This report examines several major economic incentive programs and funds used in the Commonwealth of Virginia to attract new businesses and to support the expansion of existing businesses. Virginia operates a number of programs that provide loans and grants to businesses for economic development and job creation purposes. The programs reviewed in this report provide nearly $30 million per year in government support to businesses. Although the use of economic incentive programs has increased over the last decade in Virginia and in other states, surprisingly little attention has been paid to the effect of such programs on land use. For example, the effect of economic development subsidies on urban sprawl has only occasionally been addressed in the academic literature or by the media.
This report describes Virginia's current business incentive programs and analyzes whether land use patterns and long-term development effects are considered when providing grant and loan awards. Specifically, it explores the possible link between the provision of government support to businesses and the consideration of the effects of these subsidies and investments on land use, urban and exurban development, and sustainability of the economic and social investment.