Category Archives: Land use & development

Local Governments’ Alarming Capital Spending Ratios

Reinvestment ratios for Virginia cities and counties have been declining in recent years. Source: Moody’s. (Click for larger image.)

I’ve been strenuously making the point over the past several months that there are many ways for state and local governments to run hidden deficits. One of those is deferred maintenance — an issue that has played out most prominently in the debate over aging, run-down school buildings. What I never realized is that there is a way to measure the extent to which local governments kick the maintenance can down the road. It turns out that we can track what Moody’s calls the “median capital asset reinvestment ratio.”

I cannot find an exact definition of this ratio, but, generally speaking, it expresses a local government’s capital investments as a ratio of its assets. A higher ratio indicates that local governments are spending more — building new buildings and infrastructure and/or renovating, retrofitting and otherwise updating older facilities. A lower ratio is a tip-off that a local government might be falling behind on repairs and maintenance.

The chart above shows that Virginia localities had healthy capital asset reinvestment ratios a decade ago, but those ratios have declined sharply in recent years — barely reaching replacement value for Virginia counties. As Moody’s writes in a recently issued report on the credit quality of Virginia localities:

The condition of capital assets has suffered from a lack of investment. Asset quality will likely improve if local governments make capital investment a priority. But funding will be a challenge, given the already above-average fixed-cost burdens many Virginia local governments carry.

A slowdown in capital investment is reflected in another statistic, the median age of capital assets.

Median age of capital assets, Virginia cities and counties. Source: Moody’s.

As this graph shows, the average age of Virginia’s capital assets is steadily and relentlessly increasing for both cities and counties. Needless to say, there is variability between jurisdictions. Some localities do a better job of maintaining the level of capital investment than others. The Richmond Public School System is noteworthy for doing a particularly poor job — keeping open more schools than justified by the number of students and scrimping on maintenance and repairs. But the problem goes far beyond the City of Richmond.

Growth Ponzi scheme. In past posts I have discussed Charles Marohn’s concept of the “growth Ponzi scheme,” a malady afflicting fast-growth counties. Under the logic of the growth Ponzi scheme, counties encourage inefficient growth (low-density, autocentric, segregated land uses in contrast to walkable, mixed-use projects) to get a quick hit of revenue from new development. Typically, developers pay for their own roads, water and sewer, plus proffers and impact fees, and then turn the assets over to counties for maintenance, so counties have only modest up-front costs. After 20 or 30 years, however, the assets need replacing and aging and tax-inefficient projects now cost more than they reap in revenue. Counties have kept the system going by soliciting more growth.

Eventually, the Ponzi scheme sputters and stalls. Counties run out of new land to develop. Recessions put an end to growth. We can see this happening in the top chart. In the go-go days of the early 2000s (not seen on the chart) and even in the recession, Virginia counties dedicated considerably more to capital investment than did cities. They built a vast, costly infrastructure of roads, utilities and other public amenities. Since then, maintenance has consumed an increasing share of capital spending. Absolute levels of capital spending may look robust compared to past levels, but as a ratio of assets, they’re not.

If you think Richmond Public School buildings are a blight, just wait twenty years and see what happens to the infrastructure quality of Virginia counties as they continue to under-invest in capital spending.

Essential ratios. There are undoubtedly complexities and nuances to the capital spending I’ve discussed here. And a general statement that applies to one locality may not apply to another. But these ratios are critical to evaluating the fiscal health of local government. Every city and county manager should have these ratios at their fingertips. Every council and board member should know them by heart. If they don’t, they have no idea what they’re doing, and they should be booted out of office.

Shoreline Resiliency Funds for Hampton Roads?

In 2016 former Governor Terry McAuliffe signed a bill that set up a revolving loan fund to help homeowners and businesses elevate their properties to safeguard against sea level rise. Just one problem, says the Virginian-Pilot. The fund has no dedicated revenue source. Two years later, “the well is dry.”

