Slow Growth in New Residents as High Cost of Living Pushes Young Adults to More Affordable Localities

The Northern Virginia Regional Commission released a new report about demographic shifts in the region, warning that the area is seeing a “slow growth” in new residents because of a high cost of living.

A new report by the Northern Virginia Regional Commission has highlighted the concerning impact of the high cost of living on the region's population growth, particularly among young adults. The report, titled "Shifting Migration Patterns of Northern Virginia: Affordable Housing Needs," analyzes the trends in domestic migration and its relation to housing affordability, income, and age.

According to the report, while Northern Virginia has experienced an annual increase in population since 2021, the growth has slowed compared to pre-pandemic levels. This slowdown is attributed to shifts in "domestic migration inflows and outflows."

The report underscores a broader national challenge faced by many regions across the country. The message is clear: the affordable housing crisis, further exacerbated by new increases to the cost of living, is largely keeping young people out of high-cost areas like Northern Virginia. Experts warn that these local issues are not simply a problem to be ignored or passed down to the younger generation, as the affordable housing crisis has more profound implications for the community's economic stability and growth.

As noted by Jill Kaneff, the commission's senior regional demographer, if county leaders fail to address the cost of living and affordable housing issues, the departure of people from the area will impact the economy, tax revenue, and fair access to housing.

The report analyzes the "volume of domestic migration" in Northern Virginia and the destinations where people are going, while also studying the effect of housing affordability, income, and age on people moving in and out of Northern Virginia.

In the report, Kaneff writes, "migration patterns in the region raise concerns about the young workforce." Young adults, who have "low and middle incomes" up to $150,000, "are increasingly choosing more affordable housing options outside the region."

"This trend is driven by the combination of high living costs and limited availability of affordable housing, both for first-time homebuyers and those looking for larger homes to raise a family," the report notes.

According to Kaneff, Northern Virginia is becoming "less attractive to young talent."

The report suggests that businesses will likely face increasing difficulty in "attracting and retaining young talent due to the cost of living." To address this issue, the report proposes that the region's businesses should "continue offering hybrid work options and upskill employees for higher-paying jobs."

"To ensure a prosperous and sustainable future for the region," Kaneff says, "it will be important for governments and businesses to collectively address these issues and to strengthen and expand housing programs."

When it comes to Northern Virginia's migration patterns, Kaneff observes two major dynamics at play: larger households with higher incomes are staying in the same county, while smaller households with low and middle incomes are moving away.

The top five area destinations where Northern Virginians are heading are Washington, D.C., Montgomery County, Md., Prince George's County, Md., and Stafford County and Fauquier counties in Virginia.

The report specifically highlights the challenges faced by young people in Fairfax County. "The issue of retaining young, highly educated workers in the region becomes even more critical as these people reach the stage where they want to settle down and start a family," the report notes. For this reason, it is observed that young people ready to start a family are attracted to localities outside of Northern Virginia.

"Local and state governments can play a crucial role in addressing the region's housing challenges," the report concludes.

One way that governments can alleviate the problem, it says, is "by speeding up housing construction by prioritizing an overhaul of the lengthy and complex local zoning and permitting processes, as well as increasing incentives for builders."

Additionally, the report says, "It will be important for local and state governments to dedicate more resources to housing programs for the middle class, particularly those earning less than $150,000." Also, the report suggests that "to reflect the current market's median price of lower-and mid-tier housing, the maximum home purchase price for first time homebuyer programs administered by Northern Virginia jurisdictions should be raised."

The report adds, "Expanding educational outreach and access to federal, state, and local housing programs would help more people stay in the region and become homeowners."

Despite the challenges, the report expresses optimism that the housing situation and high cost of living in Northern Virginia are not irreversible. The report notes that it is possible to improve affordability and foster a more "equitable living environment in Northern Virginia."

According to the report, "The high cost of living and limited housing options will hinder job growth." It says that if businesses in Northern Virginia cannot compete with metropolitan areas that have more affordable housing and attract younger talent, the region "risks mediocre economic growth and the possibility of businesses relocating."

To prevent this economic downfall, different partnerships are imaginable. For example, the report noted that Amazon donated vacant land to Arlington County to create new affordable housing units. To prevent a socioeconomic crisis, the report added, "The region's