Tag Archives: Rural development

$93 Million for Virginia Trails

A newly opened hiking/mountain biking trail outside of Missoula, Montana, in land protected by conservation easements.

The Bacon Family has just returned from a nine-day hiking trip to Montana. We were not surprised that the trails at Glacier National Park, with its rivers and lakes and snow-capped peaks, were world-class spectacular. But we were pleasantly surprised by the quality of the trails around Missoula, where we enjoyed two days of walking around the city’s highly walkable downtown and hiking the hills all around. Virginia has nothing resembling the Glacier National Park, a natural wonder that simply cannot be replicated (unless you have a few hundred-million years to work on it), but we do have college towns set in the mountains like Missoula (home to University of Montana). Blacksburg, Lexington and Harrisonburg come to mind.

What Missoula has done — setting aside land with conservation easements, and investing in hiking trails — can be replicated. Indeed, Virginia’s new budget contains $93 million for multi-use trails, eight times the previous year’s General Fund commitment of $10 million, according to the Virginia Bicycling Federation. Continue reading

The Rural Housing Challenge

Click for more legible image.

by James A. Bacon

I’ve tended to think of the housing-affordability issue in Virginia as a phenomenon relegated to the major metropolitan areas. Northern Virginia, Richmond and Hampton Roads are where the population growth has occurred, and that’s where zoning and environmental restrictions have been the most stringent, making it difficult for homebuilders to keep pace with demand. Figure in the higher cost of land, particularly near the urban cores, as well as regulations discriminating against trailer parks and manufactured housing, and it just seemed obvious that affordability would be a bigger issue than in slowly depopulating rural areas where, if anything, housing would be in excess supply.

But according to a recent article in the Richmond Federal Reserve Bank’s District Digest, affordability in the 5th District, which includes Virginia, is almost as severe a problem in rural areas as in metropolitan areas.

“In the Fifth District, rural households are only slightly less likely to
be housing cost burdened than urban households,” states an article by Sierra Latham. “Twenty-five percent of rural households at all income levels are housing cost burdened, versus 28 percent of urban households.” (The definition of “cost burdened” is when rent or home-ownership payments exceed 30% of income.) Continue reading

Bacon Bits: Bafflement, Confusion… and Hope

What is wrong with this picture? Headline from FFXnow: “Inova temporarily closes urgent care centers in Reston and Tysons due to high patient volume.” On top of an influx of COVID-19 cases fueled by the Delta variant, Virginia hospitals are getting more patients — many of whom had delayed seeking medical care due to the pandemic — with more medically complex conditions. The health system closed the two facilities to “manage an influx of patients without overwhelming exhausted staff.” I get the part about the staff being exhausted. But how does closing the two centers do anything to solve the patient overload? Inova says it is consolidated staff from the shuttered centers “to better accommodate patient volume.” Huh? No explanation of how that works. 

Build a rail line and they will come A newly launched Richmond-to-D.C. passenger rail line is the first project under the Northam administration’s $3.7 billion, 10-year passenger rail program which, due to protests, COVID-19 and culture wars, has warranted almost zero scrutiny. In this piece in Energy News Network, Danny Plaugher, executive director for Virginians for High Speed Rail, says the new line, which will generate a predicted 12,600 passengers annually, show how serious Virginia is in its commitment to high-speed rail. Aside from getting passengers off the highway, rail is touted as a way to reduce CO2 emissions in the all-consuming war on Climate Change. While the Northam administration is spending billions on rail, here’s what’s happening in the real world: Road and highway travel is recovering from the epidemic, while rail traffic is not. The most recent quarterly ridership for the Virginia Railway Express (VRE) commuter rail service in Northern Virginia, for example, is down 85% in 2021 compared to the same period in 2019.

A massive win for Southwest Virginia. A joint venture between Blue Star Manufacturing and American Glove Innovations has committed to invest $714 million to establish the most the world’s most advanced (NBR) manufacturing facility to produce nitrile rubber gloves. The project would repatriate production of an estimated 60 billion gloves annually from Asia to the United States. Based in the Progress Park in Wythe County, the project will employ a predicted 2,500 people within five years. According to the Virginia Department of Economic Development, it represents  “the largest job creation in Southwest Virginia in a generation.” As part of the deal, the state has promised to invest $8.5 million to upgrade water and wastewater capacity at the industrial park. The nitrile glove market is expected to grow 9% annually through 2027.

