Richmond Regional Housing Framework

Goals and Solutions

Goal 1: Increase the Supply of Affordable Rental Housing in the Region.

Goal 2: Support Racially Inclusive Wealth Creation by Increasing Homeownership Opportunities for Low and Moderate Income Households.

Goal 3: Ensure that our Growing Senior Population is Safely and Affordably Housed.

Goal 4: Improve Housing Quality and Ensure Better Health and Safety for Residents.

Goal 5: Expand Housing Stability and Stop Displacement.

Goal 6: Expand Housing Choices for Moderate and Low Income Households.

Selection of Priority Solutions*

Resources for Solutions

Goal 1

Increase the Supply of Affordable Rental Housing in the Region.

A healthy housing market depends on an adequate and balanced supply of housing options. The region lacks a sufficient supply of affordable rental homes to meet the growing demand. The result is a large deficit that imposes high housing cost burdens on many households.

Major Findings:

• Since 2009, the percent increase in average rents across the region is double the percent increase in average incomes.
• In addition to a current deficit of 20,000 affordable rental homes, our region will need to provide over a thousand new homes affordable to low-income households per year between now and 2040, based on household growth projections.
• Apart from a few hundred affordable apartments brought online on average annually, nearly all new multifamily apartments in the region are priced out of reach to low-income households.

WHAT IT DOES

New areas of potential multifamily development will foster new, multifamily rental and homeownership developments which will increase housing supply and relieve market pressure on rising rents and prices.

HOW IT WORKS

Through changes to the local zoning ordinance, a jurisdiction can allow more multifamily development on parcels currently zoned for low-density uses.

WHO IS RESPONSIBLE

• Local Planning Staff
• Local Planning Commissions
• Board of Supervisors or City Council

HOW IT WILL HELP ACHIEVE GOAL

Expanded multifamily zones will increase the supply of higher density housing that can serve a variety of uses such as homeownership, rental, market-rate and affordable, senior and non-senior housing.

KEY CHALLENGES:
• Existing residents may have concerns over the impact that higher-density housing will have on the quality of life in their neighborhood (impact on schools, traffic, parking, etc.).
• Large-scale education efforts may be necessary to build public support for added densities. Most notably, the City of Minneapolis recently eliminated zoning that is exclusively single-family in its new comprehensive plan, but only after years of community outreach and engagement.

New or existing? New
Creation or preservation? Creation
Requires new funding? No
Requires new state enabling legislation? No

WHAT IT DOES

Naturally occurring affordable housing (NOAH) preservation ensures that private landlords continue as responsible stewards of affordable housing that is not subsidized or regulated housing.

HOW IT WORKS

Through carrot-and-stick approaches, a NOAH preservation strategy works with NOAH owners to ensure the preservation of the housing at affordable prices and high quality.

WHO IS RESPONSIBLE

• Local Government Housing Staff
• NOAH owners
• Local Governments
• Community Development Organizations
• Financing Agencies
• Community Advocates

KEY CHALLENGES:
• Proactive outreach will require identifying and communicating with NOAH owners who will have a range of interests in such a program.
• Any financial incentives will need to be paired with ongoing monitoring of the project to ensure that owners follow through on their commitments.
• Poor quality housing and NOAH housing is highly correlated. This means that NOAH housing is likely to need more renovation than other housing in the jurisdiction.

HOW IT WILL ACHIEVE GOAL:
This preserves existing affordable housing, prevents displacement and may also be an opportunity to renovate and improve existing, aging affordable housing.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond
Regional collaboration (for resources and NOAH tracking)

New or existing? New
Creation or preservation? Preservation
Requires new funding? Yes
Requires new state enabling legislation? No

WHAT IT DOES

Jurisdictions can create better systems to be aware of affordable rental housing communities that are at-risk due to expiring federal or state subsidies, declining physical condition, or conversion to market rate. Once identified, localities can become partners in the rehabilitation of these properties by entering into MOUs with new owners. New owners could be non-profit or for profit organizations. This keeps the housing affordable, in good condition and prevents displacement of residents.

HOW IT WORKS

Most affordable housing subsidy is provided on a time-limited basis and requires property owners to maintain a certain level of affordability for a specific number of years. When this term expires, the property owner may sell the property or convert it to market-rate, if market conditions permit. This happens with Low Income Housing Tax Credit (LIHTC) projects when they reach 15 or 30 years after completion. This can represent a significant loss of affordable housing and displacement of residents. Frequently, jurisdictions and community development organizations are unaware that a property is nearing the end of its compliance period or is in the process of converting to market rate.
Localities have the ability to incentivize owners and new owners with special financing subsidies and with fee waivers, reductions or accelerated permitting. Localities can also create leverage with developers as a result of the requirement that localities sign off on tax exempt bond financing. This type of financing, which also carries the 4% tax credit, is particularly popular with developers for the preservation of older affordable communities. The advantage of this financing is that it is non-competitive and far easier to access than the 9% annual LIHTC competitive application. Such bonds are typically issued by local housing authorities or VHDA.
Through a network of public and private partners, localities could monitor and become aware of expiring, affordable properties. This information could be used to create partnerships with VHDA, DHCD, local jurisdictions, other funding sources and community development organizations to seek to purchase such properties and protect their affordability or to work with existing owners to improve quality and extend affordability.

WHO IS RESPONSIBLE

• Local & State Housing Officials
• Affordable Housing Owners
• Community Development Orgs
• Financing Agencies
• Community Advocates

KEY CHALLENGES:
• Properties positioned for conversion into market-rate housing will have high acquisition costs. This cost will make preservation of affordable housing financially difficult. Additional funding sources will be required to pay these acquisition costs.
• Some of these conversions from affordable to market-rate are difficult to identify, as some occur in off-market transactions or without changing hands in ownership. In this situation, establishing strong relationships with existing owners of affordable housing and with VHDA/DHCD will be valuable.

HOW IT WILL ACHIEVE GOAL:
This preserves existing affordable housing, prevents displacement and is also an opportunity to renovate and improve existing, aging affordable housing.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond
Regional collaboration

New or existing? New
Creation or preservation? Preservation
Requires new funding? Yes
Requires new state enabling legislation? No

WHAT IT DOES

Accessory dwelling units (ADUs) are small homes owned and managed by existing homeowners in the community. ADU programs often allow single-family homeowners to build small “accessory” units in garages, in the back or side yards, or attached to their home. Some programs also allow ADUs within the existing building’s structure. These units are low-cost by virtue of their small size and can be a source of affordable rental housing for young workers, seniors, and others—and often help families stay together on their property. In the case of seniors, ADUs can house family members or other caretakers. Seniors can also downsize into the ADU and lease the house to a larger family, using the extra income for health or other needs.

