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What Is Affordable Housing?

The Highland Grove mixed income housing development on First and Dove Streets replaced run down public and private apartments.
The Highland Grove mixed income housing development on First and Dove Streets replaced run down public and private apartments. The current rate for many two bedrooms is about $750/month. (Photo: Louise Ricks.) Louise Ricks/WCVE

Across Virginia, an increasing number of families are spending more of their income on rent and mortgage payments. Advocates and non-profits often talk about the need for more affordable housing. But how is that defined and measured? In our new series Where We Live, WCVE’s Catherine Komp has more.

Learn More: Find Housing Virginia’s affordability data and calculators, the Market Value Analysis by Reinvestment Fund, VCU's study by the Wilder School Center for Urban and Regional Analysis on the jobs to housing imbalance, NLIHC's housing and wages interactive, the Center for Neighborhood Technology’s Housing and Transportation affordability index, and the Urban Institute's extremely low income affordability map.


Realtor Ernie Chamberlain has seen a lot of changes in the Richmond housing market.

Ernie Chamberlain: Generally speaking, there are fewer homes for sales, the prices are higher, the interest rates are higher.

When Chamberlain got into real estate in 2015, it took about six months to turn over their inventory.

Chamberlain: And today that number is closer to three months.

When the market’s competitive, prices go up.

Chamberlain: Alright, off we go.

Chamberlain’s taking me on a tour to get an idea of these changes. We’re driving through Church Hill, near Venable and Fairmount.

Chamberlain: A year or two ago, you could have bought something for $200,000, today there’s stuff selling over there for $300,000, it’s a huge jump.

Going North to Barton Heights and Highland Park, prices are going up too.

Chamberlain: The reason we’re going down Carolina is you can see renovated home, non-renovated home…

The block is lined with Foursquare style homes, built around 1915-1920, with columns and ample porches, many valued under $200,000. On the corner, two mirror image, new construction townhomes stand out.

Chamberlain: That’s under contract, listed at $400,000. 

He says you can still find homes for half that amount nearby in neighborhoods like Chestnut Hill. Working with George Real Estate Group, Chamberlain also represents buyers who qualify for affordable housing programs, like those through Project Homes and the Better Housing Coalition.

Chamberlain: I can’t tell you how many Project Homes houses we’ve sold to nurses and social workers. For whatever reason, they seem to make around $40, 41, 42,000 and they haven’t bought a house and it’s the perfect situation for them.

A common standard of affordability is that you shouldn’t spend more than 30% of your income on housing. Using $41,000--the median household income in Richmond--you’d spend no more than $950 on rent to avoid being “cost burdened.” If buying, you’d keep the house purchase price under $170,000, but this measurement has its limits.

Ira Goldstein: Frankly, there's a lot of flaws in that logic.

Ira Goldstein is with the Reinvestment Fund, a national organization that works to build wealth in low-income communities. He uses an example of a family of four that makes $25,000 a year.

Goldstein: So if they're spending, let's say $7,500 or $8,000 that leaves $16,000 left to do everything else that they need.

Like buying food, paying for utilities, medical bills and car repairs. Goldstein and other researchers spent time in Richmond last year to prepare a Market Value Analysis commissioned by the Richmond Memorial Health Foundation. They’ve done these in dozens of cities who use the detailed research to help inform affordable housing strategies. In Greater Richmond, they found a growing number of cost burdened households.

Goldstein: The most inexpensive part of the Richmond area market is substantially more expensive than the least expensive parts of either Pittsburgh, Akron or frankly Philly or Baltimore or other places that we've worked that puts a fair amount of financial stress on people.

Using data from 2011-2015, the analysis shows nearly 75% of owners making less than $35,000 were cost burdened. That goes up to nearly 84% for renters. In the next income bracket, $35,000-50,000, nearly half of owners were cost burdened, and about 40% of renters. An estimate by Housing Virginia finds more than 150,000 people in the region are cost burdened.

Goldstein: I think these cost burdens in regions really begin to sort of create stressors. I think that they adversely affect the populations that are resident within them. I think for those whose means are most constrained, it really does impair their ability to meaningfully participate in the region's economy. And I think even at the higher level it impairs people's ability to meaningfully participate.

The 30% measurement has another shortcoming: it doesn’t evaluate where housing is located. Fabrizio Fasulo and other researchers looked at this for VCU’s Wilder School Center for Urban and Regional Analysis.

Fabrizio Fasulo: And we found that there is a deep imbalance in the region overall and also in each jurisdiction between where you have affordable housing stock, which is reducing by the way more and more as we talk, and on the other side where your jobs are.

A good example is the Innsbrook Short Pump area, which has about 18,000 modest-wage jobs, but about 10,000 low cost housing units. Looking at the larger Central Virginia region, the study estimates a gap of about 44,000 affordable housing units. Expanding transportation is one solution, but Fasulo says it’s also important to plan economic development within lower-income communities.

Fasulo: I know there is some work that's been done on the city level and also in the surrounding counties, but we need to do more.

Researcher Jonathan Knopf with HD Advisors defines affordable housing two ways. One he calls "Capital A affordable" housing which uses government subsidies, like grants or tax incentives for builders or vouchers for residents.

Jonathan Knopf: The second kind of affordable housing, I like to call "Lowercase A affordable," which is affordable because of existing market conditions. There is no subsidy that goes into it.

Another example, he says, is mobile or manufactured home communities.

Knopf: Where the housing is very low-cost but also very low quality and there is no subsidy that goes into mobile home parks in this country, but it is often one of the few sources of naturally occurring affordable housing that that we see today.

Today’s market is driving prices up, while wages remain stagnant. Using a housing calculator from the National Low Income Housing Coalition, you’d need to make $17 an hour to afford rent on the average one-bedroom apartment in Greater Richmond. If you made minimum wage ($7.25), you’d have to work 96 hours a week to afford that one bedroom. Bob Adams is a principal at HD Advisors and has worked in affordable housing for nearly 40 years.

Bob Adams: In some sense, we all need affordable housing and we all need to be able to have stable housing, a roof over our head at a cost that does not overly burden our income whatever that may be.

Adams says when addressing affordability, it’s important to recognize the wide ranges of needs, from those who are homeless to families who need a bit of support to buy their first home.

Adams: So we need to have a diverse and robust range of forms of housing assistance that can help at all of those levels to achieve real affordability for a broad swath of our population.

Through the decades, Adams has seen the language of housing change.

Adams: When I started into this business, we talked about public housing, low income housing.

That evolved to “affordable” housing and more recently, “workforce” housing.

Adams: Oftentimes when I'm talking to groups, I skipped the adjectives and I just talked about housing, because housing is something we all need. The affordability of it goes with whoever you are and whatever your resources are.

Knopf: I will add that affordable housing is an easy term to use because it refers to a quantitative measure of affordability: whether or not a family is spending 30% or more of their income on housing. So, it's very easy to define in the policy realm what affordable actually means, at least at the federal level.

But there is a shift, he says, to talk about housing in other ways, like safe and secure.

Knopf: Which resonates more on a qualitative wavelength with more people, because while some people may not need “affordable” housing--they may have incomes that are sufficient enough to find housing on the market that meets their needs--everybody in one way or another understands the importance of having a safe and secure home to go to at night. So, I think we are finding some more success with using terms on that are more qualitative to actually describe the impact of a high-quality home on a person's life.

Next week we continue our series Where We Live, when Megan Pauly takes a look at Richmond’s plan to protect and expand the city’s stock of affordable housing. For Virginia Currents, I’m Catherine Komp, WCVE News.