There’s Gold in Them Thar… Press Releases?

by Jock Yellott

It seems there is a vein of quartz underground in Buckingham County sparkling with gold. The General Assembly almost prohibited mining it, but then backed off. This time.

A string of historic gold mines going back to the 19th Century appear as red dots on the county geological survey map like chigger bites on the skin of the land. Exploratory drilling by a Canadian company, Aston Bay Holdings, found significant new quantities of gold there.

From about the depth of a water well — 150 to 300 feet– Aston Bay’s diamond drills pulled up broken columns of translucent white quartz flecked with yellow metal. They drilled and drilled again for about 200 yards, two dozen holes, rarely drilling without finding more quartz glinting with gold. Continue reading

What Is a Farming Landowner to Do?

by Jim Kindig

My 3rd great grandfather came to Augusta County in the 1820s, cleared land and established crops on land that is still in our family. Several of my neighbors could tell similar stories. We love farming, but it’s a hard life. Incredible increases in productivity have kept agricultural commodity prices depressed for 80 years. To keep up with the latest and greatest agricultural machinery and technology, farmers have borrowed heavily, using their ancestral lands as collateral. One or two bad years, and they go broke. Many see no way out of their cycle of indebtedness.

Today there is light at the end of the tunnel, so to speak, and that light comes from the sun. Large-scale solar farms offer landowners a low-risk means to keep their farm land. They can lease acreage to a solar developer for a guaranteed income over 25 years. At the end of the lease, they can easily convert the land back to agricultural production with no degradation of soil quality or health. Continue reading

How Hillsboro Reinvented Itself… with Government Grants

“Downtown” Hillsboro. Photo credit; Washington Post

by James A. Bacon

Hillsboro in western Loudoun County is a rural success story, reports The Washington Post. Over the past couple of years, the town of 120 has transformed its main street, a 0.7-mile stretch of Route 9. The addition of sidewalks made the community’s main drag inviting to pedestrians after having been rendered untraversable by the 17,000 vehicles, many of them conveying West Virginians to jobs in the Washington metropolitan area, that passed through every day.

Foot traffic at the Stoneybrook Farm and Market has more than doubled since early 2020. Kids can walk to class. Residents stroll instead of drive to the town’s Friday night concerts. The tiny shopping district is more inviting to the many visitors to the area’s wineries and breweries. Residents are upgrading their homes, and local businesses are expanding.

“It was hard to walk anywhere before. It felt like all you could do is drive to your house, get in your car, get out of your car, get in your car and drive somewhere else,” said Paul Hrebenak, who moved to Hillsboro a year ago. “Now you can walk across the street to your neighbor. You can walk the dog up the street and run into people and sit and chat on the sidewalk, rather than on the side of a busy highway.”

Hillsboro is the perfect illustration of what Bacon’s Rebellion has long advocated as a central part of any rural revitalization strategy — turning hamlets and small towns into walkable communities. There’s just one problem: The Hillsboro model is not replicable anywhere else — unless other communities can figure out how to raise the equivalent of $280,000 per resident in state, federal and local grants. Continue reading

Coal Counties Make Bid for Data Centers

Coal mines as source of geothermal cooling. Shown here: Will Payne, director of InvestSWVA. Credit: Virginia Business.

by James A. Bacon

Six localities in far Southwest Virginia have agreed to offer big tax breaks in a bid to recruit more data centers to the economically depressed region. The Project Oasis initiative will dangle the lower taxes as well as geothermal cooling from old coal mines as enticements that no other region can match.

The localities in the Lonesome Pine Regional Industrial Facilities Authority — Dickenson, Lee, Scott, and Wise counties and the City of Norton — have agreed to tax data-center equipment at a rate of $0.24 per $100, almost half the rate of the $.40 rate, the previous lowest rate in the state, that enabled Henrico County to attract a $1.75 billion Facebook data center.

As a kicker, Project Oasis offers industrial sites located near former coal mines filled with water naturally cooled to a temperature of 51 degrees. Energy consumption for cooling is a major expense for data centers. Project Oasis claims that geothermal cooling could save data centers more than $1 million annually in reduced electric costs and municipal water purchases. Continue reading

The Logic for Rural Broadband Subsidies

Source: “Bringing Broadband to America”

by James A. Bacon

Reputable estimates of the cost of making high-capacity Internet service universal across the United States run in the $80-billion to $85-billion range, but the society-wide benefits may be worth the outlay, argues Alexander Marré, a Baltimore-based regional economist with the Federal Reserve Bank of Richmond in a recent paper.

