As Virginians struggle with rising rents and housing affordability, the state’s housing finance agency is making fewer loans. What gives?

In certain parts of Virginia, affordable housing either already is or is quickly becoming out of reach.

Northern Virginia’s lack of affordable housing is an ongoing and already well-known problem. Often regarded as the state’s economic powerhouse, this bustling region is beset by an imbalance in residents’ wages relative to home prices and rents. The wage-to-housing price ratio is so off that many parts of NoVA are actually losing population as workers move to more affordable regions.

But this problem is far from confined to one region; in fact, home prices are reportedly outpacing wage increases across most of Virginia.

Roanoke is “looking at a number of zoning changes” to help boost housing availability; a study commissioned by the city estimates that some 4.500 additional housing units are needed to address the area’s demand.

Virginia Beach is also considering zoning reform, as well as tax abatements, density bonuses, and grants to increase that city’s housing supply.

Some renters in the Richmond area, where rents have gone up “drastically,” are addressing rising costs with direct action.

New Virginia Majority, a political and community advocacy group, recently organized a rally for residents of the Southwood Apartment complex, where many residents’ rents are spiking hundreds of dollars per month – with some almost doubling.

The rent increases, which impact all Southwood tenants, include up to a $150 monthly increase for a one-bedroom and up to a $250 jump for larger units.

Many of the complex’s residents live at the poverty line, and they see the rent hikes as predatory. But Mark Hubbard, a consultant for the rental complex, maintains that the rent increases are not extraordinary.

“I think it would be hard to find a complex that’s not raising rents, and our fees are extremely competitive for the market,” Hubbard said.

Southwood happens to be the city’s largest Latino neighborhood, and this apartment complex has a long history of poor living conditions and inadequate services. In 2021, the Richmond Times-Dispatch investigated the situation as residents of Southwood relayed accounts of being exposed to mold, mice, and roaches.

According to Hubbard, the complex has since spent millions to make necessary maintenance repairs, and tenants said they saw improvements to their homes. But some residents still face serious issues with the quality of their housing.

Jorge Figueroa, a five-year tenant who received notice this month that his rent will increase drastically, said there is mold in his bathroom, the sink drains are rusted, and his floorboards are cracked and broken.

“The issue with the apartments is that they’re not getting the proper maintenance and there’s a lot of inhumane conditions,” Figueroa said.

The recent rally to protest the spiking rents drew more than 50 tenants, local organizers, and union representatives. New Virginia Majority organizer Sofia Vega said they hope to bring attention to the issue and help residents find ways to ease their financial burdens.

As if the rental market situation isn’t doing enough harm to housing affordability, the Virginia Housing Development Authority (VHDA) recently announced that it expects to make only about half as many loans in 2023 as it did the previous year.

The VHDA is a not-for-profit organization created by the commonwealth in 1972 to help Virginians obtain “quality, affordable housing.” Virginia Housing provides mortgages, primarily for first-time homebuyers, and works with lenders, developers, local governments, and community service organizations “to help put quality housing within the reach of every Virginian.”

According to VHDA programs director Tammy Neale, high interest rates and the limited housing supply across the state have cut prospective borrowers’ interest in loans for single-family homes. Interest rates and reduced funding for mixed-use projects that combine apartments with commercial space have also reduced developers’ interest in obtaining loans for rental properties.

These factors have reduced the VHDA’s loan total from $2.67 billion last year to $1.29 billion in fiscal year 2023. Next year, the total is expected to fall to $1.13 billion.

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