State Economic Development Executives (SEDE) Network

Category: Community and Physical Infrastructure

  • The 21st Century ROAD to Housing Act: What State Leaders Should Know

    The 21st Century ROAD to Housing Act: What State Leaders Should Know

    What the New Federal Housing Law Means for State Economic Development

    Housing has evolved from a quality-of-life issue to a core economic development challenge. State leaders underscored this reality at SEDE’s fall meeting in New York, noting that companies are increasingly unwilling to commit to locations where their workforce cannot afford to live nearby.

    The 21st Century ROAD to Housing Act may offer part of the solution. This legislation passed both chambers with bipartisan support, has recently become law, and represents the most significant federal housing package since 1990.

    This law contains many provisions, some (like a five-year ban on digital currency issuance at the Fed) are altogether unrelated to housing. Below is a summary of the relevant provisions for state economic development agencies.

    • Housing Support for Middle-income Workers

    Most federal housing assistance stops at incomes well below an area’s median income level, leaving a swath of middle-class workers without access to housing assistance. The 21st Century ROAD to Housing Act raises the income ceiling on HOME homeownership assistance (a major federal grant for building and repairing affordable homes) from 80 percent to 100 percent of area median income and orders a federal study to define “workforce housing” for households earning 80–120 percent of area median income.

    • New Grant Funding for Successful Housing Models

    A new $200 million annual grant fund will provide funds to communities that show measurable increases in housing supply. These grants will fund CDBG-eligible activities plus local initiatives that expand housing supply — zoning reform, permitting capacity, and infrastructure tied to housing. Separately, HUD’s Community Development Block Grant allocations to cities will be adjusted based on housing growth. This incentivizes local governments to approve additional housing. ED leaders can help communities compete for these dollars to benefit site development and workforce strategies.

    • A Streamlined Approval Process

    On the regulatory side, many small infill projects, developments of 15 homes or fewer, and office-to-apartment conversions are now exempt from lengthy federal environmental reviews. These changes take effect on their own with no new funding required.

    • Support for Manufactured Housing

    Manufactured homes are among the least expensive forms of new housing. The new law removes an outdated requirement to build manufactured homes on a permanent steel frame, something which should reduce the cost and time to deployment of new manufactured housing. New grants will also fund infrastructure in manufactured housing communities.

    • Newly Rationalized Disaster Recovery Grants

    The block grant program that funds long-term disaster recovery has run on improvised rules since Katrina. The operating rules are now written into law with set timelines, and states can pre-certify their financial controls before a disaster strikes. In practice, these changes will mean faster deployment of funding after a disaster and the ability for states to set up and certify their recovery systems ahead of time, rather than building them after a disaster has already hit. This is a meaningful planning tool for any state with storm, flood, or wildfire exposure.

    • Institutional Investors

    Restricts large institutional investors from buying additional single-family homes once they have acquired 350 or more. The threshold counts homes acquired after the law takes effect, and investors are not required to sell homes they already own. Several exemptions apply, including for investors purchasing or building single-family homes specifically for the rental market.

    • Programs Authorized but Not Funded

    The law will create many new programs but does not include new appropriations to fund them. Therefore, the grant programs will only exist if Congress funds them in future spending bills. For state leaders, authorized but not appropriated programs may be a worthwhile advocacy target.

    What Does This Mean for Leaders?

    Taken together, these provisions reframe housing as workforce infrastructure — the same connection state leaders drew in New York, where the availability of housing near job sites emerged as a direct constraint on project wins and talent attraction. Much of the law’s potential impact now depends on implementation: which programs get funded, how federal agencies write the rules, and how effectively states position their communities to compete. SEDE will continue tracking that process and will keep members informed as guidance is issued and appropriations decisions take shape in the months ahead.

  • Whitepaper: Child Care as Economic Infrastructure

    Executive Summary

    Child care determines whether parents can work. For state economic development leaders, that makes it economic infrastructure, not a social program, because inadequate access slows growth by shrinking the available labor force.