Now the Virginia Conservation Network is calling for the state to contribute $50 million to the Virginia Shoreline Resiliency Fund. “The coastal communities need help,” says Karen Forget with Lynnhaven River Now, a member of the environmental network. “This is a huge, really unprecedented, issue for the coastal communities all up and down the East Coast. We definitely need assistance.”

Virginia’s coastal tidewater region is highly vulnerable to flooding caused by land subsidence and a rising sea level. The inundations are increasing in frequency, and, according to some, will get worse as global warming intensifies and sea level rise accelerates. Even if you don’t buy the alarmist global-warming scenarios, there is no disputing that the sea level has been rising at a steady rate for more than a century and will continue to do so, or that land around Hampton Roads has been subsiding and will continue to do so. The flooding of coastal Virginia is one of the most predictable crises in history.

The million-dollar questions are (1) what should we do about it, and (2) who should pay for it? It’s not surprising that representatives from the Hampton Roads metro area are begging the state for money. Who can blame them? That’s what everyone does. And there is a case to be made that in a Commonwealth such as Virginia, we’re all in this together, and other regions should help out.

However, when Hampton Roads asks for $50 million, a not inconsiderable sum, the rest of the state need not write a blank check. Let’s face it, it will take a lot more than $50 million to adapt to rising sea levels — it will take billions of dollars — and we can safely say that this request for state funds will be only the first of many in the years ahead.

While inland Virginia has a moral obligation to help Coastal Virginia, the obligation is not an open-ended, no-strings-attached commitment. Coastal Virginia needs to take actions, which, at the very least, will stop increasing the region’s exposure to flooding. Ideally, the region should take steps to reduce its exposure to flooding. And that will mean curtailing coastal development.

Now, I’m a free-market kind of guy, and I think people should be able to build where they want to (as long as they don’t cause harm to others). So, if someone wants to build a $5 million house on the beachfront, be my guest. But I don’t believe people have no right to expect society to insulate them from the risks they’re taking by, say, subsidizing their hurricane and flood insurance. Nor do I believe that they have a right to insist that society provide infrastructure — flood-proof roads, water, sewer, electricity, etc. — at any cost to beachfront dwellers need to sustain themselves in the facing of rising waters and increase funds.

That $50 million revolving fund will be used to help people put their houses on stilts. That may be a reasonable use of the money (although I’d like to see the fine print). But it doesn’t come close to addressing the massive unfunded liability Coastal Virginia has created for itself. Inland Virginians should extend a hand of assistance to their brethren on the coast — and insist they get serious about reducing their liabilities.

Update: Today’s Washington Post headline: “The world has just over a decade to get climate change under control, U.N. scientists say.” Yeah, right. That’s what they said ten years ago…. and twenty years ago. Those of us who remember past doomsday prophecies have become inured. But you don’t have to believe in global climate catastrophe to acknowledge that flooding risks on the Virginia coastline are real and slowly but steadily getting worse.

Has City Population Growth Leveled Off?

Source: Demographics Research Group at UVa

After a decade of strong growth, the population of Virginia’s cities may be leveling off, says Hamilton Lombard with the University of Virginia’s Demographics Research Group. The rising cost of housing in Virginia cities is pushing households into neighboring counties, he says.

The major swing group is households with young children. For decades, families with young children moved from cities to counties in search of better schools. After the 2007 recession, Lombard contends on the StatChat blog, many families found it difficult to purchase a home, so they rented in cities where a larger share of the housing stock is rental homes. As a result, the share of children in city populations increased, leading to an unexpected surge in school enrollments in many cities. Over the past 10 years, cities accounted for seven of the 10 fastest-growing school divisions.

Lombard expects cities to hang on to their population gains, but he suggests that continued population growth will be difficult to maintain. The main problem is the difficulty of building new housing. In Virginia cities, vacancy rates are declining, and housing prices are increasing. Prior to the recession, for example, owner-occupied housing in both Charlottesville and Richmond was 27 percent cheaper than in surrounding counties. By 2016, housing was only 12 percent cheaper in Charlottesville and eight percent cheaper in Richmond.

