Richmond has seen expansive growth over the last few years. Since 2020, more than 52,000 people have moved to the area, drawn by its charm, opportunities, and vibrant community. But with that growth comes a major challenge-housing affordability (WRIC).
The Rising Cost of Rent
Rent prices are climbing nationwide, and Richmond is no exception. In fact, our city ranks third in the country for the highest annual rent increases, with a 6.5% jump over the past year (NerdWallet). While this trend reflects the demand for housing, it also raises concerns about affordability for long-time residents and newcomers alike.
Creative Solutions for Housing Affordability
Tackling this issue requires a multi-pronged approach. Thanks to reporting by the Henrico Citizen, we know that input from both local governments and housing authorities is being focused on this issue. Some solutions proposed include delegating funds and resources to make fundamental changes and making land more appealing to purchase or renovate.
Daniel Walton, the Vice President of Housing Preservation Services, adds further insight and acolytes to the attention being given to the affordable housing crisis locally.
“I work with housing authorities, developers, non-profits, and municipalities across the country, and the challenges we face at home here in the Richmond market are not unique. How we respond to these challenges and the support system required to drive meaningful change requires creative solutions. I applaud Henrico County for creating an Affordable Housing Trust Fund to formally commit resources to the short and long-term development of housing products in one of Virginia’s most diverse counties.”
Below are creative ways to increase affordable housing supply:
- Public Housing Programs and Repositioning: Nearly every PHA in the country has a lengthy waitlist for units. Most PHAs also have considerable Restore-Rebuild authority, access to local political officials, and with the release of new PIH Housing notices, increased viability to reposition their public housing units to create a more stable rental structure. Additionally, PHAs can now utilize 9% of LIHTC programs to self-develop or co-develop the creation of new or renovated units. Section 18 offers pathways to address the aging housing stock by demolishing/dispositioning and replacing the troubled units. Ultimately, there are various options for local PHAs to improve and expand their unit offerings.
- City-Owned Land for Housing: Some municipalities donate land or offer $1 ground leases to encourage affordable housing developments. The challenge is ensuring the land is suitable for development, which could require flexibility and supplemental funding to remove existing buildings and improve infrastructure. The economic development benefits created by converting unused land to increase housing supply benefit local residents, employers, and the area’s tax base. A win for all!
- Zoning Reform: Adjusting zoning laws can create more opportunities for multi-family housing and mixed-use developments, increasing supply and stabilizing costs.
- Office-to-Residential Conversions: With changes to traditional in-person work options, some underutilized office buildings are being converted into housing, adding units without requiring new construction. Most urban office buildings have great walkability scores and access to public transportation. The challenge lies within the existing financial obligations as the NOI for a fully occupied office building is higher per square foot than residential, so the debt must be restructured. Lastly, some buildings are easier to convert than others. Fire suppression, fenestration, vertical transportation, and utilities can present challenges.
The Path Forward: Collaboration and Action
Solving Richmond’s housing challenges will take commitment from all stakeholders-residents, developers, and local government. The key is setting realistic, actionable goals and securing funding to make meaningful progress.
At the core of any solution is a simple truth: affordable housing requires municipal support, creative thinking, and a focus on action over discussion. By working together and embracing financing options, we can create a long-term development plan that benefits everyone in the community.