    States are responding with a widening menu of tools. Most lower the price families pay. A few expand the supply of care. The two are not interchangeable, and the binding constraint differs by region. The most important shift is in financing. New models blend employer, family, philanthropic, and private capital with public dollars, rather than relying on appropriations alone. Cost-sharing programs, an expanded federal employer credit, community development finance, and shared-services alliances now let states stretch limited public money much further.

    Read the full report here.

  • Urban Institute: How Has Federal Spending on Place-Based Programs Changed Over Time?

    Between 2010 and 2024, federal spending on the country’s largest recurring place-based programs climbed from roughly $44.1 billion to $60.7 billion in inflation-adjusted terms—yet direct program spending fell over that same span.

    Urban Institute’s report traces this shift across 13 programs and finds that tax expenditures like the Low-Income Housing Tax Credit and Opportunity Zones now account for 84 percent of tracked spending, up from 66 percent in 2010, handing the private sector a larger say in where federal dollars land.

    If you are deciding whether current funding matches the needs of your community, or you are interested in who now directs these investments, tyou should read this report.

    Explore the full breakdown here.

  • RMI Webinar: Driving Economic Development with Affordable Power

    Watch Webinar recording here.

    As competition for new industrial facilities, data centers, and other large electricity loads intensifies, the cost, reliability, and speed of electricity delivery are emerging as critical factors in state and regional competitiveness. Energy affordability is no longer just a consumer issue—it is a central consideration for economic developers, site selectors, and the companies making location decisions worth billions of dollars in capital investment. 

    This webinar explored how states are thinking about electricity rates, grid reliability, and speed to deployment for new large loads. Panelists discussed what energy offices and economic developers can do together to make the underlying utility and regulatory dynamics more legible and actionable—and how proactive strategies around electricity affordability can become a genuine competitive advantage. 

    Speakers

    Matthew Land, Senior Associate, US Program

    Jennifer Mundt, Assistant Secretary for Energy & Infrastructure, North Carolina Department of Commerce

    Rebecca Puck Stair, Director, New Mexico State Energy Office

    Kasparas Spokas, Electricity Director, Clean Air Task Force

  • Midwestern Governor’s Association Webinar Series: New America’s Smartland: Electricity Affordability

    In the face of unprecedented load growth in the U.S., many states are experiencing increases in the cost of electricity. You are invited to a five webinar series hosted by the Midwestern Governors Association that will discuss energy affordability from a variety of perspectives. These webinars will be useful regardless of where your state is located.  Webinar topics will include:

    • Trends in Affordability (March 26)
    • How are State Governments Responding? (April 7)
    • Affordability in a Time of System Investment (April 16)
    • Community Engagement and Customer Bills (April 28)
    • Affordability in the News (May 12)

    Register Here

  • Brookings Webcast: Why are electricity prices rising in the US and what can be done about it?

    Electricity prices are on the rise for millions of Americans. In more than half of U.S. states, electricity prices have outpaced inflation since 2019, straining household budgets while undermining economic growth and activity. Based on the latest estimates, these price increases are likely to continue. Without credible policy solutions to rein in rising prices, electricity will increasingly contribute to the cost-of-living crisis in the U.S. and potentially harm economic competitiveness. It is therefore essential to take an objective look at the potential explanations for rising rates and account for the complex variation in electricity prices across regions, states, and customer types.

    On Monday, March 2, the Center on Regulation and Markets at the Brookings Institution will host an event to understand why electricity prices are rising across the U.S. and what can be done about it. Part of the center’s ongoing series, Reimagining Modern-day Markets and Regulations, the event will kick off with a keynote fireside chat with Joseph Bowring, president of Monitoring Analytics.

    Following the keynote, a panel of distinguished experts including Brendan Pierpont (Energy Innovation), Abe Silverman (Johns Hopkins), Ryan Wiser (Lawrence Berkeley National Laboratory) will offer their analyses and a path forward for policymakers and industry alike. Malihe Alikhani, visiting fellow with the Center on Regulation and Markets and assistant professor at Northeastern University’s Khoury College of Computer Science, will moderate the panel.

    This event will be open to attend in person or watch online. Online viewers can submit questions via email to events@brookings.edu.

