RICHMOND -- Gov. Gerald L. Baliles' attempt to get the Virginia government involved in a major way in housing production and renovation has run into serious problems in the General Assembly, according to legislators and other sources.
The ambitious $45 million initiative, which has received strong support from Northern Virginia officials, for the first time would use state general revenue to promote housing for needy families, an area being rapidly abandoned by the federal government in an era of budget austerity. Supporters in the General Assembly now are looking for revisions to save the Baliles plan.
The biggest hurdle appears to be the House Appropriations subcommittee that oversees housing, where some members are opposed and others skeptical. Proponents have feared that members will see the initiative as a big pot of money just waiting to be snatched for other pet projects and programs.
"I have concerns that we are getting into the same quagmire the federal government got into and is quickly getting out of," said Del. A. Victor Thomas (D-Roanoke), a House Appropriations subcommittee member. "That's a big piece of money, but it's just a drop in the bucket" to deal with critical housing needs.
Roanoke is "going down like the Titanic" on school funding, and money for schools has to come from somewhere, he added.
The proposal would pump $45 million in the fiscal 1988-90 biennium into the Virginia Department of Housing and Community Development, which administers federal programs along with the only state-funded housing program, a $400,000 project started last year to provide emergency shelter for the homeless.
The Baliles administration estimates that the initiative, combined with funds from local governments and nonprofit organizations, would result in 850 new housing units and 3,000 rehabilitated units, plus special housing for the elderly, disabled and homeless.
It includes these elements:$8.5 million for production of new housing for families with less than 60 percent of the state median income. This spending, targeted for the second year of the biennium, is considered the most controversial part of the plan. Low-interest loans of up to $10,000 per unit would be given to developers to help them build low-income housing. Some of this funding might also be used to help low- and moderate-income individuals buy homes. Combined with an expected $29.7 million in funding from other sources, this piece would create 850 multifamily and single-family homes.
$30 million for low-interest loans and a few grants for rehabilitating single-family homes and apartment buildings where lower-income families live, enough to renovate about 3,000 units.
$2 million in grants and loans for emergency shelters and hotel rooms for the homeless.
$2.25 million for special housing for low-income elderly and disabled.
$2.25 million for grants for emergency housing repairs, loans and grants for upgrading housing for migrant workers, help in establishing nonprofit housing organizations and administrative costs.
The governor's initiative, called the Virginia Housing Partnership Fund, would be financed by $35 million from the state's general fund and $10 million from a special trust fund, created to receive money from oil companies after a court determined that they had overcharged for oil.
The recommendations stemmed from a study last year by a Virginia housing commission, which found that 29,000 households in Virginia in 1986 were on waiting lists for subsidized housing and that 79,000 housing units in the state lacked adequate plumbing.
The initiative is designed to supplement programs under the Virginia Housing Development Authority, which issues bonds to provide reduced-interest loans for housing projects. In 1986, the authority decided to set aside $45 million of its reserve fund for special housing projects for disadvantaged groups.
The size and novelty of the plan are making it difficult to sell to some delegates.
The initiative "puts the state into a new role in housing, rather than just being a conduit for federal funds. The state would be moving to fill a gap created by the removal of federal funds," said Arlington County Board member Albert C. Eisenberg, who has made housing his top priority. "Members of the General Assembly need to become comfortable with this state role."
The housing development agency last year agreed to issue $33.6 million in bonds to help finance the purchase of 200 units at Arlington's Lee Gardens apartment complex to retain them as low-income housing, but the plan required that Arlington County back the loan to the nonprofit Arlington Housing Corp. Because of the size of that commitment, the county could do that only once, Eisenberg said, so other financing mechanisms have to be found for any similar projects.
Del. Robert E. Harris (R-Fairfax), the only Northern Virginian on the subcommittee that will consider the initiative, said that at last count the panel had two members for, two members against and three undecided.
A supporter of the proposal, Harris said he believes that the panel has moved in the past two weeks from a sentiment to defeat the initiative to proposals to fund it at about $20 million.
"The burners are being turned up," with letters and telephone calls from supporters starting to pour in, he added.
"We just have to keep our efforts up. There are a lot of competing interests," said Del. James F. Almand (D-Arlington), who has been involved in pushing the proposal. "Any time you have a new initiative like the housing proposal, you are going to have the questioning of it, as well you should have."
On the Senate side, there also has been skepticism about the proposal for production of new housing, said Sen. Joseph V. Gartlan Jr. (D-Fairfax), chairman of the Senate Finance subcommittee that would pass on the initiative.
The subcommittee is looking at alternative methods for financing that effort.
The General Assembly could create a revolving loan fund, which would require a substantial capital contribution in the early years but which eventually would produce an income stream for financing future projects, he said.