HOW IT WORKS

Through changes to the local zoning ordinance, a jurisdiction can permit development of additional housing units on parcels currently zoned exclusively for single-family units. ADUs may be allowed by-right in certain districts or permitted with a conditional approval. After construction, localities will issue a certificate of occupancy that allows the homeowner to lease out the unit.

WHO IS RESPONSIBLE

• Local Planning Staff
• Local Planning Commissions
• Board of Supervisors or City Council

KEY CHALLENGES:
• Local Planning Staff
• Considerations of neighborhood character and how to safely and cohesively allow for this new type of development can be addressed during the process of making zoning changes and through developing thoughtful program guidelines.
• Some programs require owner occupancy of the primary living unit. This requirement severely restricts participation, especially by seniors who may be interested in downsizing to their accessory unit.
• Some programs require accessory units to be attached or detached rather than allowing them to be within the existing building envelope. The option of putting a small apartment on the second floor of an existing home is frequently the cheapest and most desirable option for a homeowner. Updates to zoning ordinances should pay special attention to any requirements in local and state building code.
• Parking is often a neighborhood concern, especially in older, dense urban neighborhoods. Experience in many programs demonstrates that parking is seldom significantly impacted in such areas when well designed ADU programs are implemented.
• Individual homeowners may need assistance in developing this housing type and • Underutilization is possible where knowledge, education, and other resources for property owners are not available.

HOW IT WILL ACHIEVE GOAL:
ADUs create two affordable housing benefits: they create more affordable rental housing without subsidy, and they provide an additional source of income for single-family homeowners. ADUs are small enough in scale that homeowners can more easily afford the cost of construction, and the units have limited impact on the surrounding neighborhood.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond

New or existing? Primarily new. Hanover County allows the addition of attached—not detached—additional housing units via special use permit in certain residential zones. This solution recommends by-right, detached ADUs in residential zones.
Creation or preservation? Creation
Requires new funding? No
Requires new state enabling legislation? No

WHAT IT DOES

Inclusionary zoning programs, also known as affordable dwelling unit ordinances, mandate or encourage below-market rate units in new housing developments in exchange for meaningful developer incentives. By codifying affordable home production in a locality’s zoning rules, a range of housing prices and choices are delivered in all new residential development. Nearly 500 communities across the country have a form of inclusionary zoning. Because developers provide affordable units without additional subsidy, most inclusionary zoning programs are primarily targeted to households earning between 50% and 80% of AMI, while some may be even higher.

HOW IT WORKS

There are many different types of inclusionary zoning. Under Virginia law, localities may either choose to require affordable housing set-asides in all new development (including by-right), or elect to require it only when a developer seeks a rezoning or special use permit. The former (guided by Va. Code Ann. §15.2-2304) is known as mandatory inclusionary zoning; Virginia law permits this only in six localities, primarily in Northern Virginia. In such cases, developers set aside a certain portion of affordable units in new developments in exchange for incentives like density bonuses and reduced parking requirements. The latter, known as voluntary inclusionary zoning (guided by Va. Code Ann. §15.2-2305), is available for all other jurisdictions, including the Richmond region. A locality may only require affordability set-asides in exchange for incentives if a developer requests a land use exemption, including rezonings and special use permits.

WHO IS RESPONSIBLE

• Local Planning Staff
• Local Planning Commissions
• Board of Supervisors or City Council
• Developers and Builders

KEY CHALLENGES:
• Local Planning Staff
• Although mandatory inclusionary zoning has shown to be far more effective at producing affordable units than voluntary programs, Virginia law does not enable any localities in the Richmond region to adopt it. The region should consider collaborative support for our localities to be included in the §15.2-2304 enabling legislation or seek other legislation that enables localities to develop workable programs in cooperation with their local development community and local market conditions.
• Developers and builders may oppose some types of new inclusionary requirements. But well-designed programs could offer substantial incentives to offset costs incurred by providing affordable units.
• Inclusionary programs typically work best in areas with high development pressures, active amounts of new construction, and a generally accepted need for increased densities. Hanover and Ashland may reach this status in the next few years, but given current development patterns, voluntary inclusionary zoning programs would likely not be productive.

HOW IT WILL ACHIEVE GOAL:
Because inclusionary zoning can be used without additional public subsidy, it is not a program capable of producing a large number of deeply affordable homes. Rather, it is an important tool available to localities to guarantee some affordable homes are included in nearly all new, private-market development which generally occurs in higher-opportunity neighborhoods. New, robust inclusionary zoning programs in the region would help create and more equitably distribute homes available to low- and moderate-income households.

GEOGRAPHY TAG(S):
Chesterfield, Henrico, Richmond

New or existing? Primarily new. The City of Richmond has a voluntary inclusionary zoning ordinance in place, but it remains extremely underutilized and needs revision. Chesterfield and Henrico do not have inclusionary zoning ordinances.
Creation or preservation? Creation
Requires new funding? No
Requires new state enabling legislation? Yes

WHAT IT DOES

Housing choice voucher (HCV) holders face discrimination and a lack of quality options in housing complexes that accept HCVs. Voucher holders who are seeking to identify housing complexes that accept vouchers and landlords who do accept vouchers are often unaware of one another. Resources are needed to facilitate this “matchmaking.” Through increased education of landlords and tenants, HCV holders may have greater success in securing housing.

HOW IT WORKS

A coalition of jurisdictions, landlords, the housing authority and social service organizations would create a series of resources for landlords and HCV holders. Resources would include: landlord education programs to increase participation in the HCV program, landlord education regarding case management resources for HCV tenants, initial inspection checklists, a list of properties that accept HCV holders, a list of LIHTC developments that are required to accept HCV holders, special security deposit assistance, other financial incentives to landlords. A small state tax credit program for landlords did not prove to be effective due to the level of assistance provided and the form of subsidy.

WHO IS RESPONSIBLE

• Voucher Program Administrators (RRHA, VHDA, and social service providers)
• Private and Nonprofit Rental Management Companies
• RMHF Connect Capital Working Group
• Housing Opportunities Made Equal (HOME) of Virginia

KEY CHALLENGES:
• Many landlords in the area simply do not accept Housing Choice Vouchers.
• Under Virginia law, landlords may legally deny housing to HCV holders. Currently, Virginia law does not prohibit landlords from discrimination based on a tenant’s “source of income” to pay rent.
• Many low income households need counseling and other support to successfully locate and lease housing in high opportunity neighborhoods.

