RICHMOND, Va. (WRIC) – Over the past decade, Richmond has become a majority rent-focused home market. Approximately 58% of households in the city rent, and 43% of both renters and homeowners in Richmond spend a third or more of their income on housing. Housing Forward VA considers any household contributing more than 30% of their income to housing to be “cost-burdened.”
Jonathan Knopf from Housing Forward VA told 8News the reason the housing market is so rent-focused is due to a variety of factors, including “more multifamily buildings in the City than suburbs.”
“The city’s demographics are younger and less white – two populations which have structural challenges preventing them from owning,” he explained adding that the presence of Virginia Commonwealth University as an “anchor institution” brings in short-term residents.
According to data from Housing Forward VA, the median rent in Richmond increased from $840 in 2010 to $1,080 in 2019. When broken down by apartment size, $1,020 is the fair market rent of a single-bedroom apartment. For Richmond families, a two-bedroom can cost up to $1,200, and three bedrooms can cost upwards of $1,500, according to data compiled by Virginia Housing.
Ben Teresa, a professor at L. Douglas Wilder School of Government and Public Affairs at VCU and co-founder of RVA Eviction Lab, spoke with 8News on the Richmond housing market.
“Over the past decade, rents have increased for renters faster than incomes,” said Teresa. “So rents have increased over those ten years by about 10% while incomes have increased by about 5%.”
According to Teresa, rents haven’t been raising fastest in the most expensive neighborhoods, instead of in the neighborhoods that are already facing the greatest instability – the southside, east end and northside predominantly. These neighborhoods face extremely high eviction rates, placing Richmond with the second-highest eviction rates in the country, according to Princeton Eviction Lab.
“For part of 2020, in the middle of the pandemic, the worst of the pandemic, rents were not increasing, or even falling in certain places,” said Teresa. “The areas that suffer the worst from housing instability, high eviction, increasing rents, the rents there actually didn’t go down. They went down in places, like in Richmond where there was a lot of new construction like Scott’s Addition and Manchester.”
Both RVA Eviction Lab and Housing Forward VA emphasize that city-wide averages are less relevant than data broken down by neighborhood.
“As we track city-wide averages, they may obscure more nuanced rent trends by neighborhood, race/ethnicity, type of apartment, etc.,” said Knopf.
The next phase of the pandemic means the likely end of the eviction moratorium and emergency aid for families who have fallen behind on housing costs. Teresa told 8News that 10-15% of Virginians fell behind on rent during the pandemic.
“So if we think that what’s happening in the state is similar to Richmond… that’s a significant number of renter households. Probably on the order of 5,000 households that are not able, and that’s probably a low estimate,” said Teresa.
Knopf stressed his concerns for the end of emergency aid. “If the moratorium does end and evictions resume significantly, more Richmonders will find themselves a) possibly homeless, and b) limited in the type and location of housing that will accept them now that they have an eviction on their record.”
As for the cost of rent moving into the next phase of the pandemic, both Knopf and Teresa expect the rental market to resume its pre-pandemic trajectory.
“I expect rents to keep climbing at about the same pace they have been over the next few years,” said Knopf. “Barring some other major crises or economic downturn, Richmond will continue to be a popular place to live and move to, especially as a less-expensive alternative to DC. That means demand will keep ticking up – the question is whether we will keep adding new supply.”
RVA Eviction Lab hopes that in the wake of the pandemic, emergency aid could continue into more permanent programs to help renters.
“Virginia has done more than many other states in terms of providing rental assistance for people who lost jobs related to COVID,” said Teresa. “And I think we can expect, unfortunately, to resume the levels of instability, rising housing costs, and rising levels of eviction that were pre-pandemic.
“The hope is though that we can build on some of the emergency interventions and protections to stabilize housing for more people after the pandemic rather than just resume what was the status quo before.”