There are multiple benefits, Marré contends. Broadband has positive effects for business-location decisions and employment growth in rural areas, research data shows (although effects can be stronger in rural areas that are closer to metropolitan areas than more remote regions). Broadband also enables rural consumers to choose from a wider array of goods and services, potentially saving more than $1,000 per household. High-speed Internet also can improve the efficiency of rural labor markets. It can improve access to healthcare via telemedicine and distance learning. And, as a desirable amenity, it can boosts home values.

The  low density of businesses and households makes deployment of broadband infrastructure costlier than in metropolitan areas, and for-profit telecom companies can’t justify the low return on investment. But if the social benefits are as extensive as Marré contends, rural communities have a different cost-benefit calculus. His article explores several alternatives for bringing broadband to rural communities, including a Shenandoah Telecommunications (Shentel) projectin Virginia. Continue reading

The Political Economy of Solar Farms

by James A. Bacon

I have consistently supported the expansion of solar energy in Virginia, at least up to a point where it doesn’t compromise the reliability of the electric grid. When up-front capital costs and fuel costs are taken into account, solar is the lowest cost source of electricity in Virginia. Furthermore, as a supporter of property rights, I believe that rural landowners should be free to contract with developers to build solar farms on parcels that might otherwise lie fallow or go underutilized. Building solar farms potentially could put hundreds of millions of dollars in the pockets of rural landowners.

But I understand why people in rural Virginia get up in arms when big solar developers want to blanket thousands of acres with solar panels. I don’t necessarily agree with their proposed remedies, but I do understand.

Virginia’s urban/rural divide is becoming more pronounced than ever. That divide is most visible in voting results and electoral maps that show a vast geographic expanse of “red” Virginia compared to concentrated, highly populated clusters in “blue” Virginia. Views differ on a wide range of issues from gun rights and abortion to taxes and climate change. Continue reading

COVID, Urban Flight, and Rural Revival

by James A. Bacon

In announcing the creation of three new conservation easements in Henrico County, a recent press release from the Capital Region Land Conservancy made an eye-catching statement. The easements, said the Conservancy, act as a bulwark against rising pressure to develop agricultural land across Virginia “driven most recently by shifts in COVID-era lifestyles and soaring housing prices.”

This was the first time I recall anyone in Virginia making an explicit connection between the COVID epidemic, urban flight, and rising property values for agricultural land. The notion is worth exploring

The conversion of farmland into subdivisions is a long-standing concern. As the Conservancy notes, more than 339,000 acres of farmland were developed in Virginia between 2001 and 2016. In the Richmond region, more than 87,000 acres of farmland have been lost. By 2017 Henrico County had fewer than 100 farms and 10,000 acres of farmland.

The urban renaissance of the 2010s decade blunted the trend toward metropolitan sprawl. The center of gravity in development shifted back toward urban cores in Virginia and the U.S. generally. Now that momentum seems spent. Perhaps the COVID-19 epidemic is driving the reversal, but I suspect that the reality is more complex. It is also possible — consider it a  hypothesis — that after a year of protests, riots and rising violent crime rates in many cities, many urban dwellers, concerned about social breakdown, fear for their personal safety. The main thing holding them back is the paucity of rural broadband and connectivity. That barrier soon may fall. Continue reading

Vacation Homes as Virginia Rural Resource

Vacation-home share of housing, 2018. Credit: StatChat blog

by James A. Bacon

Virginia has more than 88,000 vacation homes, about 2.5% of all homes in the Commonwealth, according to the University of Virginia’s Demographics Research Group. These “seasonally vacant homes” intended mainly for recreational use are overwhelmingly located in amenity-rich rural locales along the Chesapeake Bay, the Blue Ridge and Allegheny Mountains, or man-made lakes.

Moreover, reports StatChat, the vacation share of housing has increased since 2018 in most jurisdictions — more than 7.5 percent in some cases.

