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Is Fredericksburg Underpaid?

Fredericksburg Families Face Highest Home Prices, Lowest Wages In Region
A worker offloads a delivery for a local restaurant on Caroline Street in downtown Fredericksburg, Virginia.

Is Fredericksburg underpaid?

As the City of Fredericksburg looks at its vision for the future, its data shows how its workers are faring at the moment.

A presentation on city growth for its updated Comprehensive Plan at the last Fredericksburg City Council work session showed stark contrasts in how the city’s households are faring economically compared with the surrounding counties in Planning District 16.

According to census data, a Fredericksburg family faces the highest home prices with the lowest incomes in the region. Their median household income of $83K a year is 80% that of their peers in Spotsylvania and King George counties and $2,000 a year less than a household in Caroline County. Meanwhile, the average home in Fredericksburg tops ($438K), the highest in Planning District 16. That beats out Stafford ($432K), King George ($372K), Spotsylvania ($350K) and towers above Caroline County ($253K).

Higher home prices would normally be a good thing for working class households, but fewer than half of Fredericksburg families own the house they live in. Just 38.5% of city homes are owner-occupied, a rate less than half that of Spotsylvania County where nearly 4 of 5 households own their residence. Besides the city, the next lowest rate of owner-occupied dwellings in PD16 is King George County, where 75% of homes are owner-occupied. Fredericksburg’s owner-occupied percentage is nothing new; it’s remained nearly constant for over 30 years.

What explains Fredericksburg falling financially behind the rest of the planning district?

It’s not that Fredericksburg isn’t educated.

Nearly half (42%) of city residents hold a Bachelor’s degree or higher, a rate on par with Stafford County (44%), where the median household income is approaching $130,000 per year. Only one in three residents in Spotsylvania and one in five from Caroline County has that same level of education.

It’s not that Fredericksburg lacks industry.

All five counties share similar job markets, with the region’s largest employers including health and social services, public administration, professional services and the retail trades. And all five counties share employment rates within their margin of error (62-64%).

Some of the answer may lie with an aspect the city didn’t examine during that work session, but where Fredericksburg still stands apart; income inequality.

Commonly measured with a quintile ratio, the city’s top 20th percentile of wage earners are now earning 5.4x the pay of the bottom 20th percentile of workers. That’s according to data collected from 2018-2022 by County Health Rankings and Roadmaps, a program managed by the University of Wisconsin Population Health Institute. It’s a figure that’s held more or less steady since 2015, when the program first started tracking statistics.

That level of income inequality is not only significantly higher than anywhere else in PD16, where none of the surrounding counties exceeds an 80/20 ratio of 4, but it’s the highest recorded in northern Virginia. It’s a disparity that may help explain some of the city’s 18% poverty rate, which is double that of Spotsylvania (9%), almost triple King George (7%) and more than four times Stafford (4%).

Many have pointed at the city’s outlying cost of living as a driving factor behind its inequality. They attribute much of those costs to antiquated zoning laws written in the spirit of protecting “small town charm” but that have come to prohibit new housing from being built to address the increasing demand. Others argue that more affordable housing may help address elements of wealth inequality, but won’t directly affect the paychecks that Fredericksburg’s residents are taking home every two weeks.

Nobody can seem to explain how to create more affordable living options under soaring home prices and increased borrowing costs without further exacerbating its already low home ownership rates rates. That would appear to require an approach far different than any the city has tried in the past.

Growth and development take up much of the discussion around the rising cost of living within the city, but the data seems to signal that housing prices aren’t the only factor fraying away at Fredericksburg’s middle and working class.

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