Debate around statewide definition of affordable housing belies larger crisis

Long before the COVID-19 recession put millions of Virginians on the precipice of losing their homes, the commonwealth already suffered from the country’s worst eviction epidemic. After five Virginia cities landed in the top 10 of Princeton University’s Eviction Lab rankings in 2016, the data served as a clarion call to action for policymakers and local officials.

In the intervening four years, Gov. Ralph Northam has made reducing the rate of evictions across the state a priority. Since March alone the Northam administration has helped over 4,000 families to stay in their homes via the Virginia Rent and Mortgage Relief Program, provided $1.3 billion in CARES Act funding to localities’ eviction diversion programs and announced $4 million in grants to hire more lawyers to prevent families from losing their homes.

Although those actions and the governor’s repeated petitioning for a statewide eviction moratorium have grabbed headlines, an even larger structural problem with Virginia’s housing market has been looming in the background: the state’s worsening affordability crisis.

Underpaid and overburdened

In the state capital, the median sale price of a new home has risen by 56 percent over the last decade. Richmond’s median household income, on the other hand, has only gone up by 20 percent. The dearth in new affordable units coming onto the market is increasingly pushing city residents out of gentrifying neighborhoods and into the surrounding counties as the suburban housing stock ages and decreases in price.

According to the Partnership for Housing Affordability, “the number of persons in poverty in Chesterfield, Hanover, and Henrico grew by 110 percent [over the last decade]—far faster than in the City.” Although the trend in Greater Richmond may seem extreme, it is far from unique in Virginia. Since 2010 the median household income in the commonwealth has increased by just $2,549 while median home prices jumped up $72,000.

“Affordable housing is hands down the top priority for my constituents,” said Del. Sally Hudson, D-Charlottesville. “This is a community that is vastly unequal. We are one of the wealthiest cities in the state yet one in five families here in Charlottesville live in poverty. Our school board can’t retain teachers because they can’t even afford to live in town.”

Affordable for whom?

In response, last session Hudson introduced HB 1104—a bill which would have allowed localities to propose their own definitions of affordability and implement inclusionary housing programs. Sometimes referred to as inclusionary zoning, these programs incentivize the construction of affordable units via tax abatements, expedited review processes, the removal of parking minimums, fee waivers and density bonuses. 

Although the broader bill was referred to the state housing commission for further study ahead of the 2021 General Assembly session, Charlottesville received permission to pilot their own program. Elaine Poon, the managing attorney of the Legal Aid Justice Center, applauded the move. 

“Localities need the freedom to be able to do what they find appropriate because each locality has very different challenges that they’re dealing with,” she said. “Charlottesville is a great example of somewhat unique conditions. Development is happening here in a rather intense way: Land in town is expensive, but million dollar homes are going up all over the place.”

Due to the drastic disparities in housing markets across the state, Hudson believes local leadership must form the foundation of any solution for Virginia’s affordability crisis. “We’re trying to create a state code that can flexibly accommodate the many different communities across the commonwealth, all with very different problems. There is a stark difference between aging housing being taken over by students in Charlottesville versus Petersburg desperately trying to incentivize development. My hope is that the state code can set the floor and local legislation can say the sky’s the limit.”

One definition to rule them all

That’s why a resolution from the other side of the aisle also in front of the Virginia Housing Commission last month made such a stir. HJ 67 by Del. Robert Orrock, R-Caroline, instructed the state to “examine the current usage of ‘affordable housing’ in the Commonwealth and…make any recommendations regarding uniformity or statewide standards as appropriate.”

Advocates for greater local control fear one definition of affordable housing for the entire state could restrict localities ability to experiment, thereby hampering fledgling efforts to boost supply. 

“A statewide definition would have to be so broad as to be useless because what’s affordable in Martinsville is so different from what’s affordable in Arlington due to the vast wage disparities,” said Brian Koziol, executive director of the Virginia Housing Alliance. “A state definition would almost have to include some variation, but even average median income (AMI) as a regional number can create problems.”