HOW IT WILL ACHIEVE GOAL:
Not all HCV holders find the type of housing that they are seeking. Many end up renting in high poverty neighborhoods because it is the only housing that they can find and qualify for. Some are not successful at all and must return the voucher. Access to more information for both landlords and voucher holders may improve this, including case management support for voucher holders.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond
Regional collaboration

New or existing? Existing; but needs widespread expansion.
Creation or preservation? Preservation
Requires new funding? No
Requires new state enabling legislation? No; but adding source of income to state fair housing protections would help many families find better housing opportunities.

WHAT IT DOES

Where you live and how you get around are very closely linked. To improve access to jobs and promote transportation alternatives, affordable housing should be well-connected to the rest of the region. In core urban areas and along dense corridors, affordable housing can be located adjacent to transit. In lower-density suburban communities, diverse housing options can be integrated into newer walkable, mixed-use communities.
In the City of Richmond and parts of Chesterfield and Henrico, major commercial corridors are a major opportunity for generating new affordable homes. These include corridors served by buses, where transit-oriented development (TOD) can be employed. In Hanover, Ashland, and other suburban communities, lower-cost housing can be intentionally sited within or near neighborhoods where walking and biking to amenities are possible.

HOW IT WORKS

Connecting affordable housing and transportation options is possible when land use and transportation planning efforts align. Throughout dense corridors served by transit, localities may pursue TOD to promote higher-density, mixed-use, pedestrian-oriented designs. In such TOD districts, zoning ordinances often reduce parking requirements and increase floor area ratios so developers can supply more housing at lower costs. Adding parcels where multifamily is allowed and encouraged also opens possibilities for developers to use LIHTC and other programs to deliver dedicated affordable apartments near public transportation.
In corridor areas where public transit is not available, localities can pursue similar land use strategies, but with a greater emphasize on alternative transportation infrastructure. This might include sidewalks, bike-friendly street designs, are shared-use paths that connect housing with commercial, civic, and recreational uses. Designating parcels near this infrastructure for less-expensive housing types would help ensure equitable access.
Along with land use reform, localities may also engage in strategic land acquisition, especially to consolidate larger parcels that are conducive to the type of development that is desired. A land bank or other entity may be a useful tool in pursuing this activity. There may also be a variety of financing incentives, including tax incentives, that can be committed to the corridor. Frequently, third party financing entities (e.g., VHDA or Virginia Community Capital) may also be brought in as special partners. Newly designated Opportunity Zone census tracts in these corridors may also provide financial incentives for investments in new development.
Several of the corridors in the Richmond region are conducive to this type of planning, including the Route 1, Hull Street, and Midlothian Turnpike corridors in Richmond/Chesterfield, the West Broad Street corridor in Richmond/Henrico, and the Mechanicsville Turnpike and Route 1 corridors in Henrico/Hanover.
Because these corridors cross jurisdictional lines, it is important that localities collaborate on the corridor strategies so that incentives to developers and design goals align on both sides of the boundary line. Adjoining localities should also adopt similar affordability strategies so that real mixed-income outcomes are achieved in both jurisdictions.

WHO IS RESPONSIBLE

• Local Planning Staff
• Local Planning Commissions
• Board of Supervisors or City Council
• Economic development officials

KEY CHALLENGES:
• There may be opposition to higher densities from residential neighborhoods that are adjacent to the proposed higher density corridor development areas; but in general, property owners in the district benefit by increased potential for development on their parcels.
• While localities will be responsible for specific land use and zoning reforms, collaboration by localities is necessary to ensure a common vision, consistency in zoning, overlays and design requirements, along with shared responsibility for providing affordable housing within the developments along the corridor.

HOW IT WILL ACHIEVE GOAL:
Including diverse housing options (and multifamily housing types where dedicated rental assistance programs may be used) within transportation-rich development is a widely accepted planning best practice. Providing new, affordable homes in these neighborhoods helps workers live near job clusters, reducing commuting costs and providing greater economic opportunities.

The Richmond region has numerous high traffic corridors that cross jurisdictional boundaries, including many that were developed in the 1950s, 1960s, and 1970s. Their revitalization offers other important regional benefits, such as reducing blight and increasing local tax bases.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond
Regional collaboration

New or existing? Primarily new. Following the Pulse Corridor Plan, the City of Richmond created a TOD-1 zoning district and subsequently rezoned portions of Scott’s Addition and Monroe Ward. This is the only specific TOD zoning in the region. Truly cross-jurisdictional corridor plans have not yet been established but significant corridor planning work has been underway.
Creation or preservation? Creation and preservation
Requires new funding? No
Requires new state enabling legislation? No

WHAT IT DOES

Federal law has always allowed for a range of rents in tax credit properties. But until last year, the maximum rent was one that was affordable to households at 60% AMI. Frequently these properties might also include some rents affordable to 50% AMI, depending on the other types of subsidies that were available. Often the range of households served is narrowly in the 50-60% AMI band. Changes in LIHTC regulations in 2018 now make it possible to serve households up to 80% AMI, if these are offset with a corresponding number at a lower percentage of AMI.

HOW IT WORKS

This income averaging where higher rents “subsidize” lower rents makes it possible for LIHTC projects to serve a wider range of incomes. This method can achieve some deeply affordable units that otherwise are only possible when federal rent subsidies are available. The program also creates housing that is more truly a “mixed income” community.

WHO IS RESPONSIBLE

• Local Planning Staff and Community Development Staff

KEY CHALLENGES:
• Understanding the internal financing parameters for a developer in order to create and offer appropriate incentives.
• Convincing LIHTC equity investors to accept the more complex feasibility and compliance issues associated with rent skewing.

HOW IT WILL ACHIEVE GOAL:
This method can produce the type of more deeply affordable housing that is typically only achievable with rental assistance.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond
Regional collaboration

New or existing? New
Creation or preservation? Creation and preservation
Requires new funding? No; but could be an additional incentive to developers
Requires new state enabling legislation? No

WHAT IT DOES

In addition to streamlining the standard review process for all new developments, jurisdictions can implement a “fast track” process for affordable housing through the permitting, public approval, special use and other processes necessary for creating new affordable housing. “Green-Tape” programs also offer to waive fees for affordable housing developments. The faster and more predictable process coupled with lower fees means a less costly affordable housing project.

