Connecting the Dots: The Link between Poverty and Affordable Housing

Alice Tousignant, LWV-VA Housing Study Chair

People who wait on you at restaurants and care for seniors and people with disabilities earn about $9.50 per hour, while those who clean stores and offices pull in $11.50 and those who assist teachers make $12.50 an hour. All of these workers are considered very low income using the statewide income limits for Virginia for a one-person household– $31,000. What can they afford for rent? Housing is considered affordable if you don’t spend more than 30% of your income on it.

Every year, the National Low Income Housing Coalition (NLIHC) releases its Out of Reach (OOR) report, which documents the gap between renters’ wages and the cost of rental housing across the US. In order to afford a modest one-bedroom apartment in Virginia, you would need to work 109 hours per week at the State’s minimum wage of $7.25. The average US Department of Housing and Urban Development (HUD) Fair Market Rent (FMR) for a one-bedroom apartment in Virginia is $1,025 per month. In order to afford this rent, you must earn $19.70 an hour or $40,981 a year. None of the workers mentioned above could afford the average one-bedroom apartment in Virginia. These numbers differ substantially depending on where you live in Virginia: Arlington – $1,454, Richmond City – $932, Blacksburg – $759, and Giles County – $529 for a one-bedroom apartment. To obtain data specifically for your area, click here, scroll to Jurisdictions, and plug in your city or county.

If you pay more than 30% of your income on housing, you are considered cost-burdened. The lower your income, the higher the cost burden, making it difficult for persons earning low wages or those on fixed incomes to pay for basic necessities such as food, medicine, and transportation. While the very low-income earners mentioned above would pay more than 30% of their income on rent, 69% of extremely low-income households ($18, 650 annually for a one-person household) pay more than 50% of their income for housing according to the NLIHC.

Extremely low-income people have the most difficult time finding available and affordable housing in Virginia. NLIHC also publishes a GAP report showing the shortage of affordable homes in the US. This report shows that there are only 36 available and affordable rental units for every 100 extremely low-income households in Virginia.

While an increase in the minimum wage would certainly help remedy some of this housing problem, it is not the only answer, especially for low wage earners and for those on fixed incomes such as Supplemental Security Income, which is currently $771 monthly.

What are the most effective solutions to this housing shortage? One answer is the State-funded Virginia Housing Trust Fund (VHTF) which provides low-interest loans to preserve and build housing as well as homeless reduction grants. Since its inception in 2014, the VHTF has provided over $26 million to create/preserve over 3,000 units of affordable housing with approximately 67% of these rental units for very low-income households.

In his budget, Governor Northam has proposed a large increase for the VHTF with $84 million over the next three years. The General Assembly will take up this recommendation when they convene in January for their 2020 session. These funds would go a long way to creating housing for Virginia’s most vulnerable citizens. Since the LWV-VA does not yet have a position on affordable housing, the League cannot take a formal position on supporting this budget item. (The Affordable Housing Study Committee is working on this issue which we hope will culminate in a State housing position at the 2021 League Convention.) In the meantime, if you feel this issue is important, you are encouraged to personally advocate with your legislators in the General Assembly.