We in Hampton Roads have had a stable existence largely in part due to the military presence in the area and the economic windfall that comes from them being here. The military, the supporting civil involvement and local and regional economies have pushed us through even during the most challenging of times.
The military is the single most important economic driver in the Hampton Roads region of southeastern Virginia. Its influence extends well beyond defense installations, affecting employment, business development, housing demand and the broader real estate market.
Hampton Roads is home to one of the largest concentrations of military personnel and facilities in the world. Major installations include but are not limited to: Naval Station Norfolk — the world’s largest naval base; Joint Base Langley–Eustis; Naval Air Station Oceana, Little Creek; Fort Story; Cheatham Annex; Coast Guard Training Center–Yorktown and Camp Peary.
The region is home to approximately 150,000 active-duty military personnel, tens of thousands of civilian Department of Defense employees and a large military retiree population. Combined, these groups represent one of the area’s largest employment sectors.
The military contributes tens of billions of dollars annually to the Hampton Roads economy through federal spending, defense contracting, shipbuilding and ship repair, healthcare, retail and consumer spending, real estate investment and employment. Major employers of military include Huntington Ingalls Industries, Department of Defense, defense contractors in cybersecurity, engineering, logistics and aerospace.
Because military spending is funded by the federal government, Hampton Roads tends to experience less economic volatility than regions dependent on tourism or manufacturing alone. This was especially apparent during the pandemic.
The military has a significant influence on housing and commercial real estate demand.
Military families relocate every few years, creating consistent housing demand for single-family homes, townhomes, apartments and rental properties. The areas with particularly strong demand include Virginia Beach, Chesapeake, Norfolk, Newport News, Hampton, York County, Williamsburg and Poquoson.
Many service members choose to rent rather than buy because of frequent relocations every three years. This helps keep vacancy rates relatively low in neighborhoods near military installations. Permanent Change of Station moves occur year-round, with a peak during the summer months. These cycles contribute to seasonal increases in home sales and rental activity.
For real estate investors, Hampton Roads offers several advantages with regard to the military. These advantages include consistent tenant demand, lower vacancy risk especially near bases, large population of reliable renters with steady income and diverse housing needs, from apartments to larger family homes.
The military acts as an economic stabilizer during recessions. While no region is immune to pandemics or severe downturns, federal defense spending has historically helped cushion Hampton Roads from severe economic declines. This stability benefits home values, retail businesses, construction, healthcare, professional services and education.
Being so heavily involved with the military is not without its challenges. Despite its strengths, heavy reliance on the military also presents risks. Base realignment or closure decisions could reduce employment and housing demand (i.e., Fort Monroe in Hampton). Federal budget cuts can affect defense contractors and related industries. Land-use restrictions around military installations may limit certain types of development. This is apparent in York County which has an abundance of its land footprint that cannot be developed due to miliary and/or conservation.
The military is foundational to Hampton Roads’ identity and economy. It supports hundreds of thousands of jobs directly and indirectly, generates substantial local, regional and federal investment and creates a steady source of housing demand that contributes to a relatively resilient real estate market. For homeowners, investors and businesses, the region’s enduring military presence has historically been a major factor supporting long-term economic stability and real estate activity.
Thank you to all those who serve and the families who support them.