HOW IT WORKS

Jurisdictions work with their various permitting departments (building department, planning and zoning, etc.) to create a separate, expedited review outside of the standard review process for qualifying affordable housing developments. Program parameters such as what types of projects qualify and the extent of the benefits of the program vary by jurisdiction. Specific examples of charges available to waive include water and sewer hookup fees, which can total thousands of dollars.

WHO IS RESPONSIBLE

• Local Planning, Building, and Permitting Staff
• Board of Supervisors or City Council

KEY CHALLENGES:
• Streamlined permitting and approval processes is always a goal of jurisdictions yet can be difficult to achieve.
• A system must be in place to ensure projects applying for expedited review follow through to create the affordable housing stated in their permitting application.

HOW IT WILL ACHIEVE GOAL:
Lowering the cost and expediting the process (which lowers the cost) of new development translates into increased affordability or additional affordable housing.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond

New or existing? New
Creation or preservation? Creation
Requires new funding? No
Requires new state enabling legislation? No

WHAT IT DOES

Properties under control of the jurisdiction that are viable as affordable housing developments are a financial asset. Jurisdictions can convert this asset into revenue for themselves or into other community benefits such as affordable housing. This land can be provided to affordable housing developers at low or no cost, thereby increasing the amount of affordable housing created or the depth of affordability or both.

HOW IT WORKS

Jurisdictions take stock of their portfolio of surplus or tax foreclosed properties and implement a system to convey the properties to affordable housing developers. Conveyance of these properties can be made contingent upon the purchasers’ ability to deliver affordable housing. By providing the property at low or no cost, the jurisdiction provides an indirect subsidy to the project.

WHO IS RESPONSIBLE

• City and county attorney offices: identify tax delinquent and surplus parcels available for transfer to affordable housing developers; complete necessary legal procedures
• Community development organizations: partner with localities to identify properties that are ideal for affordable housing development and eligible for transfer
• Board of supervisors or city council: Establishes priorities and guidelines via resolution; reviews and approves transfers

KEY CHALLENGES:
• Preserving this land asset for affordable housing means foregoing short-term, immediate revenue to the jurisdiction in the form of tax auction or other proceeds.
• State law sets limits that apply to when a property can be redirected from auction to “direct sale” to a land bank or a non-profit. Those caps are restrictive and eliminate most properties from being eligible for direct sale. The cap was increased in 2019 for the City of Richmond (and other cities outside of the region) but the counties’ limits were not changed.

HOW IT WILL ACHIEVE GOAL:
Access and availability of land is a major challenge for affordable housing developers, especially in very strong real estate markets. This solution provides a “shortcut” to acquire property at lower costs to help create new affordable housing.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond

New or existing? New
Creation or preservation? Creation
Requires new funding? No
Requires new state enabling legislation? No

Goal 2

Support Racially Inclusive Wealth Creation by Increasing Homeownership Opportunities for Low and Moderate Income Households.

Homeownership is the most important building block to create wealth among lower income families. More “starter homes” and other low-cost options are required to address this challenge. We must reduce the growing ownership gap between White and minority households.

Major Findings:

• The Black homeownership rate in Virginia is lower today than it was 50 years ago, reflecting the major institutional and structural factors maintaining the racial homeownership and wealth gaps.
• There is an extremely tight homebuying market for smaller, modestly priced starter homes that keeps many from obtaining homeownership.
• As millennials “grow up” and baby boomers seek to downsize, there will be an increased demand for smaller homes available for purchase in denser, amenity-rich neighborhoods.

WHAT IT DOES

A community land trust (CLT) is an “equity sharing” model of homeownership that provides homeownership opportunities to modest-income buyers and keeps homes affordable for future generations by limiting a home’s future resale price.

HOW IT WORKS

The community land trust is a nonprofit organization that develops homes and retains ownership of the land under the house in perpetuity. The CLT leases the land to the homeowner with a long-term lease at a nominal price, thereby reducing the cost of the house by the value of the land. The lease also contains restrictions that include an income limit for subsequent buyers as well as limits on the future sales price of the house. CLTs across the country use a variety of mechanisms to keep the price of the home affordable.
One of the benefits of the CLT model is that, unlike traditional homeownership programs, the home stays affordable for future buyers without the need for additional public subsidy. The board of directors for the CLT is comprised of community representatives, local experts and stakeholders, and homeowners in the CLT program. CLTs can also be used for rental and commercial development.

WHO IS RESPONSIBLE

• Local nonprofit community land trust: develops housing, cultivates buyers, and administers program
• Local housing staff: assists CLTs with tax assessments, provides local funding, and ensures CLT is eligible for federal housing fund support including HOME and CDBG
• Mortgage lenders: create or modify lending products available for CLT homebuyers

KEY CHALLENGES:
• The CLT model can be difficult for homebuyers to understand and accept. It requires more interaction and counseling with potential buyers.
• The CLT model also does not allow for as much equity building (wealth building) as a traditional fee simple homeownership model.
• Because land costs are rising in the Richmond region, a CLT will need a consistent source of support to be able to continue to purchase land.

HOW IT WILL ACHIEVE GOAL:
One CLT home may serve ten or more low- and moderate-income households during its life cycle as compared with traditional models that only serve one. Because CLTs strive to be strongly connected to the neighborhoods they serve, they often prioritize homebuyer engagement and education in communities of color, which helps increase homeownership opportunities.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond

New or existing? Existing (Maggie Walker Community Land Trust)
Creation or preservation? Primarily new
Requires new funding? Yes; both for land acquisition and additional homebuyer subsidy at closing
Requires new state enabling legislation? No

WHAT IT DOES

A regional homeownership center provides a single point of entry and a simplified process for households that are interested in homeownership. Currently, the providers of and information about homeownership counseling, homebuyer readiness, assistance programs, lending and production are scattered and not well coordinated. There are multiple points of entry into the process and the process itself can be confusing for first time homebuyers. Regional centers exist in many forms across the country that can provide a variety of models and best practices.

HOW IT WORKS

One physical location would serve as a “one-stop shop”—especially for first time homebuyers. The center is supported by contributions from each participating locality, from banks and other participating entities. The center offers a full range of services to new homebuyers from financial literacy, credit repair and homebuyer readiness to financing, down payment and closing cost assistance, mortgage loans and information about homes to purchase. Once established as a “go to” resource, it may be possible to add services for renters and expand the mission of the center.

