'A problem for all of us'

Renters in Henrico County have few viable pathways to become homeowners in the county, because their average annual income levels are about $12,000 below than what is necessary to purchase the average-priced Henrico home, according to a recent study from the Partnership for Housing Affordability.

And, the study found, the gap between the household income levels of homeowners and renters in the county has continued to grow in recent years – reaching nearly $46,000 in 2020 ($93,965 for homeowners, $48,081 for renters).

Factor in the housing crunch that followed the onset of the COVID-19 pandemic, and the situation for renters in Henrico has become even more dire recently: the average asking rental price in Eastern Henrico rose by 27% between March 2020 and late 2022 (to $1,225 per month), while it jumped 30% in the West End during the same timeframe (to $1,327 per month), according to the Richmond Regional Housing Framework 2020-2022 Data Update.

Complicating matters further: affordable housing in Henrico remains in short supply. In 2018, the county experienced a rental shortage of more than 12,000 units for households earning less than 80% of the area’s median income, the study found. And the median cost of a home in Henrico skyrocketed by 37% from January 2017 to September 2022, reaching a peak of more than $371,000 in July 2022.

As its name indicates, the study (released late last month) was an update of the initial four-part Richmond Regional Housing Framework report published by PHA in January 2020 that examined housing in Henrico, Chesterfield, Hanover and Richmond.

The update concluded that the region is expected to grow by nearly one-third between now and 2050, with Chesterfield and Henrico experiencing the bulk of that growth. Henrico is projected to grow by nearly 89,000 residents (or by about 26%) during that time, it found.

But before those new residents arrive, the region will need to address a growing challenge of housing the ones who are already here. The study concluded that the lack of affordable housing – particularly affordable rental units – is a significant problem regionally, especially for the working class.

“Many of the most common workers in the region — including office administrators, stockers, and retail and restaurant workers — cannot afford average rents on their own,” the study’s authors wrote.

The number of cost-burdened renters in the region (primarily those who earn between $35,000 and $75,000 annually) grew by almost 1,900 in recent years, the study found.

Overall, the highest sectors of housing growth in Henrico between 2016 and 2020 were people without children (either empty-nesters or young couples) and non family households (people living alone or with roommates), according to the study. Non-children households in the county grew by 2,016 between 2016 and 2020, while less than a quarter of all recently formed households in the county during that period were families with children.

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With the study’s release as a backdrop, PHA hosted its State of Housing in the Richmond region event Jan. 26 at The Westin Hotel in Henrico, bringing together several hundred attendees and housing stakeholders from throughout the metro region.

Keynote speaker Jenny Schuetz, an author, urban economics and housing expert and senior fellow with Washington, D.C. public policy nonprofit Brookings Metro, told attendees that the need for housing is a growing challenge nationally, with as many as 4 million new homes needed just to meet current demand.

She suggested that more localities need to loosen housing restrictions to allow for the construction of smaller and more diverse housing types, like duplexes and other affordable options in more densely populated areas that don’t require vehicular transportation. She also suggested the construction of densely populated communities around transit or train stations, where possible.

The poorest 20% of people spend more than half their monthly incomes on rent, she said – while too many children are growing up in inadequate housing, which affects their abilities to learn and grow.

“This is not just a problem for poor people themselves – this is a problem for all of us,” she said.

Bon Secours Richmond Market President Mike Lutes agreed, telling attendees that the impact of housing on a person’s health cannot be understated.

“In fact, we believe conditions of housing and neighborhoods are one of the single most important predictions of one person’s health,” he said, “and so in a very real sense, housing is health.”

Housing accessibility also creates and depends racial wealth gaps, Schuetz said. Home ownership is the primary way most people and families build wealth from one generation to the next, but Black and Latino families typically have less home equity than white and Asian families, in part because of a lack of widespread accessibility to home ownership historically.

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During a panel discussion with officials from Chesterfield, Richmond, Hanover, Ashland and the Richmond Regional Housing Authority, Henrico County Community Revitalization Director Eric Leabough told the crowd that housing affordability and housing for senior citizens are the county’s two biggest challenges today.

The so-called “grey wave” has continued in Henrico in recent years, with the county’s senior population growing by more than 6,660 between 2016 and 2020.

The growth of that population here has created several related challenges, Leabough said. Seniors who want to downside to smaller homes can’t do so because the types of homes they seek are in short supply or don’t exist. And when they aren’t able to make those moves, the larger homes they remain in aren’t available for families looking to upgrade, which in turn means that starter homes aren’t available for young people looking to buy their first homes.

It’s a cycle of housing gridlock.

“We need to bring more affordable units online at a quicker rate,” Leabough said.

Between 2016 and 2020, the county witnessed a growth of more than 700 citizens who face challenges living independently (about half of whom were between the ages of 65 and 74 and more than a third of whom were 35 to 64). Housing with wrap-around services, modifications to homes and accessory dwelling units would serve those people in valuable ways, according to the report.

The latter (sometimes called mother-in-law suites) are permitted in Henrico by law. Accessory dwelling units are self-contained spaces within or adjacent to an existing home that can function independently of that home. They can provide a way for seniors, for example, to live with their adult children.

Leabough suggested that the county is working to inform stakeholders about the benefits of these units.

“We need to make sure the development community and homeowners are educated about what the process is like and what they need to do to implement it,” he said.

Another challenge facing the county: people who are using substandard hotels as permanent housing. Henrico is working to help move as many of those people into permanent housing as it can, but the effort is not a quick one.

In an effort to address the need for affordable housing throughout the region, the Richmond Redevelopment and Housing Authority this week formally relaunched the Richmond Development Corporation, an regional effort that also seeks to provide economic development and job-creation opportunities.

RRHA Chief Executive Officer Steve Nesmith told attendees at last month’s event that his organization would use housing revenue bonds and tax increment financing (or TIF) bonds in an attempt to spur “transformational change” in the region.

"We cannot solve the problems of economic development, transportation and jobs without engaging with our regional partners and getting around these sealed boundaries,” he said.