    Register Here

  • The Impact of the Childcare Challenge on Regional Economic Competitiveness

    Economic development succeeds when regions align talent, infrastructure, and employer demand. Access to quality, affordable childcare is a form of economic infrastructure that directly shapes labor force participation, business productivity, and regional competitiveness.

    National research consistently shows that inadequate access to childcare suppresses workforce participation and slows economic growth. Estimates place the annual cost to the U.S. economy at more than $120 billion in lost earnings, productivity, and tax revenue (First Five Years Fund, 2025). State-level analyses from the U.S. Chamber of Commerce Foundation show that childcare disruptions cost states an average of roughly 0.4 percent of GDP each year (U.S. Chamber of Commerce Foundation, 2024).

    Employer experience reinforces this national picture. A December 2025 statewide survey of hundreds of employers in Virginia found that childcare challenges are directly affecting hiring, retention, and productivity across the Commonwealth (Virginia Chamber of Commerce Foundation, 2025). Not only is childcare a family issue, but it is also a business constraint with measurable economic consequences.

    At the same time, policy research underscores that these impacts reflect deeper structural failures in the childcare market where prices remain unaffordable for families but still insufficient to sustain providers or pay early educators a livable wage (The Century Foundation, 2025). The result is chronic supply shortages and workforce instability that undermine regional labor markets.

    Why Workforce Participation Is the Economic Issue

    Labor shortages remain a defining challenge for state and regional economies. Childcare plays a large role in those shortages. Nationally, more than one-quarter of households report experiencing a job change due to childcare challenges, and a growing share of parents expect to leave the workforce entirely if conditions do not improve (U.S. Chamber of Commerce Foundation, 2024).

    In a December 2025 survey, Virginia employers report similar and often more severe impacts. About 88 percent of employers report that employees are late or miss work due to childcare issues, 65 percent report workers reducing hours, 41 percent report declined job offers or promotions, and 34 percent report workers leaving jobs altogether (Virginia Chamber of Commerce Foundation, 2025). Employers with nontraditional or unpredictable schedules report even greater disruption.

    These outcomes translate directly into reduced labor force participation and weaker execution of workforce strategies. Based on relevant academic studies and employer survey evidence, inadequate access to affordable childcare may reduce overall labor force participation by approximately 0.5 to 1.0 percentage points. Participation among parents of young children may be 7 to 10 percentage points lower than it would be under universally affordable and accessible childcare (Baker, Gruber, & Milligan; U.S. Department of the Treasury, 2021; Virginia Chamber of Commerce Foundation, 2025).

    For regions pursuing growth in sectors with a high share of women in their workforce (e.g., health care, hospitality, logistics, retail, and other labor-intensive industries), childcare access increasingly determines whether economic strategies succeed or stall.

    The Business Cost of Inaction

    For employers, childcare instability drives absenteeism, turnover, and replacement costs. These costs are rising faster than the cost of providing childcare as a retention and workforce stabilization tool. A comprehensive review of the economic literature finds that the average cost of employee turnover is approximately 40 percent of a worker’s annual salary, with a median closer to 24 percent and wide variation by occupation and industry (Bahn & Sanchez Cumming, 2020). In lower-wage and service-sector roles, replacement costs commonly range from 15 to 30 percent of annual wages. For specialized or managerial roles, costs often exceed annual pay.

    This research draws on 31 case studies across industries including health care, hospitality, retail, transportation, education, manufacturing, and finance. It captures both direct costs, such as recruiting and training, and indirect costs, such as lost productivity, service disruptions, and customer loss. These indirect costs are frequently underestimated but materially affect firm performance.

    Virginia employers link many of these pressures directly to childcare instability. In the December 2025 survey, 81 percent of employers reported that childcare challenges affect hiring and retention, and 85 percent reported impacts on business productivity (Virginia Chamber of Commerce Foundation, 2025). Together, the research and employer evidence show that childcare breakdowns create recurring business costs rather than isolated workforce disruptions.

    Household Affordability Shapes Regional Talent Supply

    Childcare affordability directly affects the depth and stability of the labor pool. Average annual childcare costs exceed $12,000 and consume more than 13 percent of household income in many states, far above the commonly cited affordability benchmark of 7 percent (Bipartisan Policy Center, 2020; Economic Policy Institute, 2025).

