ODU’s annual report highlights housing, potential military pivot in top economic issues for Hampton Roads
Old Dominion University released its annual State of the Region report.
The 2022 edition gives the standard overview of the region’s economic and workforce conditions and spotlight on a handful of issues and case studies.
Here are the major points:
Ups and downs in the regional labor force
The workforce in Hampton Roads shrank by about 5 percent from before the pandemic hit in spring 2022 to May of this year.
The study flagged out-migration of people in their prime working years as a concern for the region’s economic competitiveness.
But the report points out that job gains and losses are not equal across industries, and there are some bright spots.
Transportation, warehousing, mining, logging and construction saw modest job gains over the pandemic, owing largely to a boost in activity at the Port of Virginia.
Other sectors lost jobs.
The biggest loss - and least recovery - happened in local government.
Cities and counties slashed positions at facilities like libraries and rec centers, which closed during much of the pandemic.
Local cities and counties also worried that massive tax reductions amid COVID-19 would mean they couldn’t pay staff. But the tax losses weren’t as bad as projected.
Despite this, many of those jobs have yet to be restored. The report says until people return to the diminished labor pool, governments will have a tough time fighting for limited recruits.
Unmanned drones pose an economic threat
In Hampton Roads, 2 out of every 5 dollars in economic activity is tied to the Department of Defense.
And while defense spending continues to grow, the report worries about how a shift in battlefield philosophy may impact the region’s biggest industry.
The Ukrainian defense against the Russian invasion demonstrated the potential power of unmanned aerial vehicles.
Ukrainian armed forces have used everything from cheap, off-the-shelf drones to military-grade UAVs from the United States.
The cheap unmanned weapons can do devastating damage to troops, tanks and even naval vessels. The ODU report notes Ukraine forced the Russian Navy away from the nation’s coastline by sinking Russian patrol ships with drones.
The report ponders if the U.S. military may shift away from large, costly projects like the Navy ships Hampton Roads has made a name manufacturing and maintaining.
“The region produces weapon systems that have grown increasingly complex and costly... Yet, these future investments are increasingly at risk on the modern battlefield,” the report said
“The Navy is not going away, but the Navy over the coming decades will be markedly different than it is today. Much like aircraft carriers replaced battleships as the focal point of naval strategy in the Pacific in World War II, unmanned ships and aircraft are likely to become dominant in the coming decades.”
Housing is not affordable
The State of the Region report makes no bones about it: It’s expensive to keep a roof over your head in Hampton Roads.
The report makes the case that anyone who views Hampton Roads as a cheap alternative to Richmond or Northern Virginia is only looking at half the picture.
It may be cheaper to rent an apartment or buy a home in raw dollars - median rent in Washington, D.C. is 30% higher than in Virginia Beach. But wages are even more imbalanced.
About 1 in 3 households in Hampton Roads spend more than 30% of their monthly income on housing, defined as “cost-burdened” by the federal government. That’s the highest ratio in the state, and is worse than comparable regions like Raleigh, North Carolina or Jacksonville, Florida.
The report points to many reasons why the wage-to-housing-cost ratio is out of whack.
One is a failure to keep up with demand by building homes, condos and apartments. Supply has failed to keep pace with increasing demand, driving prices up.
There’s also growing wage inequality. The report notes that the number of people making more than the region’s median income grew, and the number in extreme poverty grew.
The influence of the military also puts pressure on the housing market, with military-affiliated employees earning more than twice the annual pay of the average non-defense worker in the region.
The report notes that the military’s housing allowance tends to be how landlords set rent for everyone.
Hampton's Swimming Bet
The State of the Region report highlights Hampton’s construction of a new aquatics center as a case study of a local amenity that can be used to attract money to the region.
Hampton spent years discussing and refining the idea to capitalize on a lack of local facilities while also drawing major competitive swimming events to Hampton Roads.
The idea takes inspiration from the city’s Boo Williams Sportsplex, which draws national basketball tournaments, and with them, the families from outside the region who would come and spend money to eat and stay in hotels.
But residents were skeptical of a $29.5 million project catering to out-of-towners.
So the city had to sell the project to the public as a dual-use facility.
It would still market to the competitive swimming set, with 8-lane Olympic pool and state-of-the-art timekeeping and scoreboards. But it would also cater to the community, with a multi-use pool and swim lessons guaranteed for every Hampton Public Schools student.
The report notes this could help bridge the racial swimming gap.
Black youth are less likely to be able to swim and more likely to drown than their white counterparts.
Financial barriers are one reason. Lower-income households - which are disproportionately minorities - report lower swimming abilities.
Those families may not have access to swimming facilities where children could learn.
Racial segregation in the 1950s and 60s also contributed to the swimming gap.
After segregation of public parks and beaches was ruled unconstitutional, hundreds of public pools around the nation were defunded or closed, limiting swimming access.