Concludes Lombard:

In the coming years, home construction levels will need to increase for Virginia cities to continue growing at recent rates. Some cities, such as Richmond, have seen more home construction. But building new homes in cities can be difficult; most development in cities is infill which often requires more paperwork and faces more public opposition than greenfield developments.

If cities are not able to supply enough housing to meet demand, the recent trend of falling vacancy rates and rising home prices will likely continue, along with slower population growth.

Bacon’s bottom line: I concur with Lombard’s analysis. Cities have limited space for infill development, and established neighborhoods resist re-development at higher densities. There is a significant unmet demand for walkable urbanism found in the traditional neighborhoods of Virginia’s cities, both large and small, but people have to live somewhere and they will buy what they can afford, even if the surrounding amenities are not what they would prefer. I expect we will see “sprawl by default” — scattered, low-density, single-use development, not because it’s what the market demands but because that’s what counties zoned for in the go-go days of the early 2000s and that’s what’s in the supply pipeline.

Shocker: Positive Signs from Washington Metro

I have relentlessly criticized the Washington Metro system for years, but I have to give credit to management under General Manager Paul J. Wiedefeld for trying to steer the dysfunctional mass transit system in a fiscally sustainable direction. Today’s media reports highlight two straws in the wind.

First, the Washington Metropolitan Area Transit Authority (MWATA) is trying to revive a plan to redevelop portions of the Huntington Metro campus in Fairfax County, according to the Washington Business Journal. An effort to redevelop a 1.15-acre parcel failed four years ago. But Metro has expanded the project scope to 12 acres.

The selected developer for this larger project would not only design the 12-acre site but also help WMATA determine the need for replacement transit facilities — the three parking garages at Huntington Metro Station had a combined usage rate of 61 percent for fiscal year 2018. WMATA recently closed an 885-space garage on 6 acres located on the south side of the station, where it sees an opportunity for redevelopment if parking demand doesn’t merit replacing.

Heavy-rail transit stations significantly increase the value of adjacent properties. Mass transit systems in other countries employ “value capture” strategies to extract some of that increased value to defray the cost of building and operating their stations. For the most part, Washington’s Metro system has failed to do that. Rather, property owners reaped windfall gains from the public’s massive investment. (A partial exception is taxation of property owners in Tysons to pay for a modest portion of the cost of building the Silver Line extension.) However, Metro frequently did build parking structures around its stations, some of which may be severely under-utilized. The potential exists to redevelop that property in light of market conditions that favor dense, mixed-use development around Metro stations.

Although the WBJ doesn’t frame the story this way, it appears that Wiedefeld is trying to extract maximum value from the limited property Metro does own around the Huntington station. If this redevelopment project is successful, it might be a template for extracting value from other Metro parking lots and garages.

Second, Metro is looking at the potential for privatizing operations of the Silver Line extension encompassing six new stations in the high-tech corridor between Tysons and Dulles International Airport, and beyond. Reports the Washington Post:

On Tuesday, the transit agency issued a request for proposals from private companies willing to perform maintenance and operations on the line extension, which is under construction by the Metropolitan Washington Airports Authority. …

Metro has hinted for the past two years that its intention was to outsource the Silver Line service, suggesting that such a decision could save taxpayers millions of dollars in the long run. In January, the agency issued a “request for information” from potential contractors interested in the job.

Now, Metro says that hiring a private company to fill new Silver Line jobs, rather than adding to the ranks of unionized employees, will help control operating and maintenance costs, “including future pension costs, which have grown to unsustainable levels.”

Paul J. Wiedefeld

Wiedefeld said the effort is intended to help the transit agency start “living within our means.” “Competitive contracting is one tool to hold down pension cost growth, while providing quality service for customers.” Laughably, Amalgamated Transit Union Local 689 responded that outsourcing services would result in poor service for riders and subpar maintenance of infrastructure. Worse than the service and maintenance provided by the union workforce? That would be something!

Virginia has boosted its financial commitment to Metro to reduce a massive capital spending shortfall on the understanding that the mass transit authority would undertake meaningful reforms. Wiedefeld is making an honest effort to deliver on that promise, pursuing strategies that were never part of Metro’s past playbook. Whether he succeeds or not is a different question — that depends in large measure upon market conditions and cooperation from Metro’s labor unions. But he’s giving it his best shot.