Whether to define AMI at the regional or local level ultimately proved one of the nails in the casket of Navy Hill — a downtown redevelopment project led by Dominion Energy CEO Tom Farrell which Richmond Mayor Levar Stoney strongly supported. By using the figure for Central Virginia rather than specifically the City of Richmond, the roughly 480 “affordable” units proposed would have been rented for the same amount as other market-rate units under construction downtown. Those suspicious that developers are behind the push for a uniform definition of affordability may wind up crestfallen. 

“I don’t know that defining affordable housing is something that’s going to move the needle on the issue or is even necessary at this point,” said Andrew Clark, vice president of government relations for the Home Builders Association of Virginia. “We already know generally what affordable housing is: making sure that people across the income spectrum—but specifically people below 80 percent of AMI—aren’t spending more than 30 percent of their income on housing. That definition has been universally accepted since the 1930s.”

Although Clark generally agrees with Hudson’s more flexible approach to the issue, he doesn’t trust every Virginia locality to act in good faith. “You do want to have some parameters and guardrails so this won’t be used as a tool to inhibit growth,” he said. “Giving such broad enabling power is kind of concerning because you don’t know what will come out on the local side. There are definitely localities that are working on cutting back sprawl, promoting density, and boosting affordability, but there are other localities where transit oriented development is still a bad word.”

The color of a crisis

As the increasingly mainstream Black Lives Matter movement has pushed once controversial issues such as police reform to the forefront of political debate, so too has it pushed often third rail topics like single-family zoning and residential segregation into public debate. “For far too long local desires were vested in maintaining white supremacy,” said Koziol. “Still today that tone is just below the surface. Affordable housing still gets lumped into the concept of public housing, and that’s layered with all kinds of racialized thoughts.”

Rather than dodging the awkward connection between supposedly color-blind zoning and de facto segregation, a new generation of advocates are confronting the issues head on. “Housing is a racial justice issue,” said Poon. “Many neighborhoods across the state aren’t even open to affordable housing development due to the legacy of segregation, so if we can break open that box on where we place affordable housing, we can begin to build more inclusive communities.”

While such talk may have rang radical a few years ago, today even the Northam administration recognizes the vast inequities in the Commonwealth’s current housing market. “We need to address the scar of redlining on wealth inequality and disparities in homeownership for whites and people of color,” said Erik Johnston, director of the Department of Housing and Community Development. “What’s so important about housing policy is that it needs to be comprehensive. Every Virginian needs a safe, quality home to live in.”

Despite her bill’s technical nature, Hudson hopes the public will give HB 1104 the broad support it needs to pass this coming year. “Sometimes the challenge for affordable housing policy is that it’s easier to rally behind calls to ‘cancel rent’ because it’s an important but blunt idea. Developing long-term, sustainable solutions to housing doesn’t easily fit on a bumper sticker.”

Virginia is for YIMBYs

One group ready for technocratic solutions are the home builders. “Some people think our members are this hegemony of builders who only want to build single family large lot mansions, but honestly most developers realize the demand in the market is for first time homebuyers and people looking to downsize,” said Clark.

Beyond upzoning and allowing accessory dwelling units like in-law suites and granny cottages by right — two proposals from Del. Ibraheem Samirah, D-Fairfax last year that earned him equal measures praise and vitriol, Clark hopes a bill to create a Virginia Housing Opportunity Tax Credit program could get a second chance in front of the General Assembly in 2021.

Since its establishment in 1987, the federal Low-Income Housing Tax Credits (LIHTC) program has helped bring over 3 million affordable units onto the market. While much of the housing community agrees that a Virginia version of the program could prove a game changer, anti-poverty advocates like Poon caution that tax credits aren’t a silver bullet.

“If we do a state LIHTC [program] we need to be sure we build in protections for tenants. We also need a long-term rent stabilization policy and housing vouchers. Our long game is to try and prevent another eviction crisis like the one we’re experiencing now. This problem really does need a federal solution, but in the meantime the state can step in to fill the gap.”