WHO IS RESPONSIBLE

• Nonprofit homeownership providers: advertise available homes and any applicable program restrictions
• Counseling organizations: provide direct homebuyer assistance
• Banks and mortgage lenders: provide funding, educational materials, access to loan products
• REALTORs: educate brokers on affordable homeownership programs, offer homebuying assistance to buyers
• Local housing and offices: advertise hub to residents and provide funding
• VHDA: coordinate and provide homeownership educational programs

How it will help achieve goal:
Centralizing the delivery of services makes the program more accessible to homebuyers. Special targeting programs such as reducing the racial gap in homeownership or reaching out to new immigrants can be prioritized, delivered, and measured more effectively. The “Moonshot” initiative which is aimed at reducing residential segregation in the region supports this approach.
Geography tag(s):
Regional collaboration

Key challenges:
• Shifting the existing scattered programs from individual organizations to a new entity will be a challenge.
• Organizations currently involved in homeownership development will need to buy into the collective benefit of this arrangement and de-prioritize their individual needs or priorities.

New or existing? New
Creation or preservation? Creation
Requires new funding? Yes
Requires new state enabling legislation? No

WHAT IT DOES

Affordable homeownership programs can be an excellent tool for creating household wealth for racial groups historically excluded from the opportunity. But affordable homeownership alone does not create equitable opportunity. Intentional and affirmative programs designed to grow Black and other minority participation in homeownership programs must be fostered.

HOW IT WORKS

To increase opportunities for Black and other minority households in the pursuit of affordable homeownership, a number of measures can be taken. At the local level, programs that provide homeowner education, down payment assistance and financial literacy should be funded at higher levels and expanded.
Existing programs such as home buyer readiness and down payment assistance and should be expanded, while other new efforts should be launched such as early-stage financial literacy programs aimed at households who need additional education to be ready to purchase a home. Such programs could be targeted to public housing residents and other renters in assisted housing. Outreach through non-traditional sources including churches, neighborhood associations, sorority and fraternal organizations, as well as other community-based groups must be increased.
In addition to building the region’s affordable homeownership program infrastructure, localities can work with the local banking community to ensure access to quality lending for minority households. This can include working to make sure banks maintain branches in historically minority communities and encourage banks to open new branches as well.
Clear and measurable goals regarding increases in the minority rate of homeownership should be set and monitored.

WHO IS RESPONSIBLE

• Nonprofit homeownership providers: conduct racial equity assessments of existing programs, deepen engagement with existing community organizations to recruit buyers
• Counseling organizations: determine major needs and gaps for buyers of color, communicate with CDCs and funders
• Banks and mortgage lenders: expand minority lending outreach
• Local housing and community development offices: fund down payment assistance and other similar measures

HOW IT WILL ACHIEVE GOAL:
Intentional, proactive efforts to address the racial homeownership gap are necessary to overcome racial wealth disparities in the region.

GEOGRAPHY TAG(S):
Regional collaboration

KEY CHALLENGES:
• Effective programs do exist currently, but they need additional resources and more targeted implementation to increase success with minority households.

New or existing? New
Creation or preservation? Creation
Requires new funding? Yes
Requires new state enabling legislation? No

WHAT IT DOES

The region has a shortage of homes that are priced in the “starter” home range between $150,000 and $200,000. One strategy for reducing price is by reducing the cost of land per home though greater density, which may be achieved by changing local land use regulations to allow for and incentivize the production of smaller homes that are inherently less expensive.

HOW IT WORKS

The region needs to begin producing smaller, less expensive homes. The availability of more land that can support multifamily condominium, townhouse, zero lot line, patio/cluster homes, alternative site plans, and even tiny homes will encourage the development of more of this type of housing.

WHO IS RESPONSIBLE

• Local housing providers, architects, land planners and engineers: design new and creative small homes and subdivisions
• Local planning staff: research and draft ordinances; undertake community outreach
• Local planning commission: review and recommend ordinances
• Board of supervisors or city council: take final action on adoption

HOW IT WILL ACHIEVE GOAL:
Smaller, less expensive options for purchase will open the market to households that currently have no choice but rentals.

GEOGRAPHY TAG(S):
Chesterfield, Hanover, Henrico, Richmond, Ashland

KEY CHALLENGES:
• In some places, the public may have perceived fear of higher density.
• Mortgage financing restrictions may be encountered for certain types of small homes. Appraisers will also need to be educated as these new homes begin to enter the market.
• The market for condominiums remains less certain than traditional homeownership. Small condo buildings face financing challenges.

New or existing? New
Creation or preservation? Creation
Requires new funding? No
Requires new state enabling legislation? No

WHAT IT DOES

Increasing the amount of developable land where manufactured homes are allowed will help the market deliver more affordable home options, which will increase our region’s homeownership rate and expand wealth-building opportunities without additional public or private subsidy.

HOW IT WORKS

Localities use zoning ordinances to define what types of land uses are permitted where. Virginia law requires localities to permit manufactured homes as a by-right use in agricultural zoning districts, but as our suburban localities grow and designate more land for residential development, current zoning designations often restrict manufactured housing. Localities should amend their residential zoning ordinances to specifically permit new manufactured homes by-right.

WHO IS RESPONSIBLE

• Local planning staff: research and draft ordinances; undertake community outreach
• Local planning commission: review and recommend ordinances
• Board of supervisors or city council: take final action on adoption

HOW IT WILL ACHIEVE GOAL:
New, high-quality manufactured homes cost significantly less than their “stick-built” alternatives. By utilizing factory building techniques and economies of scale, manufactured home producers can deliver homes that are more affordable to low- and moderate-income buyers. Making these home options more accessible in the region will help increase ownership opportunities without any additional subsidy.

KEY CHALLENGES:
• Public perception of manufactured housing remains mostly negative due to unfounded stereotypes.
• Financing options for manufactured home buyers remain more limited than loan products for traditional homes.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond

New or existing? New
Creation or preservation? Creation
Requires new funding? No
Requires new state enabling legislation? No

WHAT IT DOES

Every property owner has rights, including the right to develop. By transferring these specific development rights from areas designated for preservation to areas designated for growth, localities can encourage denser, more affordable housing options and retain existing rural character by avoiding sprawl.

HOW IT WORKS

Virginia state code (§15.2-2316.2) permits localities to adopt TDR ordinances. In each ordinance, localities will designate “sending” areas that transfer development rights to “receiving” areas where the additional development rights are added. Property ownership does not change. Parcels with forfeited (transferred) development rights will carry deed restrictions that preserve open space. Parcels that receive additional development rights will use those credits to increase density which can lower costs.