    In Virginia, affordability and access challenges are tightly linked. Eighty-six percent of employers report that their employees struggle with childcare expenses, and 65 percent report employees cannot find programs with open seats (Virginia Chamber of Commerce Foundation, 2025). When families cannot afford or access care, workers reduce hours, decline advancement opportunities, or exit the workforce.

    The Century Foundation emphasizes that affordability challenges cannot be separated from supply constraints. Public subsidies reach only a fraction of eligible families, while providers face rising overhead costs and persistently low wages that drive educator turnover and limit capacity expansion.

    Long-term impacts compound. Workers who leave the labor force for several years due to childcare constraints can lose hundreds of thousands of dollars in lifetime earnings, weakening household stability and shrinking the regional talent pool (Center for American Progress, 2016). Skills erosion during time out of the workforce raises reentry costs for both workers and public workforce systems.

    What Research Says

    There is broad agreement across federal agencies, business organizations, and labor economists on the core diagnosis. Childcare constraints caused by underinvestment and inadequate supply are market failures that limit productive capacity (U.S. Department of the Treasury, 2021). Employer survey evidence from Virginia strengthens this conclusion and shows that businesses are ready to engage.

    Evaluations of cost-sharing models, such as Tri-Share, suggest that these approaches can improve affordability and workforce attachment for participating families. Employers report improved retention and recruitment, and parents report a higher likelihood of remaining in the workforce (Public Sector Consultants, 2024). However, Tri-Share alone is not sufficient. The Century Foundation finds that scalable solutions also require expanded childcare supply, reductions in childcare deserts, and substantially improved wages for early educators.

    Limits and Design Choices Matter

    In short, affordability alone does not guarantee access. In regions with limited provider capacity, families may qualify for assistance but still struggle to find care. Cost-sharing works best when paired with strategies that stabilize provider finances and expand the early educator workforce.

    Scale matters. Pilot programs demonstrate proof of concept, but system-level labor force impacts require broader adoption and sustained funding.

    Employer participation hinges on cost and simplicity. The Virginia survey shows that cost is the biggest barrier preventing employers from offering childcare benefits. Employers call for increased state funding and incentives to crowd in business, private, and local investment (Virginia Chamber of Commerce Foundation, 2025).

    Administration matters. Programs that reduce complexity, pool public and private funding, and avoid tying benefits to a single employer offer more durable paths to affordability, supply expansion, and workforce stabilization.

    Implications for Regional Economic Development

    Childcare now sits squarely within economic development strategy because it is a critical talent pipeline constraint and disruptor for a stable labor pool. Regions that depend on a reliable workforce must address barriers to work. Evidence from national research, employer surveys, and policy analysis points in the same direction. Childcare constraints limit growth, and shared-responsibility models can help when embedded in a broader strategy.

    Public-private cost-sharing models can play a role when paired with investments that expand supply and address the true cost of quality care. Well-designed approaches crowd in employer investment, stretch public dollars, and address workforce barriers identified directly by businesses.

    To ignore childcare constraints is to accept avoidable limits on labor force participation and productivity. Integrating childcare into workforce and economic development strategy strengthens regions, supports employers, and expands opportunity.

    References

    Bahn, K., & Sanchez Cumming, C. (2020). Improving U.S. labor standards and the quality of jobs to reduce the costs of employee turnover to U.S. companies. Washington Center for Equitable Growth.

    Bipartisan Policy Center. (2020). Demystifying childcare affordability.

    Center for American Progress. (2016). The hidden cost of a failing childcare system.

    Century Foundation, The. (2025). The Tri-Share model is not a solution to the childcare crisis.

    Economic Policy Institute. (2025). Family budget calculator.

    First Five Years Fund. (2025). How a lack of affordable childcare impacts the economy.

    Public Sector Consultants. (2024). Michigan Tri-Share 2024 evaluation report.

    U.S. Chamber of Commerce Foundation. (2024). Untapped potential: How childcare impacts state economies.

    U.S. Department of the Treasury. (2021). The economics of childcare supply in the United States.

