Housing Cost Burden in the Richmond Region
Richmond Regional Housing Framework
Our shared history shaped and continues to shape Richmond’s communities. The specter of the past casts a shadow over policymakers at every level of government. Decisions made by the General Assembly and local governments today are regularly weighed against policy choices made decades ago. Yet we cannot agree on what that shared history is and how it affects our communities today. By failing to understand fully our past, our region has been unable to overcome it.
But we cannot just move on. In order to undo the decisions of prior decades that negatively impact our communities, we must understand and, ultimately, confront our history. We must understand why our communities look the way that they do, and the forces that shaped them. Far too few of us know how our neighborhoods developed. For example, as the City of Richmond was growing in the early 20th century, Confederate monuments were used to advertise the sale of new homes that were only available to white buyers. Even proposed statues, such as the Stonewall Jackson monument, were marketed to garner interest in residential lots.
The homes that were for sale in these neighborhoods, and neighborhoods throughout the region, were accompanied by restrictive covenants such as the one below, which stated that “No lots can ever be sold or rented in MONUMENT AVENUE PARK to any person of African descent.”
Restrictive covenants were just one of many ways that local policies barred Black people from gaining access to homeownership, and thus an opportunity to forge generational wealth.
An ordinance passed in 1911 required that Black Richmonders only live on blocks in which they were the majority race. And in 1929, supported by state “racial-integrity” laws, Richmond City Council approved an ordinance that banned anyone from living in a neighborhood in which they were not able to marry a person of the majority population. Remember, interracial marriage was prohibited until 1967, when the Supreme Court of the United States overturned “racial integrity” laws in Loving vs. Virginia.
These local practices, in addition to federal policies, ensured that new, “desirable” neighborhoods like Monument Avenue would only be inhabited by white residents for many years to come, while Black residents were relegated to neighborhoods that were deemed “hazardous,” a practice that came to be known as redlining.
Why this history matters today.
In our region, those “desirable” neighborhoods—such as Monument Avenue—have white homeownership rates upwards of 70%. On the other hand, in “hazardous” neighborhoods where Black residents were confined, the Black homeownership rate sits at 33%. Additionally, as of this writing, the median home value in what were all-white neighborhoods by design are currently more than $640,000. For the “hazardous” neighborhoods, the ones in which Black residents were forced into through deceit and government decree, the median home value is $276,199.
These disparities are directly tethered to public policies intentionally designed to stymie or even completely eliminate Black families’ access to wealth. In a country where real property is valued above all else, the most effective way to build wealth is through homeownership. When the United States swung shut the gate on Black homeownership and held fast to neighborhood segregation, we locked Black families out of prosperity.
Our institutions, at every level and with brutal clarity, walled off Black residents from the primary wealth building mechanism in our country: homeownership. As time wore on, decade by decade, we added additional locks to the gate through land annexations, the GI Bill, urban renewal projects that razed neighborhoods like Fulton, highway construction that dissected Carver, Jackson Ward and destroyed Navy Hill, predatory lending that led to high rates of Black foreclosure and displacement, excessive taxes, and, quite often, state-sanctioned violence.
Our history, therefore, characterized by wealth disparities and racial inequities, prompts us to pursue strategies that equip all of the Richmond Region’s residents with the keys to prosperity and embraces values that reflect a community in which race and ethnicity are not predictive of outcomes. The Richmond Regional Housing Framework provides an opportunity to acknowledge our history and, through bold policy action, open new doors to a more equitable future.
“The home is the center of life... the wellspring of personhood. It is where our identity takes root and blossoms. Life and home are so intertwined that it is almost impossible to think about one without the other.”
—Matthew Desmond, Evicted
Everyone in the Richmond region will have a stable, healthy, and affordable place to call home.
Housing is an essential foundation for families and individuals to thrive economically and socially.
All homes should meet the standards we have for our own family.
We will create a future where race and ethnicity are not predictive of outcomes.