WHO IS RESPONSIBLE

• Local planning staff: research and draft ordinances; undertake community outreach
• Local planning commission: review and recommend ordinances
• Board of supervisors or city council: take final action on adoption

HOW IT WILL ACHIEVE GOAL:
Suburban homeownership has traditionally been more affordable; but it has become steadily more difficult to obtain. A TDR program would help increase housing density in neighborhoods that have been collectively chosen for additional growth. Allowing additional density per acre will help developers offer lower-priced homes for ownership.

KEY CHALLENGES:
• TDR programs are complex and require up-front research, along with education for property owners and developers.
• Designation of specific sending and receiving areas may be politically challenging.
• Only a few other localities in Virginia have adopted and operated TDR programs.

GEOGRAPHY TAG(S):
Chesterfield, Hanover, Henrico

New or existing? New
Creation or preservation? Creation
Requires new funding? No
Requires new state enabling legislation? No

WHAT IT DOES

In the 1950s the average home size was less than 1,000 square feet. Over the next 50 years, it more than doubled. The typical, first-time homebuyer in Richmond has a household size of less than two. Both millennials and downsizing baby boomers are looking for smaller homes. Smaller homes are not only cheaper to build, but also less expensive to heat and cool.

HOW IT WORKS

Builder and developer profits are tied to home prices, which are influenced by lot sizes, home sizes, finishes, and features. These factors are guided in large part by local rules and regulations. If these guidelines favor larger homes on larger lots, the industry will seek greater returns on the fewer number of homes allowed per given acre. Localities should examine ways their land use regulations are preventing smaller, more affordable homes from being developed.
Factory-built housing can also help to reduce cost and provide smaller homes. Cost reductions are achieved by reduced material waste, lower labor costs and faster production as a result of controlled environment. These homes may be manufactured (built and delivered as one unit that conforms to HUD guidelines) or modular (built and delivered as several modules that are assembled on-site to local building codes). Affordable housing providers are also experimenting with new innovations in the industry such as 3-D printing and the use of recycled shipping containers.

WHO IS RESPONSIBLE

• Local planning and permitting staff: identify any barriers to small home production and recommend changes, ensure that smaller homes are included in future land use planning efforts
• Developers and builders: increase the number of small homes produced in new developments
• Lenders: expand financing options for smaller homes, including manufactured and modular homes

HOW IT WILL ACHIEVE GOAL:
Smaller homes are much more likely to cost less to build, and therefore much more likely to be sold at a price that is attainable to low- and moderate-income buyers.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond

KEY CHALLENGES:
• Small homes are perceived to be inconsistent in neighborhoods with larger homes. These homes are sometimes opposed on the belief that they will cause values to drop, even though there is no evidence of that.
• Large lots have values that encourage or require higher priced, larger homes to be built on them.

New or existing? New
Creation or preservation? Creation
Requires new funding? No
Requires new state enabling legislation? No

WHAT IT DOES

Land banks are tools used by local government to facilitate the transition of vacant, deteriorated and underutilized property into productive use. Land banks can also aggregate smaller parcels and prepare larger sites for community-oriented development, including affordable housing.

HOW IT WORKS

In Virginia, localities can create land banks in a variety of ways—including by designating an existing nonprofit entity to serve in that role. As of 2019, the City of Richmond, Chesterfield County, and Henrico County have designated the Maggie Walker Community Land Trust to play that role for their communities. Land banks acquire properties in a variety of ways, including the direct sale of tax delinquent property, publicly owned property that is surplus, donation, market rate acquisitions with capital provided by the locality or through grants and donations. The land bank will then partner with community development organizations to ensure the parcels are used for affordable housing, urban green space, and other beneficial uses.

WHO IS RESPONSIBLE

• City and county attorney offices: identify tax delinquent and surplus parcels available for transfer to the land bank; complete necessary legal procedures
• MWCLT: as the region’s land bank, secure and stabilize parcels, work with communities and recipient organizations to identify desired uses
• Community development organizations: partner with land bank and develop housing on properties received by land bank
• Board of supervisors or city council: establish priorities and guidelines via resolution; review and approve transfers to land bank

HOW IT WILL ACHIEVE GOAL:
Land banks increase the flow of property to the development community, both nonprofit and for profit. The shortage of land available for development is a key constraint to production. Because most parcels available for land bank acquisition are single-family lots and homes, this solution is critical for increasing opportunities for affordable homeownership.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond
Regional collaboration

KEY CHALLENGES:
• Flow of parties to the bank must be substantial in order to have a community impact.
• The land bank will be challenged, if the only properties in its portfolio are in low value markets where development subsidies are costly or development is infeasible.
• Preserving this land asset for affordable housing means foregoing short-term, immediate revenue to the jurisdiction in the form of tax auction or other proceeds.

New or existing? Existing in Richmond and Chesterfield; designation in-progress in Henrico
Creation or preservation? Primarily creation
Requires new funding? Yes
Requires new state enabling legislation? No

WHAT IT DOES

Cohousing fosters multi-generational living and is designed to provide common spaces surrounded by private homes. Neighbors use these spaces for recreation, cooking for one another, and working collaboratively. Housing cooperatives, also known as co-ops, allow residents to collectively own and control the developments in which they live.

HOW IT WORKS

Cohousing communities are funded by its members. The more members a community has, the more resources that will be available for neighborhood amenities. In housing cooperatives, residents buy membership stock in a cooperative cooperation, which owns the land, building, and any common areas. Residents have the exclusive right to occupy a specific unit. A limited equity co-op allows low-income members to purchase shares at below market prices.

WHO IS RESPONSIBLE

• Residents
• Neighborhood Groups

HOW IT WILL ACHIEVE GOAL:
Alternative homeownership can provide residents access to wealth creation and financial independence when traditional homeownership options are too limited or expensive. It could allow residents of manufactured home communities to pool resources and create their own cooperative in which they collectively own the land, utilities, and community facilities.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond
Regional collaboration

KEY CHALLENGES:
• Cohousing and co-ops are not common in the Richmond region, thus the process could be complicated with few local models to use as a guide.
• Education efforts will be necessary to increase resident understanding of the many nuances to pursuing non-traditional homeownership.

New or existing? New
Creation or preservation? Preservation
Requires new funding? Yes
Requires new state enabling legislation? No

Goal 3

Ensure that our Growing Senior Population is Safely and Affordably Housed.