    Virginia Chamber of Commerce Foundation. (2025). Childcare is the foundation of Virginia’s economy: Employer survey summary (December 2025).

  • Rebuilding How America Delivers: What State Economic Development Leaders Can Do Next

    States are at a critical inflection point. Significant federal resources have flowed to communities, creating real opportunity to strengthen housing supply, modernize infrastructure, improve water systems, and drive regional growth. These investments also exposed a clear challenge. As AmericaFWD’s State of Play (released December 2025) makes clear, the systems used to plan, fund, and deliver projects are not keeping up with the scale or speed that today’s economy requires.

    For state economic development leaders, the message is straightforward and operational. Communities want results they can see. They want projects that move on schedule, control costs, and translate investment into jobs, competitiveness, and growth. Too often, delivery slows because responsibilities are fragmented, processes are outdated, and incentives across agencies do not align. Capital helps. Execution determines outcomes.

    The report highlights an important advantage that states already have. Local governments, utilities, and regional partners are ready to deliver. When outcomes fall short, the barrier is rarely vision or commitment. It is capacity, coordination, and process. States sit at the center of that equation. When state systems align funding, permitting, technical assistance, and accountability, projects move faster and perform better.

    AmericaFWD also reinforces a lesson state leaders know well. Housing, transportation, water, and economic opportunity operate as connected systems. Treating them separately raises costs and delays impact. Integrated planning across agencies and programs improves sequencing, reduces duplication, and strengthens returns for communities and employers alike. States are uniquely positioned to drive that alignment.

    A central takeaway for states is the importance of capacity. Communities with skilled staff, technical expertise, and clear authority consistently outperform those without it. Strategic technical assistance, clearer guidance, and streamlined state-level processes help local teams manage risk and deliver projects efficiently. This is not about adding bureaucracy. It is about improving performance across the delivery system.

    AmericaFWD’s State of Play offers a constructive path forward. Its near-term agenda focuses on strengthening local capacity, accelerating project delivery, modernizing systems, and sharing what works across states and regions. For state economic development leaders, the opportunity is clear.

    Apply these lessons now to turn investment into durable growth, competitive places, and visible results. This moment calls for sharper execution. The tools are available. The challenge is alignment and delivery. This report provides a practical blueprint for moving faster and delivering better outcomes for states and the communities they serve.

    Read full report here.

  • Strategies to Bridge Housing Gaps and Fuel Economic Development – Reflections on a SEDE Webinar

    Housing, it’s everywhere in the news: the lack of it, the demand for it, and the high price Americans are paying to get it. And it’s no wonder; the median price of a home has increased by 88% since 2008, with prices rising by 24% in just the last five years. Even in traditionally affordable housing markets, supply is tight, fueling further price increases.

    Without affordable housing, cities and regions are unable to attract the workers and business investment they need to boost their economies. Research from the U.S. Chamber of Commerce finds that statewide housing shortages in states like Missouri, Wisconsin, Tennessee, and Indiana have caused $5-10 billion in GDP loss per state between 2008 and 2025. Even local shortages have a national impact: research analyzing data from 1964 to 2009 found that the lack of affordable housing in just three job markets – New York City, San Francisco and San Jose, CA – decreased US GDP by 3.7%, or approximately $535 billion.

    What is going on here? The honest answer is: it’s complicated. Reporting from the New York Times indicates that the construction industry was permanently scarred by the 2008 housing crash, with new unit construction slowing from about 1-2 million per year between 2003 and 2007 to only 490,000 in 2009. Further, experts say that this limited growth in supply, combined with an increasing number of millennial homebuyers, exacerbated the 2020 recession. Inflation in material prices, worker shortages, a slowdown in construction, and high demand for housing all further contributed to increasing costs.

    In light of these challenges, the State Economic Development Executives Network (SEDE) hosted a webinar titled “Strategies to Bridge Housing Gaps and Fuel Economic Development”, with guest speakers Maurice Harris from Transwestern Commercial Real Estate and Eric Lynch from the National Association of Home Builders (NAHB).