Bacon Bits: In with the New, Out with the Old

In with the new…

Data Center Alley too hot to handle. The Metropolitan Washington Airports Authority (MWAA) has sold 424 acres west of Dulles International Airport to data-center developer Digital Realty Trust for an eye-popping $236.5 million — $558,000 per acre. MWAA will place $207 million in a segregated account used to reduce costs that airlines pay to do business at the airport. The transaction expands the large and growing data-center presence of Digital Realty in Loudoun County, reports the Washington Business Journal.

Virginia’s next big solar project? Solar developer Community Energy has applied to build 125-megawatts in solar capacity in Augusta County, reports PV magazine. To offset concerns about neighborhood impact, Community Energy plans to surround the facility with a buffer of vegetation and put into place measures to diminish the limited audio output. Instead of purchasing the land, the power company is leasing it from landowners, providing farmers an ongoing revenue stream rather than a lump-sum payment.

Out with the old..

Gutted newsrooms. Ned Oliver with the Virginia Mercury has quantified the shrinkage of news staff at Virginia’s largest daily newspapers in recent years. After quietly laying off another eight newspaper employees at the beginning of the month, the Richmond Times-Dispatch newsroom has gone from 42 news and sports reporters in 2010 to 26 today, from nine to six photographers, and from 20 to 13 editors. The Virginian-Pilot has dropped from 67 reporters to 33, 35 editors from to 22, and eight photographers to five. Newsroom staff at the Roanoke Times has eroded by 35% to 25 reporters, 11 editors, and three photographers.

“Meanwhile,” writes Oliver, “there is still no clear model for metro and community newspapers to make up for the loss of all that ad money to digital giants like Google and Facebook.”

Tarheel coal ash overflow. In an event sure to impact the debate over coal ash in Virginia, heavy rains from Hurricane Florence eroded a coal ash facility at a Duke Energy power plant near Wilmington, N.C. The utility is investigating the possible release of about 2,000 cubic yards of the material — enough to fill two-thirds of an Olympic-size swimming pool, according to the Herald-Sun. It was not clear whether any of the ash, which contains traces of heavy metals, reached public waterways.

The release reinforces the necessity of removing coal ash from unlined, uncapped containment ponds where electric utilities have been restoring the coal-combustion residue for decades. Environmental Protection Agency regulations were designed to prevent incidents like this by consolidating and capping coal ash ponds. While environmentalists, regulators and utilities haggle over whether it’s better to store the material in lined landfills, a process that could take two to three decades, existing containment ponds remain vulnerable to extreme weather events like Florence.

Looks like a Taking, Feels like a Taking

Bike valet parking outside the Northside Richmond bike lane briefing.

The parallel struck me early in the meeting – this is like the pipeline process.  The people who want this bike lane are not deterred by what it does to the people and businesses directly on the route and disregard all concerns as unfounded.

Of course, the property owners along Richmond’s Brook Road do not actually own any of the pavement which would be converted from multi-vehicle use and dedicated to bicycles only. This may not qualify as a taking. But as they try to maneuver out of their driveways through the bike lane, see the one remaining travel lane occasionally blocked by emergency or service vehicles, and wonder if anybody will ever buy their house in the future, they will feel like they lost something.

Some of them came out to a community meeting Tuesday night to say so but found themselves up against the same kind of organizational techniques so effectively used in favor of the pipelines. The proponents had turned out their crowd and had people there to park their bikes and hand out shirt stickers.  When the moderator asked for questions, proponents instead made statements of strong support. It was a while before an opposing view was heard.

Joe Citizen just walking into a neighborhood meeting these days without planning and preparation and inclined to politely follow the rules is going to a gun fight with a pen knife.

The Experts were all for it, of course – city engineers and planners.  They’ve done their studies, thank you very much, and don’t need any more.  The “road diet” concept is Settled Science.  There is a consensus among 92.3 percent of traffic engineers (I made that number up) that adding bike lanes by eliminating car lanes stops speeding and saves lives (I didn’t make that up, that got said several times.)