Seniors are the most rapidly growing segment of the region’s population, including the fastest growing component of our homeless population. By 2030, one in four residents of our region will be over the age of 65. Many of these seniors wish to “age-in-place,” but a variety of strategies will be needed to address these needs in the next two decades.

Major Findings:

• The number of mortgage-burdened seniors has more than doubled since 2000—from 7,800 to 16,200. More than one in four senior homeowners are financially burdened by their mortgage.
• Over 70% of all senior homeowners live in a house valued below $200,000, functionally preventing them from moving into new, age-restricted homes that cost more.
• By 2040, the region will need to help 37,000 new senior households age-in-place or find new homes.

WHAT IT DOES

Senior tax relief programs enable seniors on fixed and low incomes to pay less in real estate property taxes. This is particularly impactful when seniors are in aging housing with deferred maintenance and in real estate markets where property tax assessments are rapidly rising. Senior tax relief programs can keep low income seniors in their housing.

HOW IT WORKS

All jurisdictions in the Richmond Regional Housing Framework footprint currently have senior tax relief programs that vary in their requirements but generally achieve similar outcomes. In each jurisdiction, however, the number of eligible households exceeds the number of program users meaning that the programs are not reaching all eligible households. Through additional outreach, advertising and increased flexibility around eligibility, the programs could be more widely utilized. Additionally, jurisdictions should consider enhancing the benefits or increasing the pool of eligible homeowners.

WHO IS RESPONSIBLE

• Local finance and property tax assessment staff
• Local governing bodies to approve changes
• Community development organizations
• Social service organizations

HOW IT WILL ACHIEVE GOAL:
Reducing costs to senior homeowners makes housing more affordable for seniors who are some of the most housing cost burdened households in our region.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond

KEY CHALLENGES:
• Advertising campaigns to increase program awareness must be broad and sustained.

New or existing? Existing
Creation or preservation? Preservation
Requires new funding? Yes, but indirect in the form of foregone tax revenue
Requires new state enabling legislation? No

WHAT IT IS

Many lower income seniors are living in homes they can no longer maintain. The result can be unsafe conditions for occupants, e.g., a leaking roof or plumbing that degrades structural elements of the home and can cause the growth of mold affecting indoor air quality. Older homes may also lack insulation and other energy efficient materials resulting in very high utility bills in order to keep the home temperature comfortable. Rehabilitation assistance can help these households address the conditions in their homes that are needed to ensure a safe and decent living environment.

HOW IT WORKS

The locality provides assistance to an intermediary (usually a nonprofit organization) that has the ability to assess the critical needs and address them, either by using its own staff to carry out the improvements or by contracting with and supervising the work through a private home repair company. Skilled volunteers can address some types of critical repairs (stairs, railings), while licensed vendors will need to address others (roofs, heating). Current lead abatement services provided by nonprofit organizations are also a major component of this work that should be continued and expanded.

WHO IS RESPONSIBLE

• Local government housing staff: identify households in need and manage waiting list
• Social services and healthcare staff: identify needs through home visits or other client interactions.
• Nonprofit service providers: conduct and certify income qualification and other eligibility requirements; perform home inspection/assessment; complete the needed work or contract with another provider to do so
• Private contractors: perform needed repairs

HOW IT WILL ACHIEVE GOAL:
With critical repairs completed, residents have a safe and secure environment. Residents will be able to delay the need to move to alternate housing, preserving housing stability.

KEY CHALLENGES:
• Demand for these services substantially exceeds resources.
• In some cases, conditions are too severe to repair the underlying issues without major, intrusive work—or complete replacement of the home.
• Household members may have other critical needs, including healthcare issues, that should be addressed simultaneously.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond

New or existing? Existing
Creation or preservation? Preservation
Requires new funding? Yes
Requires new state enabling legislation? No

WHAT IT DOES

While many aging baby boomers express a preference to “age-in-place” and remain in the communities where they have family, social and economic connections, there is also a need for more housing to serve very low-income seniors. Most of this housing was built using Section 8 and public housing programs that have not produced new, additional housing units in decades. Consequently, waiting lists are usually long for this type of deeply affordable housing. Age-segregated housing does have the advantage of making the delivery of health and other social services less expensive and more efficient.

HOW IT WORKS

The Low-Income Housing Tax Credit program is the primary vehicle for producing new affordable rental housing. But the LIHTC program does not provide rental assistance for tenants, so other strategies must be used to achieve lower rents low enough for seniors on fixed incomes. These can include rent skewing, additional subsidies, and the use of project-based housing vouchers from a local voucher program.

WHO IS RESPONSIBLE

• Private and nonprofit developers: explore partnerships with VHDA and RRHA for the creation of new low-income senior housing
• VHDA: provide LIHTC allocations and other sources of funding/financing
• RRHA: provide HCVs for seniors and offer development financing options

HOW IT WILL ACHIEVE GOAL:
This will increase housing options for low-income seniors who wish to downsize to age restricted communities. This approach has the added benefit of freeing up their home (which was likely underutilized) for the next generation of homebuyers.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond

KEY CHALLENGES:
• Rental assistance that enables very low-income households to afford the apartments is difficult to locate—often requiring complex layers of financing.

New or existing? Existing, but very limited.
Creation or preservation? Creation
Requires new funding? Yes
Requires new state enabling legislation? No

WHAT IT DOES

Accessible housing built to universal design standards is housing that meets the needs of seniors as well as the disabled. Accessible housing works better for everyone (e.g., parents with strollers, persons undergoing temporary rehab) and are accessible by everyone, regardless of their ability.

HOW IT WORKS

Provide financial incentives to builders/developers to incorporate universal design and key accessibility features such as: no step entries, wider doors and passageways, first floor bedrooms and accessible baths. Localities may also seek to expand and improve Virginia’s Livable Home Tax Credit (LHTC) that offers a $5,000 credit to homeowners or builders who meet these basic requirements.

WHO IS RESPONSIBLE

• Local government
• Community development organizations
• Social service organizations

HOW IT WILL ACHIEVE GOAL:
Expands the housing options of seniors who may be interested in downsizing from the home where they raised their family but who still wish to live in a single-family, detached home.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond

KEY CHALLENGES:
• Costs to build to accessible standards may be slightly higher; there may also be a misperception of market resistance to accessibility.
• Realtors report they have difficulty locating homes that meet the accessibility preferences of their buyers.
• Realtors report that they sometimes have difficulty selling properties with significant or visually apparent accessibility improvements, for example, a ramp on the front of the house.
• Accessibility improvements can be specific to the needs of the homeowner - not necessarily universal to all persons with a disability.
• There is no well recognized clearinghouse to connect buyers looking for accessibility with sellers whose homes have those features.

