Rent in all but five Virginia counties increased in a 10-year period, according to a Capital News Service analysis of U.S. Census Bureau gross median rent estimates.
The average percent change statewide in rental costs was 24%.
More than 60% of Virginia renters experienced rent increases this year, according to Richmond Mayor Levar Stoney’s resolution declaring housing affordability a crisis in the city. Low housing inventory will continue to drive rent and mortgage costs up statewide, according to the resolution.
That means employees who barely earn minimum wage are burdened with finding affordable housing near school and work. Virginia minimum wage currently stands at $12 an hour and will increase by $1.50 an hour in January 2025, according to state law.
Del. Marcia Price, D-Newport News, represents approximately 80,000 people, she said. She introduced several bills this past session to help address housing issues, such as House Bill 1650, 1651 and House Joint Agreement 485.
Price’s biggest goal as a representative of Newport News and Hampton is to “eradicate economic disparities,” she said.
“We have homelessness and mansions in the same district,” Price said. She wants to ensure that residents have basic human needs met.
“The fact that we have jobs that don’t pay livable wages I think is the starting point,” Price said.
People don’t earn enough money to make ends meet, according to Price. That, coupled with the additional problem of inflation, contributes to the housing crisis.
A long established government standard to estimate housing affordability is the 30% rule. Anything over that is considered “housing burdened.” Anyone spending more than 50% income on rent is considered “severely burdened,” according to the policy and research arm of the U.S. Department of Housing and Urban Development.
The Virginia median monthly rental cost is $1,326, according to the 2021 U.S. Census Bureau estimates. But rent can be much higher in some areas of the state. Thirty percent of the annual rental cost would be close to $16,000 annually, based on census data. The estimation does factor in some utility costs.
Public servants, teachers and firefighters are examples of professions that are often unable to rent in places where they work, specifically in Newport News, Northern Virginia and Richmond, according to Price.
The top 10 occupations with the most employees in Virginia range from fast food workers to software developers, according to the U.S. Bureau of Labor Statistics data. But, of those 10 occupations, only three can comfortably afford the median rent based on 30% of their income.
A fast food employee earns an annual mean wage of just over $25,000, so they will spend about 60% of their income on rent, based on the statewide gross median monthly rental estimate of $1,326.
Restaurants were in the top five professions in the Richmond area in 2022, according to BLS occupation statistics. The work force is approximately 50,000 people. That includes jobs such as bartenders, chefs, cooks, dishwashers, hosts and servers. The mean annual income for the occupations is just over $30,000, according to the BLS.
William “Mac” McCormack owns three restaurants: McCormack’s Irish pub, McCormack’s Whisky Grill and McCormack’s Big Whisky Grill.
McCormack opened the pub in the Shockoe Bottom area of Richmond 25 years ago, he said. Richmond did not have a booming real estate market at the time, and rent was not considered expensive, he said.
“I keep hearing the costs are getting higher and higher and some of them are having to move further away from the city just in order to live,” McCormack said.
The bar is popular among restaurant industry employees who may want something to eat or drink when they are done with their shift, he said.
“I feel like the idea of having a one-bedroom apartment at this point for someone who works in the [restaurant] industry, is tough,” McCormack said.
McCormack feels confident his employees earn a liveable wage despite climbing real estate costs, he said.
“I’ve always made it so that people can afford to live,” he said.
It took increasing his employee’s salaries to make it work, he said. McCormack increases his workers wages based on performance, according to the restaurant owner.
To help renters and reduce the housing crisis, minimum wage needs to increase, Del. Price said.
“Right now, it’s kind of like a perfect storm where forecasters are saying it's gonna get worse before it gets better,” Price said.
More affordable housing is needed, along with a decrease in corporate price gouging, she said. Developers also need incentives to create more inclusionary housing.
Inclusionary housing is a program that incentivizes developers to sell or rent a percentage of their properties to low-income residents. Incentives can include tax abatements and reductions, or the right to build at higher densities.
“Doing a better job of enticing developers who want to make a difference — as opposed to just wanting to make money — and giving them more projects to work on,” Price said.