It was just eerie how easily you could have substituted the Atlantic Coast Pipeline for the Brook Road bike lanes and little else said would have changed.  The bike lanes have federal agency blessing!  There is even federal funding!  Anybody who doesn’t fall in line is just not rational and need not be taken seriously (which explains the rude behavior poured on the Doubting Thomases who did speak).

The Richmond Times-Dispatch story on the meeting was abysmal, just rotten reporting. I don’t know the reporter, but he missed half the story. He implied all 250 people came to speak up in favor of the bike lanes, but plenty in the crowd did not join in the applause for statements of support and several made excellent point in opposition.

My bet is the reporter didn’t even know one of the speakers with concerns was former Secretary of Transportation Pierce Homer, and not quoting any of the many others raising questions was just shameful bias. On the other hand, the paper’s photo essay included several shots of skeptics, including Homer. But that didn’t tell the reader what was being said.

The pedestrian, bicycle and trails coordinator for the city staff, Jakob Helmbolt, made some telling statements. Most of the opposition flows from concerns the lanes will disappear just as surge of growth is expected. But when somebody asked about the huge open tract at the north end of the route near Azalea Avenue, ripe for commercial development and traffic growth, Helmbolt said he would consider that “at the time of development – that’s when the traffic impact study occurs.”

This 301-unit complex going up on Brook Road has proper zoning to expand.

Of course, once Brook is on its “diet” any developer may go elsewhere. Proponents even claimed that cutting down the road to a single lane each way will stop future apartment development. If they made that official with zoning changes, some of the opposition would melt.  But tell me again why that would not be a taking?

Somebody asked about turning right across the bike lines and Helmbolt dismissed that with: “The signalized intersections will have dedicated right turn lanes which will be shared,” he said. But there are scores of intersections without signals and all those private driveways. That’s the problem.

Big property owners on the route who were represented in the room but said nothing included Virginia Union University, a rapidly-growing private school, the Virginia Commonwealth University Children’s Hospital and CSX, which has a major gated crossing at the southern end of the bike lane route. A woman representing the industrial properties near those tracks, who will see their freight trucks restricted to that single lane and forced to turn across the bike lane, expressed strong opposition.

The meeting was all sparked by a proposed ordinance seeking to block the bike lanes, reversing earlier votes of support from City Council with less attention paid. Just when that ordinance might be taken up for a vote, or when the bike lanes will be created if it fails, never came up. I’m sure many are hoping that once the work is done and gas starts flowing, oops, I mean the bikes start using their protected lanes, things will quickly be forgotten.

The Berkeley of the East Coast

Has the City of Charlottesville become the Berkeley of the East Coast, a college-dominated town populated with enough leftists to enforce their destructive brand of politics? Maybe not quite yet, but when anarchists are referring to the liberal Democrats on City Council as “fascists” (view the video above), it could be getting close.

“While Charlottesville’s government continues to spin wildly off-center, raucous public meetings and accompanying calls for social, economic, and legal anarchy come at great cost,” writes Rob Schilling, a local radio host who bills himself as the first and last Republican since 1986 to get elected to the Charlottesville City Council, in the Bearing Drift blog. Consider the following, taken verbatim from his article:

  • Most recently, local developer and perennial City Council ally, Keith O. Woodard, cancelled the long-planned $50 million West 2nd project, citing an “adversarial” relationship with the City and “uncertain” process. The development was expected to net Charlottesville nearly $1 million annually in direct tax revenue.
  • Adding insult to injury, Charlottesville City Councilor, Mike Signer, himself was General Counsel on the Project Team for WillowTree at Woolen Mills. In such capacity he presumably helped negotiate app developer WillowTree’s exodus from Charlottesville into neighboring Albemarle County—a $20 million, 200-job boon for Albemarle’s economy and another crushing financial blow to the City, this time delivered by a Charlottesville elected official.
  • Nine years on, the rusting hulk of the Landmark Hotel on Charlottesville’s downtown mall stands as a monument to ineffective, bumbling, incompetent governance. The economic implications are manifest; no rational developer would risk large-scale “investing” here presently.

