New data shows that Richmond is in a pretty sorry spot when it comes to aligning housing prices with wages.
Photo by: Sky Noir
An annual housing affordability report from the Richmond-based Virginia Housing Alliance and the National Low Income Housing Coalition puts into numbers what some in Richmond may be feeling. According to the report, a worker earning minimum wage–$7.25 an hour–would need to work 104 hours every week to afford a two bedroom apartment in the Richmond region. That’s actually better than the statewide average (124 hours).
Housing affordability can be a tricky subject to tackle, despite its importance in a growing city. Affordable housing is frequently discussed in terms of rents. Low rents are affordable; high rents are unaffordable. But the income side of the affordability equation plays an equal role in determining what kind of housing is available to a person or family. With a high enough income, everything is affordable. Or, a minimum wage income may not be as troublesome if the earner also has a $377 rent.
The annual “Out of Reach” report bridges the two sides of the equation by framing housing costs in terms of hourly wages and annual salaries. It calculates a “housing wage,” or the hourly pay a full-time worker would need to earn in order to afford a two bedroom rental unit at fair market rent.1 Virginia has the eleventh highest housing wage in the country at $22.44.
In Richmond, the housing wage is $18.58, which translates to just over $38,640 annually. Renters earning a $38,640 salary should be able to afford a standard quality two bedroom apartment in the City. But estimates from the report put the median income of Richmond renter households at $29,278, or about 76% of the calculated housing wage.
In short, there’s a mismatch between incomes and rental housing costs in the City.
The report’s data is available at the National Low Income Housing Coalition’s website.
- Fair Market Rent is a calculation made by the U.S. Department of Housing and Urban Development that estimates the 40th percentile total rent and basic utilities of all standard quality rental units. That means approximately 40 percent of standard quality rental units cost at or below the fair market rent. The 2016 Fair Market Rent for a two bedroom apartment in the Richmond region is $966. ↩