Questioning the Core of Charlottesville’s Economy

What makes a local economy thrive, not just on the surface, but deep down?

I found myself pondering this question as I listened last week to a panel of speakers at the Tom Tom Founders Festival in Charlottesville, Va. They were discussing the economic future of the city, a place with a metro population of around 100,000 in Central Virginia.

Here is a city that appears in many ways to be booming. Small businesses are proliferating along various arteries that cross the city and on the downtown pedestrian mall. There are clusters of interesting economic activity such as wineries and brewpubs. Defense-related jobs are growing the city’s job base due to the city’s proximity to the nation’s capital and the number of nonprofit organizations is unusually large for a city of this size, providing their own fuel to the economic fire.

Yet beneath the surface, some of the panelists noted, all is not quite right with this picture.

A lot of wealthy people have settled in Charlottesville and they spend money in restaurants and shops, but they don’t tend to invest locally in start-up businesses and other potential sources of innovation. Many have their money tied up in large land estates just outside the city. Others have money but they didn’t move to this place to invest in its growth; they came to retire. Without their investment, some start-up firms that might otherwise put down roots here will instead move to Austin, Texas, or some other larger city where there are more resources available.

Another concern voiced at the discussion was whether the city government should be doing more to build an entrepreneurial culture, not just in terms of job creation but across the board. A panelist pointed to Austin, where the city has a program to help people transition step-by-step from public housing to their own homes, and offers microloans to aspiring small businesspeople, and wondered why Charlottesville couldn’t try these kinds of things.

It was noted that Charlottesville has attracted large employers, such as the federal government, which swoops in and occupies large properties on the city’s periphery. But what can be done to encourage small businesses to locate in the city’s neighborhoods, in order to create an environment where people can walk to work and to nearby establishments? Though it is a small city, traffic is becoming a real problem. It is generated by locals who must drive in order to shop, or who work in town, but can’t afford to live there.

Much of what I heard at this talk reminded me of challenges faced by cities and metro areas everywhere, but it was also enlightening to learn of distinct issues that other places may not have. A fundamental question still to be answered is to what extent the local governments (there is the city and the surrounding county, and they do not always work closely together) should intervene to influence the course that the local economy takes in the coming years. It may be needless to say, but it seems that a healthy, entrepreneurial economy can’t be generated by the market alone.

(Photo by Mr. T in DC CC BY-ND)

David Holtzman is a planner for Louisa County, Virginia, a freelance writer, and a former Shelterforce editor.


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