Housing challenges and the policies we adopt in our own localities affect our neighbors.
We will embrace bold solutions.
This framework is for Chesterfield County, Hanover County, Henrico County, the City of Richmond, and the Town of Ashland. Beginning in 2020, the Partnership for Housing Affordability will work closely with local officials and others in these communities to implement solutions that will increase housing opportunities across our region.
Imagine, for a moment, what the region might look like in 20 years under a new housing framework. It would mean nationally-recognized manufacturing and technology businesses investing in new facilities along the I-95 corridor in Henrico and Hanover Counties, where thousands of employees can walk or commute less than five minutes to work. A revitalized Route 1 corridor in Chesterfield County with homes and other development designed to enhance the quality of life for all residents. Or a Richmond Public School system with more racial equity, where citizens of all socio-economic backgrounds have housing access across all nine Council districts. In Ashland, it could look like new, two-story projects along England Street and Railroad Avenue with first floor commercial or retail and second-story apartments or condominiums.
A regional housing framework will position the Richmond region as a global destination for business investment and as a unique place to call home with a variety of housing options for all. It will enhance the quality of life for citizens by promoting new entrepreneurial ventures, reducing traffic congestion along busy corridors, which will enhance air quality, and embracing the characteristics that make each locality special. It will also reduce the burden of expensive infrastructure projects on localities and its citizens by creating more opportunities for private investment. This framework will serve as a platform for the voices and needs of all, especially marginalized communities.
Housing is the foundation of a thriving and vibrant community. The ability for every resident to live in an area where they can easily access necessities such as education, healthy food, employment, and health services will strengthen the fabric of the region and stimulate sustainable growth.
The Richmond region faces a variety of housing needs.
In the City of Richmond, millennials and baby boomers—our two largest population segments—seek diverse and vibrant neighborhoods, while many older neighborhoods with high numbers of people of color have seen little housing or economic reinvestment creating concentrated poverty and poor housing conditions. When these two realities collide, upward market pressures can squeeze long-time, low-income residents into housing instability when home values and rents begin to rise in previously affordable neighborhoods.
Chesterfield and Henrico counties also face conflicting market and demographic trends. Older inner-ring neighborhoods are experiencing greater racial and economic diversity, but the existing housing stock and land uses are not well-conditioned to serve these changing neighborhoods. Along major corridors, new mixed-use developments attract residents and consumers looking for urban-style communities. And while these counties are still considered “communities of opportunity” for their high-quality schools and job access, high homeownership costs and limited rental prospects are a major barrier for modest income families.
To the north, Hanover County looks to balance growth with its rural character by guiding new developments into areas easily served by existing utilities and transportation. As residents seek more affordable and denser housing choices, the county must consider supporting new types of homes—including duplexes, townhomes, and condominiums. And in Ashland—our “Center of the Universe”—residents and planners alike seek to fit new housing demand into its beloved small-town, main street feel.
We have common housing challenges to solve together.
While each locality has its unique assets and challenges, there is more that unites us than divides us. All must plan for the rapid “greying” of their populations as baby boomers and seniors age. All must address the current deficit—and future demand—for homes available to modest-income households looking to rent or own. And all must find innovative ways to preserve our existing housing stock to keep it accessible, resilient, and affordable for future generations. Accomplishing this will reap immediate and long-term quality of life benefits for everyone—but cross-jurisdictional and cross-sector collaboration is essential.
Housing opportunity and a thriving workforce are linked.
While the unemployment rate in the Richmond region hovers at or below 3%, there remains a critical need to match those that are unemployed or underemployed with the varied job openings that exist, to meet employer demand, and to ensure individuals have opportunities to meet their basic needs. At the same time, the housing industry in Virginia is the sixth largest employer in the private sector of Virginia’s economy, accounting for over 314,000 jobs and nearly $50 billion in economic activity in 2015 alone. Housing is not only a critical component in ensuring that an adequate workforce is available to meet the requirements of local businesses, but the development, construction and financing of that housing is a key element of our economy’s health.
