RICHMOND, Va. (WRIC) — Inflation reached a new 40-year high in June, according to a report released Wednesday by the U.S. Bureau of Labor Statistics, making pre-existing challenges for tenants in and around Richmond more severe.
Virginia Commonwealth University (VCU) Associate Professor of Economics Chris Herrington told 8News that the spike, which is somewhat expected, was led by energy price increases. With the costs of gas dropping in recent weeks, though, he said the July numbers could show some improvement.
But Martin Wegbreit with the Central Virginia Legal Aid Society (CVLAS) said that many renters are struggling to keep up with rental payments, with apartment costs increasing even faster than inflation.
“If it is private housing that has no government support at all, then there is no limit,” he said. “There is no rent control in Virginia, and the limit is only what the free market will allow, and free markets are not always fair markets.”
Data from rental listing site Apartment List showed that from March 2020 to May 2022, city-level rent estimates increased significantly throughout Virginia. In Glen Allen, rent grew approximately 19.5%; 25.3% in Richmond; and 26.8% in Chester.
“The issue is that we have had a neglective housing policy for decades,” Wegbreit said. “The issue is that we have not invested enough in affordable housing, and that’s why so many people are simply unable to afford the rents. That’s why so many people have what we refer to as ‘rent burden.'”
According to a 2021 study by Virginia’s Joint Legislative Audit & Review Commission (JLRAC), approximately 44% of renting households were cost-burdened in 2019, meaning more than 30% of their income was being used for rent.
“The inflation that we’re seeing, the rents going up faster than inflation is compounding an already-existing problem where it was already difficult for people to pay rent just because of that rent burden,” Wegbreit said. “This is very close to an emergency situation in Richmond.”
Herrington noted that new construction nationwide is at its highest rate since the 1970s, something that can be observed throughout Central Virginia. But it takes time for units to become available, especially amid persisting labor shortages and supply chain issues.
“Richmond, right now, has the second-lowest vacancy rate in the entire country for a large metropolitan area. So we’re at 1.1% vacancy rate, and that does not give tenants options, other than, as I said, possibly doubling or tripling up, or moving much father out where the rents might be less,” Wegbreit said. “I would urge public officials to realize the gravity of the crisis and to do something.”