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June 6, 2012

A Little Perspective on NoVA’s Cost of Living

A story in Tuesday’s Washington Times carried a headline – Six-figure income qualifies for housing aid in Tysons – and quotes from stakeholders that suggest incredulity at the idea that a household with income between $72,000 and $120,000 might somehow qualify for housing assistance. To most Americans, $120,000 is a lot of income. So is $72,000. And in many places in the United States, the notion that households with income in that range can qualify for assistance would merit skepticism. But the story is about Fairfax Co., Va., and efforts among local leaders to give priority to building adequate workforce housing in the area so people can live and work there. That’s an important fact, and it puts such a headline into some perspective.

Northern Virginia is an expensive place to live. In 2011 the median price of a single-family home in Fairfax was $402,500. And when you look at other data, as we do in our report, Under Pressure: The State of Working Northern Virginia, you can see how the high cost of housing, transportation, and childcare in the Northern Virginia area creates significant challenges even for families who would be comfortably middle class in other parts of the country.

To support a family of four in Northern Virginia at a minimal standard of living without relying on public assistance required, on average, an income of over $63,000 in 2010. While that’s under the lower end of the range cited in the story, another way to look at the cost of living in Northern Virginia is to look just at housing and transportation costs, which most experts say should not absorb more than 45 percent of a household’s income. From our report …

In 2009, the Urban Land Institute’s Terwilliger Center for Workforce Housing released a study Beltway Burden: The Combined Cost of Housing and Transportation in the Greater Washington, DC Metropolitan Area that estimated average housing and transportation costs by locality in the Washington, DC region. … This study looked not only at housing and commuting costs, but also at noncommuting transportation costs. … As of 2006, the average cost of just these two expenses exceeded $35,000 in almost all of Northern Virginia localities. At $35,000 a year for housing and transportation, and the 45 percent affordability standard, a household needs an income of over $75,000.

That was six years ago. The cost of living has only gone up since then. Meanwhile, between 2007 and 2010, median household income in Northern Virginia dropped by almost 4 percent. It’s a legitimate public policy goal to try to get teachers, coaches, nurses, first responders, police, firefighters, and other workers to live where they work. Public support for workforce housing can be a good way to make it happen, even if the numbers look strange at first sight.

The Commonwealth Institute

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