How should Richmond pay for affordable housing?

RICHMOND, Va. (WRIC) — In 2020, Richmond adopted an ordinance setting aside a portion of each year’s real estate taxes for the city’s Affordable Housing Trust Fund. This year, that funding should have totaled $2.4 million — but city officials say they’re under no obligation to transfer it.

That’s because the city council earlier this year agreed to deposit $10 million in federal COVID relief money into the trust fund — but a community group advocating for affordable housing says that’s no excuse to cut off a dedicated local funding source.

This long-running conflict centers on where the money for the Affordable Housing Trust Fund (AHTF) should come from. Since 2021, a portion of the city’s real estate taxes has been automatically set aside for the fund, which goes to support below-market-rate housing across the city.

That was a policy pushed by Richmonders Involved in Strengthening our Communities (RISC), a faith coalition representing churches and synagogues across Richmond.

“Instead of having to fight for token amounts in the budget process each year, there would be a significant amount of funding automatically allocated to the trust fund each year,” said Reverend Mairi Renwick, a RISC organizer.

The city has not yet allocated this year’s $2.4 million. Instead, James Nolan, Press Secretary for Mayor Stoney, told 8News they substituted $10 million in ARPA funds for the dedicated funding. Those funds were allocated by the city council earlier this year and formed a key part of Stoney’s plan for affordable housing.

But the budget amendment passed by the city council makes no mention of eliminating or suspending the real estate funding stream, and a proposal by the mayor to do just that was shot down by the city council earlier this year.

Nolan admitted to 8News that the ordinance was still on the books, but said there was an “understanding” with city council to substitute the ARPA funds for the dedicated stream, adding “there still needs to be introduced another ordinance to rectify the dedicated source of funding for AHTF.”

But that contradicts a statement Nolan gave to 8News earlier this year. In it, he told 8News that “ARPA dollars have to be administered differently so they are not technically ‘deposited’ into AHTF, but yes, combined with the $2.5 [million] in the AHTF, there will be $12.5 [million] available for affordable housing in Richmond this year.”

And if Nolan, the mayor, or city administrative officer Lincoln Saunders discussed the substitution of those funds with city council or the city planning commission, which also approved the ARPA funding proposal, no record of such a conversation exists.

During an October 18, 2021 planning commission meeting — at which Saunders was present — the proposal was placed on the consent agenda and was not discussed at all. And no video or audio recording was ever uploaded of the October 25, 2021, City Council meeting where the ARPA funding received final approval.

The mayor has so far directly committed $20 million in ARPA funding to the Affordable Housing Trust Fund, split over the 2022 and 2023 fiscal years, but Renwick said while the funding was welcome, they were concerned that the mayor’s informal commitment of $10 million a year might not last past the federal COVID relief grants.

On the other hand, RISC has claimed that the existing funding stream — guaranteed by city ordinance and drawing from a small portion of real estate taxes — will continue to grow over the coming years.

“We believe it has to do with the fact that they want a cap on the annual allocation of $10 million,” Renwick said. “$10 million is enough to leverage about 1,000 units of affordable housing. At that rate, it will take us 25 years to address the existing need.”

The conflict over funding for affordable housing comes as Richmond faces a mounting eviction crisis and spiraling housing costs. A recent update from VCU’s Eviction Lab found that eviction filings surpassed pre-pandemic levels after the federal eviction moratorium was fully lifted.

And homeownership in much of the Richmond region is now out of reach for the average resident, with investors increasingly snapping up affordable homes in low-income areas.