Says Schilling: “The escalating social and civic anarchy promulgated by the current crop of councilors has impelled Charlottesville into a rapid downward spiral, wherein nothing much may be left to ‘tear down’ when all is said and done.”

Bacon’s bottom line: Charlottesville enjoys a historic opportunity for urban revival as broad economic forces across the nation propel investment capital and people back into traditional downtowns and urban neighborhoods. In other Virginia metros, businesses are moving from the suburban jurisdictions to the urban cities, not the other way around. It would be a shame — and an object lesson to others — if the crazies ruined everything.

Solar Power and the Gentrification of the Countryside

Consider two mega-trends: (1) the push to renewable solar power and, (2) the changing economics of rural land that places an increasing value on pristine “viewsheds.” Both are powerful forces, and the two are coming into conflict here in Virginia. How the story ends, nobody yet knows. Hopefully, the two can be reconciled.

The American Battlefield Trust has published a study, “A War-Time Viewshed Study of Culpeper County,” that examines how far Confederate and Union troops see from the half-dozen signal stations around Culpeper County during the Civil War. The study asks, according to today’s Free Lance-Star, “what is the modern-day value of preserving such elevated vistas near the same areas proposed for two large solar farm projects?”

Virginia has committed itself to an energy future that eventually will rely upon solar energy for some 25% of its electric generating capacity. While a portion of that capacity will be installed on rooftops and other urban/sububurban locations, most of it will take the form of vast solar farms consuming thousands of acres in the countryside.

Once upon a time, when the countryside was inhabited mainly by farmers, that might not have caused consternation. Farmers held a strictly utilitarian attitude toward their land, and as long as a solar facility did not interfere with their farming operations, they wouldn’t have cared. But Virginia’s countryside has fundamentally changed. Farmers no longer predominate. Much of the countryside is now classified as “exurbs” — scattered, extremely low density development, primarily residential. In many places, farming is now seen as an intrusive activity, and homeowners get angry at slow-moving farm tractors clogging commuter traffic on country roads. Homeowners place a tremendous premium on the views from their back porches, the quality of that view affects the price of their property, and they get up in arms over anything that affects that view.

Another facet of this gentrification of the countryside is the proliferation of vineyards, breweries, and restaurants whose owners selected their locations for the beautiful views their patrons would enjoy while dining on the back patio. Increasingly, viewsheds have commercial economic value. Yet another aspect is the issued raised by the American Battlefield Trust of historic viewsheds. In a region with a rich history, such as Virginia’s northern Piedmont, there is strong sentiment for preserving historic viewsheds, both for practical economic reasons, such as preserving the local tourism trade, and for intrinsic reasons, such as protecting hallowed ground.

It’s no surprise, then, that Virginia has witnessed unprecedented levels of activism in opposition to infrastructure projects of any kind, be they natural gas pipelines, electric transmission lines, and now solar farms. The debate gets interesting because foes of pipelines and electric transmission lines have latched onto environmentalist arguments in support of their opposition. The pipelines, in particular, have been portrayed as antithetical to environmental goals of reducing CO2 emissions and combating global warming.

Environmentalists propose to reduce CO2 emissions by ramping up solar production — a land-intensive endeavor. While not as visually intrusive as high-voltage electric transmission towers, solar farms are comparable in visual impact to, say, a buried natural gas pipeline where trees have been cut down along the route.

“View sheds continually rank within the state as very significant to visitors,” said Glenn Stach, author of the American Battlefield Trust study. “Battlefield preservation and the experience of a battlefield today are best protected by the protection of agricultural lands.” Reports the Free Lance-Star:

“A contemporary viewshed policy says five miles is what you should manage, the mitigation of resources within that viewshed is most important,” he said.

The two proposed solar projects both are within that five-mile area. The panels will stretch up to maximum 15-feet during peak times, according to the extensive application submitted earlier this year by Texas-based Greenwood Solar seeking to build a utility scale project on 1,000 acres south of Stevensburg.