    Lynch kicked off the webinar by addressing the issue of inflation and the consequent effect on mortgages, highlighting how inflation and interest rates have added new hurdles to housing affordability. The pandemic’s supply chain snarls fueled inflation, and the Federal Reserve responded with higher rates. “That difference in nominal dollar values is $805 a month,” Lynch explained, referring to the jump in mortgage payments as rates climbed. “So, if you think about that as a consumer… I don’t have an extra $805 a month to be able to spend on a mortgage. So, you can see why you get what is known as the lock-in effect for existing consumers.”

    Furthermore, homeowners who are locked into lower rates are reluctant to sell, further choking inventory. Lynch projected that mortgage rates will remain above 6% until at least 2027, and even as inflation slows, he warned, “the price level… is on average about 25% more [than in January 2020]. So, consumers have been… dealing with these price levels for quite a while, which is eating into their savings, which means their purchasing power isn’t necessarily as great as it used to be.”

    While Lynch’s comments reinforced the constrained market, Harris discussed how states might address it. Harris called for collaboration, saying, “you need to bring multiple people together, different politicians, local, state, federal, everything to try and figure out how to tackle this problem locally because it’s not going away.” According to Harris, solving the housing crisis will take more than one agency or level of government — the solution requires coordinated, multi-sector action.

    Harris stressed the need for increased federal funding and incentives, particularly for first-time homebuyers and affordable housing developments. “There’s a real need for federal funding and incentives to help get more affordable housing built,” he explained. With so many would-be buyers now stuck in the rental market, rents are climbing too, further squeezing household budgets. He noted that prices are pushing typical first-time homebuyers into the rental market, fueling rent hikes.

    And the causes don’t stop there. Seniors are staying in their homes longer – reducing housing turnover and making it harder for young families to enter the market.

    Even when new developments do happen, it’s often not the kind of housing that communities most need. “It’s not just about building more homes, it’s about building the right types of homes in the right places,” Harris said. Developers, responding to market pressures, are more likely to build high-density rental apartments. “It is more feasible for developers to build an apartment because there’s more units. And so, the return on investment is significantly better.”

    To move forward, Harris urged creative thinking: “We have to look at creative solutions, things like adaptive reuse of existing buildings, zoning changes, and public-private partnerships.” Strategies like repurposing underused office space, streamlining permitting processes, and relaxing restrictive zoning could unlock new opportunities in paralyzed housing markets.

    As the housing crisis continues to ripple through the economy and into the lives of everyday Americans. Lynch underscored the urgency of the situation: “We’re seeing more and more people being cost-burdened, spending more than 30% of their income on housing, and that’s just not sustainable.”

    Solving the housing crisis won’t be quick or easy. But with coordinated action, innovative thinking, and a willingness to work across sectors, real progress is possible.

  • Webinar: State Energy Financing: A Conversation with LPO and IWG

    You can access the presentation slides here.

    Please join the SEDE Network for this webinar on state energy financing and federal programming. We will host two presenters, Hans Reimer, Senior consultant and state and local outreach lead at DOE’s Loan Programs Office (LPO) and Brian Anderson, Executive Director, The Interagency Working Group (IWG) on Coal and Power Plant Communities and Economic Revitalization. These presentations will focus on available federal programs and potential partnership opportunities for states interested in energy finance.

    Hans Reimer: Hans Riemer is a senior consultant to the US Department of Energy’s Loan Programs Office (LPO), where he leads the state and local engagement team and is working with government and private sector leaders to finance a wide array of clean energy projects. Prior to joining LPO, Hans served for 12 years as an elected official in Montgomery County, Maryland, where he passed numerous energy and climate laws including all-electric building codes, solar zoning reforms, building energy performance standards, and smart growth incentives.

    Brian Anderson:Brian Anderson was named executive director of the Biden Administration’s Interagency Working Group (IWG) on Coal and Power Plant Communities and Economic Revitalization in April 2021. In this role, Anderson strategically leverages national laboratory resources and expertise to help ensure the shift to a clean energy economy creates good-paying union jobs, spurs economic revitalization, remediates environmental degradation and supports energy workers in coal, oil and gas, and power plant communities. A longtime resident of West Virginia and a descendant of coal miners, Anderson brings extensive expertise in regional innovation and technology development for the energy sector.