Northern Virginia housing advocates are worried that an unexpected decision by the Alexandria City Council last week to end a funding guarantee for affordable housing could result in fewer options for those who need it the most.
The council, with little discussion, removed the guarantee that housing and open-space funds get a certain percentage of tax revenue when it voted on the fiscal 2014 budget May 6. Alexandria, which had once set aside a penny of its $1.038 tax rate for housing, and this year reserves sixth-tenths of a cent for its affordable-housing fund and three-tenths of a cent for its open-space fund, eliminated both “set-asides” for the coming fiscal year.
“All of us are trying to find out what happened,” said Michelle Krocker, executive director of the Northern Virginia Affordable Housing Alliance. “If there is no longer a mechanism for a set-aside . . . that takes away the certainty for the development process that the money is there on an annual basis.”
Affordable housing is a major issue in Northern Virginia, as demand for more residences inside the Capital Beltway drives up prices. In Alexandria, more than 12,000 apartments affordable to those who make less than the median income of $106,100 have been lost in the past dozen years. There’s no indication that the trend will ease, despite efforts by local governments and nonprofit organizations.
“It’s important as a developer to know there’s a commitment of funds in any form the city can make,” said John Welsh, vice president of multifamily housing for the nonprofit affordable-housing developer AHC. “The expectation the money is going to be there is important to us [because] the local investment of dollars leverage so much capital” from other sources.
The removal of the set-asides funded by the property tax, which guarantee that the money will be there no matter what else happens to the city budget, does not necessarily mean that local housing funds are being cut. The housing trust fund has $3.1 million, available over the next three years, from developer contributions and loan repayments of prior loans.
City Manager Rashad Young said this week that money raised by the set-aside funds, about $600,000 after debt service is paid, will remain in the coming year’s budget.
What happens after fiscal 2014 is up to the council, he said. The council has to vote again on the matter in mid-June, when the budget ordinance is codified.
Alexandria was facing a $31 million shortfall when the council began working on the budget early this spring, and officials were forced to trade off how much they were willing to raise taxes vs. which cost cuts were acceptable.
Still, the change in the set-asides came as a surprise because there had not been a straw vote taken during the council’s budgeting workshops, which is the normal procedure. The local Budget and Fiscal Affairs Advisory Committee did oppose it, warning that the change limits the council’s flexibility in setting priorities, which sparked the only discussion the council had.
City staff, rushing to prepare budget documents in the 30 minutes between the last budget workshop and the council’s official meeting, thought there was consensus on the council, Young said, and drafted a motion reflecting that.
The motion was read as part of the setting of the tax rate. It passed unanimously, without discussion. The change was not reflected in the city’s subsequent official statement on the budget passage. The Delray Patch community news site first reported the story Monday.
Council member John Taylor Chapman, who campaigned last fall on the need for more affordable housing, called the removal of the set-aside funds “the first step down the road of cutting” the amount of money that Alexandria devotes to affordable housing.
“I’m waiting for the community to decide if this is an issue that matters to them,” he said Thursday.
Activists, he said, have been calling him “in a lot of angst,” seeking an explanation of what happened.
Rather than readdressing the issue on his own, or with Vice Mayor Allison Silberberg as an ally, he said it would be more effective if housing advocates make their concerns known to the entire council.
“We on the council need to be reinforced by the community,” Chapman said.