A separate project by Virginia Solar seeks to build on 172 acres between Stevensburg and Brandy Station with both following the existing Dominion Power transmission line.

A spokesman for one of the solar companies said the project would be out of view from the county’s “core battlefields, and the solar panels would have low, 12-foot profile.

And, thus, a new battle is joined.

State to Support Shipyard Hiring of 7,000

Rendering of the Columbia-class submarine

Governor Ralph Northam announced this morning a partnership with Newport News Shipbuilding to support the hiring of almost 7,000 people, including the creation of 2,000 new jobs, over the next five years.

These new hires will support shipyard contracts to build components for new Columbia-class submarines in addition to existing work such as construction of Virginia-class submarines, the refueling and complex overhaul and defueling of the Nimitz-class aircraft carriers, and the construction of Ford-class aircraft carriers, according to a press release from the Governor’s Office.

Today’s announcement was part of a larger “Build Virginia” initiative to “connect workers throughout the Commonwealth with training and employment opportunities in the skilled trades.” This effort will focus initially on connecting jobseekers and employers in the shipbuilding industry, but will broaden to other industries such as construction and advanced manufacturing.

“Newport News Shipbuilding’s success is important not just for Hampton Roads, but for the entire Commonwealth. Therefore, it is critical that we support growth of this magnitude with an innovative partnership between state agencies that will address the company’s workforce and training needs and supply a pipeline of skilled talent,” said Northam. “We have a responsibility as a Commonwealth to ensure that every single one of these jobs gets filled with a skilled and trained Virginian who is ready to succeed.”

As the U.S. economy reaches full employment and critical skills shortages are hindering expansion in industry after industry, even major players such as Newport News Shipbuilding, a division of Huntington Ingalls Industries, are having trouble meeting the demand for labor. The surge in hiring has overwhelmed the capacity of the company’s renowned apprenticeship school, where enrollment is limited to about 225 apprentices.

Virginia has a long history of state support for the giant shipbuilding company, an anchor of the Hampton Roads economy. In 2016, according to the governor’s press release, the General Assembly approved the Advanced Shipbuilding Production Facility Grant Program providing up to $46 million to help Newport News Shipbuilding upgrade its foundry and invest in facilities necessary to build Columbia-class submarines. The company will be eligible for these grants if they make capital investments of at least $750 million and create at least 1,000 jobs in the Columbia-class submarine program.

The governor’s announcement does not assign a monetary value to the initiative. While Northam describes the partnership as “innovative,” the only tangible new commitment noted in the press release is the appointment of Secretary of Commerce and Trade Brian Ball to “coordinate support from existing economic development programs.” These include:

  • The Virginia Economic Development Partnership’s Virginia Jobs Investment Program will provide state-funded consultative services and funding to support-employee training activities.
  • A GO Virginia grant and state funding will create the nation’s first workforce program in digital shipbuilding at Old Dominion University. The Virginia Digital Shipbuilding Workforce Program will develop a curriculum that can be shared with education and training partners statewide to prepare the current and future workforce for digital manufacturing jobs in shipbuilding.
  • The Virginia Employment Commission will continue to support Newport News Shipbuilding’s job creation through its Career Works Centers in Hampton and Norfolk, which host hiring events, pre-screen applicants, and support employer interviews.
  • The Virginia Community College System offers training and credentials pertinent to shipbuilding through FastForward, a workforce credential program.
  • The New Economy Workforce Credential Grant Program (WCG) was developed during the 2016 Virginia General Assembly session to sustain a supply of credentialed workers to fill high-demand occupations. WCG funds supported 441 enrollments in welding, pipefitting, machining, milling, and electrical in fiscal 2017, and 767 enrollments in fiscal 2018.
  • The General Assembly also provided funding from January 2012 through June 2014 for marine-skilled trades training. Under this program, Newport News Shipbuilding partnered with three regional community colleges to offer three-week pre-hire training programs in seven trades that have produced over 400 trainees to date, of whom 95 percent have been offered jobs at the shipyard.

