This post was written by Michelle Krocker, Executive Director in partnership with Brian Koziol, Executive Director of the Virginia Housing Alliance.

Does the market build housing for low- and moderate-income households, seniors on fixed income and persons with disabilities? Is the market serving small, rural communities that are desperate to replace their poorly maintained, older housing stock with affordable, energy-efficient new construction? These are the questions we would pose to Governor Glenn Youngkin after his recent presentation to members of his Cabinet during a joint session of the Senate Finance and House Appropriations Committees.

In his comments the Governor stated, “If we are serious about the rising cost of living in the Commonwealth ... then we are going to have to get serious about the cost of the places in which we live. The solution to this problem is not more subsidies or loan programs [emphasis added]. Instead, we must tackle the root causes: unnecessary regulation, overburdensome and inefficient local governments, restrictive zoning policies and an ideology of fighting tooth and nail against any new development.”

Though regulatory and zoning reform are critical components to bring more affordable homes online, our collective experience in housing and community development has demonstrated the necessity of more public sector investments in housing. We direct the Governor’s attention to HB854 Statewide Housing Study: Current Efforts, Future Needs, New Strategies, which is the product of nearly two years of collaboration among government, private sector, nonprofit, academic, and community stakeholders to examine the state’s housing needs, evaluate the impact of current initiatives, and propose new recommendations for increasing housing opportunities for all Virginians.

The report’s data are clear and unambiguous:

Virginia has a shortage of approximately 200,000 affordable homes;
Over 300,000 low-income renters in Virginia are cost-burdened—a challenge faced disproportionately by Black, Brown, and senior households;
5,975 individuals in Virginia are homeless on any given night. This under-representation does not include those who are precariously housed - temporarily staying with family or friends, living in motels, and those incarcerated or in treatment facilities who have nowhere else to reside.

The needs of cost-burdened households continue to exceed the combined capacity of programs to meet the demand. While challenges include restrictive local land use policies and community resistance, we need to increase investments in programs focused on deeply affordable rental housing.

Housing trust funds are a source of funding that can be leveraged with debt and equity to support a variety of affordable housing activities. These funds provide the flexibility to address local priorities and needs, and they are nationally recognized as an evidence-based best practice. Housing trust funds provide the gap financing for developments that create quality housing for low- and moderate-income households. Since 2014, the General Assembly has appropriated $145.2 million to the Virginia Housing Trust Fund, which, in combination with allocations from the National Housing Trust Fund has created or preserved 6,856 affordable units.

The Greater Washington Partnership, a coalition of business leaders has identified affordable, sustainable housing as one of six pillars to make the region from Baltimore to Richmond the most inclusive and competitive in the nation. Their Regional Blueprint for Inclusive Growth states that “Support for more affordable housing, pooled public-private funds to finance affordable housing, and championing equitable mortgage practices are several solutions to addressing housing challenges.”

Recently, Governor Youngkin announced $27 million in awards that will provide the final funding for 34 projects across the Commonwealth, creating or preserving nearly 2,000 homes for our lowest income neighbors. However, 61 applications, requesting $73 million in funding were submitted, demonstrating the need for resources that far outstrips the supply. Until we close the affordability gap in Virginia, state investments must be a mandatory part of the process.

Meaningful discussions around housing should include increased state investments coupled with effective regulatory reform. We recommend moving beyond high-level talking points to examine the multiple strategies that are needed to address the growing housing affordability shortage in the Commonwealth. We welcome the opportunity to work with Governor Youngkin and have that conversation.