The economies of Virginia and are region are performing well. For the 30-day period ending October 9, 2019, there were over 51,000 job openings posted by 9,200 employers in 768 different occupation types requiring 546 different certifications across the state. While job growth is robust, there are significant challenges to connecting job seekers with the appropriate skills to the employers who are looking for those skills. Also, many job seekers face multiple barriers to success that go beyond the skills needed to obtain employment—including stable housing. Workers who are unable to find housing near their employment, or who face multiple moves over a short time frame, are often less successful than their stably-housed peers.
Workforce development initiatives and housing providers need to work together. A coalition that includes both disciplines can make a greater impact than various “stand-alone” efforts operating independently. This Framework seeks to connect housing and our economy by promoting more opportunities for stable and affordable homes that help to grow and improve our region’s workforce and to build a bridge between our region’s workforce development and affordable housing sectors.
The Richmond Regional Housing Framework is an innovative approach for addressing our housing needs. Guided by a vision where everyone has a stable, healthy, and affordable place to call home—and bolstered by extensive research and community engagement—the Framework provides an action-oriented roadmap for solving, together, our region’s wide range of housing needs.
From the outset, the intention of the leadership group was to build a work product that emphasizes solutions while still ensuring that those strategies are based upon sound data and a clear understanding of conditions and trends. The Framework does just that, with more than half of the project devoted to strategies, policies, and initiatives that move the region toward greater housing opportunity.
The Framework is organized around six goals. Each is focused on a major housing challenge in the region, and each is informed by community voices along with data that support key findings. These findings, in turn, lead to prioritized solutions for each goal. Individual solutions are specific policies and programs that will help accomplish the goals. We note where some solutions “crosscut” across multiple goals, because they help achieve multiple objectives.
Over the next few years, the Framework will be used by the Partnership for Housing Affordability, housing providers, localities, and other stakeholders to steadily address our unique and shared housing challenges by implementing many of the solutions identified in the report as well as others that will emerge in the future. To measure progress, benchmarks are provided to monitor headway on solutions, track major indicators of housing affordability, and compare our region’s effort to peers.
The housing challenges confronting metropolitan Richmond are varied and complex, ranging from homelessness to affordable homeownership. The Partnership for Housing Affordability has led a collaborative effort to create a Regional Housing Framework to encourage consistent, collective focus in addressing the region’s shared housing challenges.
In 2019, PHA worked closely with local government representatives, housing providers and experts, members of the public, and other important stakeholders to develop this Framework. Their input, available for review, combined with analysis of new and unique data, directly shaped the goals and solutions.
The localities involved in this Framework—the City of Richmond, the town of Ashland, and the counties of Chesterfield, Hanover, and Henrico—now have a three-year, outcome-oriented set of solutions for increasing housing affordability. PHA will collaborate with these public-sector partners to implement many of these solutions in the near future.
Many of us seldom think about housing beyond our own front door. Because community-wide housing needs are so often overlooked or taken for granted, it can be hard to convince the public and policymakers that housing is foundational and interconnected with so many issues that define our satisfaction with our communities and our own lives.
Mental and physical health, schools, the local economy, childhood development, the environment, transportation, neighborhood quality—for all these issues, housing is a critical component and contributor. When housing challenges go unmet, making collective progress becomes difficult. But when housing issues are addressed, it becomes possible to make improvements in all these areas.
Housing advocates have long stressed the importance of secure, affordable homes. But as an elevated public policy issue, housing has only recently been recognized as an overarching challenge—particularly in communities where housing conditions for low- and moderate-income persons have reached crisis proportions. National housing discourse may be focused on high-cost metros like San Francisco, New York, and Seattle, but residents in mid-size regions like Charlotte and Nashville are also having a more difficult time finding affordable homes. Just to our north, growing rents and home prices in Washington, DC and Northern Virginia force many residents to pay over half of their salary on housing and transportation alone.
