| Metric | 2014 | 2021 | # Change | % Change* | |
|---|---|---|---|---|---|
| Households (HHs) | 165,296 | 177,046 | 11,750 | 7% | |
| Renters | 59,297 | 60,510 | 2,751 | 5% | |
| Owners | 106,176 | 114,905 | 8,999 | 8% | |
| Cost-burdened HHs | 65,747 | 58,244 | -7,503 | −11% | |
| Severely Cost-burdened HHs | 26,489 | 23,296 | -3,193 | −12% | |
| Housing Units | 182,152 | 189,170 | 7,018 | 4% | |
| Median Rent | $1,239 | $1,433 | $194 | 16% | |
| Median Owner Cost | $1,617 | $1,634 | $17 | * | |
| Seasonal Vacancies | 3,288 | 2,891 | -397 | * | |
| Long-term Vacancy | 3,342 | 3,022 | -320 | * | |
| Source: VCHR Tabulation of ACS 2014 and 2021 5-year Estimates | |||||
| * Indicates that change from 2014 to 2021 was not statistically significant. | |||||
1 Introduction
1.1 Major changes since 2016
The 2016 study, which analyzed 2014 data, reflected a housing market recovering from the 2008-2009 Great Recession and struggling to respond to housing preferences for millennials, who succeeded baby boomers as the largest living generational cohort. The 2016 study identified lagging demand as a threat that could exacerbate underinvestment in housing.
However, since 2016, demand for housing in Virginia Beach has continued to recover, with average days on the market declining by over 50%. A healthier balance between supply and demand incentivizes both homeowners and investors to maintain and upgrade their homes. The new risk is a tightening market. In a tight market, first-time and moderate-income buyers are often edged out in the for-sale market by buyers paying cash or making offers well above asking prices. In addition, the for-rent market is overextended, forcing tenants to compete for units by accepting poor conditions and management.
Housing cost burden — when housing costs consume 30% or more of a household’s income — fell 11% between 2014 and 2021. While 2014 data reflected the lingering impact of the Great Recession, when unemployment and wage growth had not yet returned to pre-Crash levels, 2021 data reflects the mixed impact of the COVID-19 pandemic on the housing market.
On one hand, the pandemic triggered a serious economic shock heavily impacting the tourism and hospitality sectors central to Virginia Beach’s economy. On the other hand, the shock was met with an unprecedented expansion of unemployment benefits, direct economic stimulus, business support, and rental assistance providing meaningful relief to many struggling households. Relief such as the Child Tax Credit and emergency rental assistance was still active and therefore reflected in the 2021 data.
However, it’s likely that as these assistance programs expired, lower-income households have will increasingly struggled with affordability in a way that is only just being reflected in the 2022 national data as this report is being finalized.
Millennials and boomers
The 2016 study paid particular attention to generational differences in housing preferences between millennials and baby boomers. Housing preference research suggests that millennials as a group prefer walkable, transit-oriented built environments to a greater degree than preceding generations. However, Myers suggests that the unprecedented urban migration of millennials in the late 2000s and early 2010s may have resulted from a synchronization of life cycle, business cycle, and housing market cycle, and is now reversing.1
The number of millennial households grew by 30% between 2014 and 2021, from approximately 40,229 to 52,131, reflecting the cohort’s move further into peak household formation. The number of millennial households living in single-family detached houses increased by 84%, from approximately 12,051 in 2014 to 22,168 in 2021. The number of boomer-headed households decreased by 7% and the number of boomer-headed households in single-family detached houses decreased by 11%, indicating a transition to attached and multi-family housing.
The share of millennial-headed households in single-family detached houses increased by 13 percentage points, while the shares living in single-family attached and multifamily dwellings fell by 5 and 7 percentage points, respectively. The share of boomer-headed households in single-family detached houses decreased by 3 percentage points, while the shares living in single-family attached and multifamily dwellings rose by 2 points and 1 point, respectively.
Since the 2016 study, members of the baby boomer generation have moved more fully into retirement years. A greater share of this cohort now lives in homes owned free and clear, from 17% in 2014 to 25% in 2021. However, the considerably higher costs of other forms of tenure may discourage boomer homeowners from transitioning to housing more suitable to aging in place, or from downsizing and thereby increasing the supply of owner-occupied housing available to younger households. Furthermore, older adults are the most likely to live alone, and housing cost burden is pervasive among older, one-person households. As baby boomers age, the need for affordable senior housing in Virginia Beach will continue to grow.
Myers, D. (2016). Peak millennials: Three reinforcing cycles that amplify the rise and fall of urban concentration by millennials. Housing Policy Debate, 26(6), 928-947.↩︎