State and local officials agree that a lack of affordable housing options and the inflation rate are contributing to the homelessness crisis, and Dels. Eric Phillips and Wren Williams said that inflation is a concern most often cited by constituents.
They noted the cost of goods and services has been on the rise since the COVID-19 pandemic, with inflation rates spiking sharply in 2022. Simultaneously, the housing crisis picked up, and clean energy initiatives caused electric bills to soar, said Phillips, R-Martinsville.
A lack of affordable housing contributes to the problem.
“We don’t have enough housing. That’s the problem. People talk about affordable housing, but we don’t have any type of housing,” said Phillips, adding that the cost of building a new home has greatly increased, contributing to the lack of supply.
Additionally, “inflation is creating such high interest rates on actual borrowed money used to purchase a house that people aren’t moving,” Williams, R-Stuart, said, adding that he doesn’t believe the housing market will fix itself.
That creates an even bigger problem, because “if you don’t have any houses, then you can’t continue to develop economically,” he said.
Phillips said, “the price of building materials changes from one day to the next; it makes it very difficult to bid a job or build a house.”
With fewer people able to downsize or move from a starter home, many potential buyers aren’t interested in picking up a mortgage. This, coupled with high interest rates, has made many consumers second guessing decisions to borrow money.
Housing has been one of the most affected categories, according to Ariel Johnson, patient navigation director at the Virginia Harm Reduction Coalition and director of the MHC Warming Center. Not only has the price of buying a home increased, but the number of affordable rental options has also changed in the area, causing a spike in individuals left to wander the streets or live paycheck to paycheck.
Johnson has been monitoring the situation by assisting unhoused individuals and causes for the spike in struggling families.
“I think it’s the same issue that we are all dealing with. If you go to the grocery store and get a buggy full of groceries that used to cost $100, now it’s $300,” she said.
The population Johnson serves are typically stuck working jobs that pay minimum, or close to minimum, wage, which means many of the homeless “are not able to afford the rent that’s available right now.” She also stressed that the electricity rate increases have not been easy on families.
“All of that stuff comes into play when considering someone’s ability to live independently in a home and provide for themselves or others,” Johnson said. The problem also runs deeper as housing is being bought up by investors looking to make a larger profit.
“Homes that my folks would be able to afford are being bought out by bigger developers who are increasing rent rates,” she said, adding this practice has prompted smaller landlords in the area to raise rent rates.
Housing is the tip of the iceberg in many cases.
“In the current economy, all of us are feeling the pain at the grocery store. Inflation is at a 40-year high. We haven’t seen inflation at the levels we are seeing it at right now since the early 1980s,” Phillips said, adding that the current inflation rate hovered around 9.1 percent, compared to 1.4 percent nearly four years ago.
The increased cost of groceries has alarmed consumers over the past few years, he said, adding “eggs are up 33.1 percent, meat is up 8.2 percent, gasoline is up 59.9 percent. Car rates, air travel, and even building materials have also spiked, and those increases also affected the auto sector, which is now catching back up on stock due to COVID-19 shortages.
“There’s a lot of inventory sitting on car lots right now because the interest rates are so high,” Phillips said, and noted that what could be farmland is now being used for solar farms.
“While milk prices are up, we are taking more and more farmland and turning it into solar farms. As we see grocery prices go up, they aren’t going to go down if we keep taking farmland,” he said.
Utilities are another piece of the puzzle making up the cost of living crisis. Phillips attributes the uptick in power bills partly to the green energy policies forcing power companies like AEP to invest in new equipment.
“Twenty-five percent of your electric bill according to AEP (American Electric Power), comes from all the New Green regulations in the Virginia Green Economy Act and also what was RGGI,” Phillips said of the Regional Greenhouse Gas Initiative.
The associated regulations, he said, “cost me and you. It costs the consumer.”
“The inflation problems come more from all the economic policies,” said Williams. “I think that they did a terrible job at how that was handled.” He noted that the life savings of many people disappeared, seemingly overnight in many cases, due to the pandemic.
Increases in minimum wage also are a problem, especially for smaller businesses.
“The entry-level job pays more, the skilled laborer now wants to make more, and we have to pay more to keep them, and then the managers want more because now the skilled laborer is making as much as the management, and what happens is the price for everything goes up, and nobody is better off,” they said.
“In our area, there are few jobs that pay minimum wage,” said Phillips, adding that even companies like Sheetz are advertising entry-level jobs above minimum wage.
“Some localities here who had to go from $10 to $15 an hour shut down,” Williams said, and added that while one person may have been paid more at smaller establishments, five others lost their jobs. “That’s the understated consequences that I think people really, really, really need to start paying more attention to.”
Jobs are another concern, with long-time residents sometimes being overlooked for higher-paying jobs, Johnson said.
“I think employers see the fancy things on some people’s resumes that lived outside of the community, and they go off of that instead of recognizing the importance of that community rapport,” she said, noting that it is “disheartening” when that happens.
“I’m the director of this organization, and I’m struggling,” Johnson said. “I couldn’t imagine someone living off of their Social Security check.”
While help is available from places such as Grace Network – which helps with housing, food, and utilities – there are restrictions, she said.
“It ends up being you have to have an eviction notice before getting help. Once you already have an eviction notice, you’re pretty much up the creek without a paddle,” Johnson said, adding that she feels many ‘solutions’ are reactive instead of proactive.
“There are too many stipulations to get individuals the help that they need, to get them back on their feet once they’ve fallen down,” she said.
Johnson has a master’s degree, but she said she believes her community involvement is what really matters in doing her job.
“People who come here care that I know the person at the Salvation Army who’s able to help them or that I go to school with them more than about the degree on the wall,” she said, adding that inflation, job availability, and affordable housing all need to be steady before there is a turn in homelessness and at-risk families.
She is especially interested in seeing a reduction in homelessness, and will continue to work with those who need a place to keep warm during the winter and/or those who have fallen into the cycle of drug use.