When compared to other regions, the Richmond region remains a relatively affordable place to live. Nevertheless, we are not without major housing challenges. Rents and home prices are on the rise. Today, one-in-three households—more than 125,000—in our region are housing cost-burdened, meaning they must spend more than 30% of their gross monthly income on their mortgage or rent. Of those households, 52,000 face a “severe” cost-burden and must spend over half of their income on housing.
On the hierarchy of family needs, few things—if any—are higher than shelter. When providing shelter becomes a financial burden, households cut spending elsewhere in the family budget. That may mean skipping medication or a visit to the doctor; it may force cutting back on healthy food; or it may lead parents to cut out enriching extracurricular activities for their children. In this way, excessive housing costs ripple through the family budget and diminish everyone’s quality of life.
As might be expected, housing challenges are greatest for those at the lower end of the income range. With very limited ability to afford housing of decent quality, cost burdens for our very low-income neighbors are extremely high. Safe, stable, affordable housing is essential for these families to escape precarious positions. Housing is a necessary, foundational component for our goal to reduce poverty and create opportunities for all members of society to thrive economically.
A common theme in the community meetings and focus groups conducted to inform this Framework was confusion about what “affordable” housing actually is and who it serves. This was not surprising: affordable housing programs and policies are a web of complicated regulations and procedures spread across multiple layers of bureaucracy. Between tax credits, vouchers, block grants, and plenty of lengthy acronyms, most people understandably find it difficult to make sense of it all.
For the purposes of this report, “affordable” housing refers to a home, either owned or rented, where the household pays no more than 30% of their gross income on basic housing costs. Any household paying more than the 30% threshold is cost-burdened; when costs exceed 50% of gross income, the household is severely cost-burdened. This definition is used for its relative simplicity, and due to its common reporting in federal socioeconomic data, including the census.
We refer to housing that is part of, or is funded by, public assistance programs to serve low-income households as “dedicated” affordable housing. Dedicated affordable housing units are generally reserved for households earning 80% of the area median income (AMI) or lower, depending on the program. Dedicated affordable housing may be funded by a combination of federal, state, local, and private resources to keep costs lower than what the market would otherwise charge.
Spectrum of Housing Needs
Different households have different housing needs. The graphic below shows the types of housing that our region provides as a result of nonprofit, public, and private market activities. This “housing spectrum” is a useful tool for understanding the wide spectrum of policies required to provide housing options that are affordable and attainable across the Richmond region.
Spectrum of Housing Needs in the Richmond Region
Why Collaboration Matters
Housing markets and housing challenges cross jurisdictional lines. When PHA began to explore a housing framework for the region, one of its first actions was to form a leadership team that includes representatives from Chesterfield, Hanover, Henrico, Richmond, and Ashland. At its initial meeting, this group acknowledged the importance of working together on housing issues. In fact, some housing challenges cannot be addressed adequately without working across jurisdictional boundaries.
A good example of this is the need for coordinated planning to revitalize transportation corridors in the region. A corridor plan—especially one with a component that includes mixed income, affordable housing—needs to be consistent across boundaries. To not do so might increase the risk of failure in either jurisdiction.
Because Virginia is a Dillon’s Rule state where local governments are limited to powers explicitly prescribed by the state, localities may also work together in seeking legislative changes from the General Assembly to help address specific housing needs. Similar collaboration may help joint resource development with state agencies.
PHA has already demonstrated the value of regional coordination to state agencies for funding support—this Framework was supported by VHDA through an application that included the participation of all localities. This approach resulted in a substantially higher level of support.
By identifying collaboration as one of the values guiding the Framework, the leadership group positioned this effort for greater success and impact, than if jurisdictions pursued their own goals and priorities separately. Participants also agreed that they will collect information and share the results of initiatives that are implemented within their localities. In this way, everyone can learn from the experimentation and testing that will be an important part of our housing efforts in the region, as we move forward with this Framework.