Another Warning of Sea-Level Rise

Ashville Park subdivision in Virginia Beach after Hurricane Matthew. Photo credit: Virginian-Pilot

By 2030, $838 million worth of residential property in Virginia is at risk of being chronically inundated by high tides caused by rising sea levels, directly affecting more than 6,000 people and $8 million in property taxes, according to a new report by the Union for Concerned Scientists. The definition of “chronic” inundation is 26 times per year.

“Sea levels are rising. Tides are inching higher. High-tide floods are becoming more frequent and reaching farther inland. And hundreds of US coastal communities will soon face chronic, disruptive flooding that directly affects people’s homes, lives, and properties,” states the report, ” Underwater: Rising Seas, Chronic Floods, and the Implications for US Coastal Real Estate.” “Yet property values in most coastal real estate markets do not currently reflect this risk. And most homeowners, communities, and investors are not aware of the financial losses they may soon face.”

By the end of the century, the study warns, sea levels could rise by seven feet, exposing 115,000 Virginia homes worth $30 billion to routine flooding.

That’s the worst-case scenario, predicated on the assumptions that global warming-induced sea-level rise is accelerating and that communities are incapable of adapting, and it’s the one highlighted by the report and the Virginian-Pilot coverage of the report. Under the report’s low-rise scenario based on effective global action against climate change, sea levels will rise only a foot and a half, and projected losses would be much smaller.

Scientists skeptical of alarmist global warming scenarios counter that sea levels have been rising steadily by 20 centimeters per century for at least two centuries with no sign of accelerating. The implied sea-level rise globally would be six and a half inches by the end of the century. But the impact varies geographically depending on whether tectonic plates are rising or sinking. In Virginia, the tectonic plate is sinking, suggesting that the impact could be greater locally.

I react negatively to alarmist environmental scenarios, which I think are fed more by wishful thinking that the world is in desperate need of saving. But I don’t dismiss the UCS report out of hand. If these scientists’ worst fears are well founded, Virginia’s coastline could face massive dislocation. Even if the skeptics are right, periodic flooding will get worse — not catastrophically worse but enough to force us to think differently about coastal development.

Given the array of risks, we cannot continue business as usual. I’m not suggesting that it’s time for draconian action, but we can at least stop doing stupid stuff. By “stupid stuff,” I mean we should stop subsidizing coastal development through the National Flood Insurance Program and through implicit promises that state and local government will maintain roads, power lines, water-sewer and beach restoration regardless of cost in the face of increasing floods. Homeowners should bear the costs and risks associated with their decisions to live on or near the water.

Local governments also need to stop zoning for large developments in flood-prone areas. In a separate and unrelated article, the Virginian-Pilot describes the issues surrounding the proposed expansion of the Ashville Park development in Virginia Beach. The developers won zoning approval for the giant, high-quality subdivision more than a decade ago, before periodic flooding became a concern. In 2016 Hurricane Matthew overwhelmed the project’s storm water drainage system, flooding many houses and leaving families stranded for days. Fixes are expected to cost $11 million. The developer will share the cost of the first phase of $2.75 million; the city will cover the rest. Remarkably, the developer claims the right to be able to build up to 400 more houses.

I firmly believe that people should be able to build where they want — as long as they are willing to pay the full cost associated with their location decisions. The problem is not insoluble. Virginia Beach and other coastal localities should establish special tax districts in flood-prone zones, with provisions to expand the geographic scope of those zones as sea levels rise. Property owners in those zones would be assessed a tax surcharge to fund infrastructure projects — storm water drainage systems, flood control berms and dikes, the re-engineering of roads and bridges, whatever — deemed necessary to protect the community. The tax structure should be adjusted to penalize sprawling, low-density housing projects that require greater public investment and reward compact, infrastructure-efficient investment.

The risk of sea-level rise is likely exaggerated, but no one knows for sure. It is not right to transfer that risk — however great or small — from home-owners in flood-prone areas to the tax-paying public. The time to enact reform is now, not when the floods are upon us.