices for Community Development to Support Economic Development

A major challenge for economic development efforts securing the full benefits of community development is the way the two areas have historically interacted. The economic development leadership in many communities has historically seen community development as a nice to have but not an essential. They may be understandably focused on selection, incentives, utilities, permitting, and workforce availability. If the community development is not tied to an actual construction necessity like enough wastewater capacity or transportation, then it is not necessarily an economic development priority.

The result is that items like childcare, schools, housing, parks, mental health services, and others lag in a growing area. If this growth does not happen in tandem, local government leadership will find themselves in a challenging situation long term, where growth will eventually be constricted. A helpful metaphor for this dynamic may the following: Let’s say you’re Queen or King in your castle, and you hear reports of an invading army many days away from you. It might be tempting to put off preparations, after all you have many days, but that army is on its way and the preparations take a long time to set up. This is the situation for community development—long lead times are a standard, and successful leadership requires long-term thinking.

To be sure, dedicated public servants and public-interested leaders are thinking about community development long term. However, often the community development efforts and partnerships could be benefiting from additional economic development collaboration. Economic developers are often creative, have discretionary funding to facilitate new approaches, and have access to other resources, like political capital, that the community development sector may not have.

Despite the lack of resources in social services, community development leaders can succeed in funding themselves. In this challenging time in housing, childcare, healthcare and other services, the more productive collaborative approaches can recognize the value of community development to the long-term competitiveness of a region and its residents. As previously acknowledged by the state of Virginia in the Executive Order and Workforce Housing Investment Program, these areas benefit when tied together.

At bottom, best practices can be summed up as strategically aligning economic development and community development capacity. Economic development leaders in local government need not become experts in all things community development. Yet leadership, investment, partnerships to get that capacity going and aligned strategically could go a long way in building competitiveness and success. Post-election, the common ground of jobs and economic development may provide fertile opportunities for new partnerships that build on current efforts and make Virginians’ lives better.

Alex Dadok is former Executive VP of Advocacy and Communications at Fahe and is currently consulting at Alex Dadok Consulting.