Understanding housing as a cornerstone of economic development

What role does housing play in a state and local economy in the US today? 

In a recent episode of Inside Steer: Conversations with Experts, I highlighted that in the dozens of projects Fourth Economy works on across our business each year, whether focused on economic development, workforce, or strategic organisational priorities, housing nearly always emerges as an intersectional issue of our practice areas. 

Take our work on the Commonwealth of Pennsylvania Statewide Housing Action Plan, a first-of-its-kind strategy for housing across the big cities and rural expanses of the Keystone State. 

Pennsylvania is, in many ways, emblematic of both the challenges and opportunities of the socioeconomic landscape of the USA today. Since the 1970s, the state and the wider Rustbelt have been marked by the decline of heavy industry and urban depopulation. However, a shift to sectors including health, education, and the now booming tech sector have led a resurgence of large metropolitan areas like Pittsburgh, Philadelphia, and surrounding regions drawing in workers from across the wider US and across the globe. 

The economy is highly mixed with large rural and farming areas as well as smaller suburban communities, some of which have seen growth and regeneration thanks in part to remote workers drawn by lower house prices. 

Meeting the needs of incoming residents who can support economic growth while also addressing the concerns of long-term Pennsylvanians facing the effects of gentrification is a remarkable and rewarding challenge. As a state, Pennsylvania must balance the needs of wealth creators to stay on top and be competitive while also honouring its longstanding residents and ensuring they are not left behind. 

Meanwhile, the state is characterised by an ageing housing stock and a slow recovery in building permits since 2008, creating a constrained supply. As a result, individuals and families across the socioeconomic spectrum are increasingly struggling to access and sustain affordable, accessible housing.

Our housing action plan was designed to meet the housing needs of all Pennsylvania residents, from market-rate to provision for unhoused people. 

Commissioned via an Executive Order from Governor Josh Shapiro, this work responds to the growing housing crisis across Pennsylvania.

Fourth Economy partnered with an interagency team, including the Department of Community and Economic Development, Department of Human Services, the Pennsylvania Housing Finance Agency, and the Governor’s Policy Office, to develop the state’s first comprehensive housing action plan. Drawing on our expertise in housing analysis and stakeholder engagement, the team assessed current conditions, projected future need, benchmarked national best practice, and created a robust evidence base to inform strategy.

The resulting 10-year plan sets clear statewide targets and outlines practical, data-driven actions to increase supply and improve access. Developed through extensive engagement across all 67 counties, it reflects the needs of urban, suburban, and rural communities. The analysis identified a requirement for 450,000 new housing units by 2035, avoiding a projected shortfall of 185,000 without intervention.

Backed by an “all-of-the-above” approach and a proposed $1 billion investment, the plan provides a clear pathway to delivery.

Turning housing strategy into delivery at scale

Turning housing strategy into delivery at scaleFrom statewide action plans to local implementation, we help governments translate housing need into clear, evidence-based strategies that unlock supply, improve access, and support economic growth. Speak to Nicole Muise-Kielkucki.