Bacon’s Rebellion has argued that Virginia’s rural counties should position themselves as destinations for retirement and vacation housing as an economic development strategy. Retirement and rental properties boost the tax base and create service jobs in localities where employment opportunities are otherwise scarce. Continue reading

Solar Mega-Project Proposed for Pulaski County

by James A. Bacon

Developers of solar energy projects in Virginia often encounter resistance from rural communities where residents worry about the impact of vast solar farms on viewsheds, the tax base and the rural way of life. In Pulaski County, Hecate Energy LLC is dangling a new incentive to make its project palatable — the chance to attract lucrative data centers.

Hecate has proposed investing $400 million in a 280-megawatt solar project in three phases on 2,700 acres of land near the Town of Dublin, reports the [Pulaski County] Patriot. Hecate would pay leases to landowners, who currently use the land for low-value pasture and hayfields. The project is anticipated to generate $392,000 annually in added county tax revenue for a total of $13.7 million over the 35-year life of the project. As a bonus, the project would create 130 jobs during the construction phase. The new sweetener, never mentioned in press accounts of other solar projects I’ve seen, is the chance to vie for data-center projects.

“Approval of this project instantly makes Pulaski a player in the high-stakes game of Data Center recruitment,” said Hecate spokesman Jay Poole. “Companies which build Data Centers and other high-tech companies which demand sufficient quantities of renewable energy, go to places which make renewable energy more available.” Continue reading

The New Secret Weapon in Economic Development: Mine Water

Map credit: InvestSWVA “Project Oasis” report

by James A. Bacon

I don’t know if the latest scheme cooked up by Southwest Virginia’s economic developers is crackpot or genius, but it certainly is intriguing. As the coal industry of the state’s coal counties continues to bleed out, regional leaders are looking for ways to diversify the economy. And they think they might have identified a unique resource in the region — geothermal cooling — that will make it attractive to data centers.

Data centers are energy hogs. Massive banks of servers generate a lot of heat, which takes a lot of energy to cool. As a consequence, electricity is one of the biggest cost components of every data center.

A data center in Pennsylvania uses an limestone cave, which has continually replenished supply of 52° water, to cool a data center. As it happens, Southwest Virginia has limestone caves. Moreover, the region is riddled with underground coal mines that have flooded with water. According to an InvestSWVA report, “Project Oasis: Market Analysis for Data Center Investment in Southwest Virginia,” using mine water for cooling could reduce the electricity required for cooling the data center by 90%. The annual savings would be more than $1 million annually. Continue reading

Coal Severance Tax Credits Obsolete, JLARC Says


by James A. Bacon

Virginia’s coal tax credits are obsolete, cannot forestall the decline of coal mining in the state, and should be eliminated, finds the Joint Legislative Audit and Review Commission in a new report, “Infrastructure and Regional Incentives.”

The state provides two tax credits to encourage coal production: The Coalfield Employment Enhancement Tax Credit and the Virginia Coal Employment and Production Incentive Tax Credit. The two programs have saved coal companies and electricity generators $291.5 million in income taxes between FY 2010 and FY 2018, according to the report on the cost-effectiveness of economic development incentives. But the credits ranked at the bottom of JLARC’s list of incentives based on economic benefits per $1 million in spending.

The  coalfield credit is not needed because Virginia’s remaining mines are competitive with mines in other states based on a labor productivity basis (tons per employee hour), JLARC contends. The credit targeting electricity generators is fast becoming irrelevant when the state is moving towards a 100% renewable electric grid and phasing out its remaining coal-fired power plants. Continue reading

Is There a Government Role for Rural Development?

A scene from Dollywood, near Knoxville, Tenn.

by James A. Bacon

John Accordino, a planning professor at Virginia Commonwealth University, has been giving extensive thought to a perennial problem, the nation’s urban-rural divide. As author of a newly published article and State and Local Government Review, he provides a broad overview of his thinking in a Richmond Times-Dispatch column.

Accordino sees the urban-rural divide — the divergence in incomes and job growth — as unhealthy for America’s economy, society and politics. And he thinks it is something that government intervention can address.

I know John, and I think he is a very thoughtful guy. And I agree that there may be a limited role for government. But I am skeptical that the federal and state governments can be very helpful. The solutions, such as they are, must come from the bottom-up — from rural communities and local governments themselves.

But before I get into that, let’s see what Accordino has to say. Continue reading