New or existing? New
Creation or preservation? Both
Requires new funding? Optional (if state LHTC expanded)
Requires new state enabling legislation? No

WHAT IT DOES

Many seniors wish to remain in their homes. But they may put themselves at risk by doing so, if they lack the resources to make accessibility improvements that will keep them safe. Home assessment services enable seniors to obtain consistent, high-quality assessments about what they need, what is possible in their home, and how to pay for it.

HOW IT WORKS

A network of qualified home assessors is established (often trained individuals) who hold credentials in occupational therapy and related fields. The assessor evaluates the current and future needs of the homeowner. They prepare a list of needed improvements. The program manages the costs and implementation. These assessments are currently available to higher income households; but for low- and moderate-income homeowners, they are an unaffordable luxury. The costs can be defrayed for very low-income homeowners with grants and/or secured by a lien on the property.

WHO IS RESPONSIBLE

• Nonprofit housing providers: manage and operate program, especially those with healthcare partners that can build health need priorities into the system
• Social service organizations: refer clients to home assessors
• Local governments: provide funding

HOW IT WILL ACHIEVE GOAL:
Home assessments are an extremely helpful way to give seniors a clear path forward for needed home improvements. More seniors will be able to safely age in place for longer periods of time. These programs may also be expanded to help serve families with children and other vulnerable households.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond
Regional collaboration

KEY CHALLENGES:
• Will require new funding and the development/certification of trained home assessors.
• A new or existing entity will need to play the role of program administrator.
• Funding for assessments will need to be identified, especially to cover cases where accessibility improvements are not feasible.

New or existing? New
Creation or preservation? Preservation
Requires new funding? Yes
Requires new state enabling legislation? No

WHAT IT DOES

Programs like SeniorNavigator and No Wrong Door are designed to help seniors understand and successfully work through confusing programs and program requirements. SeniorNavigator is part of VirginiaNavigator, a 501(c)3 nonprofit organization that provides online directories of services to the aging, veterans, persons with disabilities, and anyone else searching for assistance. No Wrong Door is a virtual network that connects providers throughout Virginia together to efficiently and effectively connect seniors with services. As a public/private partnership, it is supported by federal, state, and local agencies along with the healthcare industry.

HOW IT WORKS

These programs provide a single point of entry, where information about an entire range of programs and services are aggregated in one website though links and brief explanations. Housing is one area of assistance within a very large database of programs and services.

WHO IS RESPONSIBLE

• State and local agencies: maintain/increase support to both programs; ensure reliable and accurate information
• Social service agencies and nonprofits: provide counselors available to help seniors one on one

HOW IT WILL ACHIEVE GOAL:
Access to understandable and actionable information is critical to increasing participation by seniors.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond
Regional collaboration

KEY CHALLENGES:
• There are many programs and services included in these resources—that may also create confusion on the part of users. Housing is just one of many services that are listed.
• Private vendors and service providers listed on these sites may not be fully vetted and subject to regular certification. Seniors may need assistance in dealing with outside contractors.
• Web based information and navigation is less helpful to low-income seniors who may not have internet access or to any seniors who are uncomfortable with using web-based resources.

New or existing? Existing
Creation or preservation? Both
Requires new funding? Yes, but modest
Requires new state enabling legislation? No

WHAT IT DOES

For the last several years there has been increasing awareness of and attention paid to the “social determinants” of health—those factors beyond healthcare treatment that have a significant influence on a person’s health. Key social determinants include the home and the neighborhood where one lives. One result of the focus on this connection between health and environment has been the growing engagement of hospitals and other healthcare providers in housing and community development. The Richmond region has already seen the development of several of these partnerships and the opportunity exists to expand these in ways that achieve the objectives of both affordable housing providers and the healthcare industry.

HOW IT WORKS

Healthcare providers and housing specialists partner around a specific program objective. For example, Bon Secours has supported the development of affordable homeownership opportunities in the East End through grant support for partner housing agencies that build and sell new and renovated homes. VCU Health has partnered on a program to reduce childhood asthma by partnering with housing advocates and enforcing housing quality regulations. Opportunities to create partnerships that focus on senior health and safety can benefit from best practices in other communities around the country. Examples include the Safe at Home program operated by AHIP (Albemarle Housing Improvement Program) and the Home Assessment Pilot developed by Virginia Accessible Housing Solutions.
The improvement of living conditions has the benefit of reducing illness and injury, thereby resulting in reduced medical expenses. For example, improving home accessibility features for seniors has been shown to reduce emergency room visits and hospitalizations as a result of falls and other accidents. This makes programs like these good candidates for social impact bonds.

WHO IS RESPONSIBLE

• Hospitals and other care providers
• Housing and service providers
• Area agencies on aging and other senior service centers
• Health departments and other local government agencies

HOW IT WILL ACHIEVE GOAL:
Many seniors are now choosing to “age-in-place” and it is critical for their safety to address physical conditions in the home that may not be conducive to aging, loss of mobility and other factors. Healthcare partnerships can directly address these conditions with targeted improvements to this housing stock. Other types of senior housing, including independent living and assisted living can also benefit greatly from these partnerships, provided that affordability remains a primary goal.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond
Regional collaboration

KEY CHALLENGES:
• Housing providers and healthcare providers work in entirely different systems—each with their own language—requiring steep learning curves on both sides for effective collaboration.
• Medicaid has the potential to provide a new source of funding for housing improvements, including affordability, but will require new strategies and greater understanding by housing providers.

New or existing? Existing. Both Bon Secours and VCU have initiatives aimed at improving the health and affordability of the housing stock.
Creation or preservation? Both
Requires new funding? No additional public subsidy; one key will be accessing Medicaid
Requires new state enabling legislation? No; may require a new Medicaid waiver initiative

Solution 1-A: Increase the amount of land available for multifamily housing development in residential zones (and commercial zones where appropriate), especially in “communities of opportunity.”
Solution 1-D: Reduce barriers to accessory dwelling units in residential districts.
Solution 2-G: Build smaller, less expensive homes to meet market demand and replace poor-quality housing.

Goal 4

Improve Housing Quality and Ensure Better Health and Safety for Residents.

Thousands of households in the region occupy housing that is unsafe and in disrepair. These conditions typically affect the poorest and most disadvantaged, but the affected stock is also often the most affordable. Rehabilitation and replacement efforts are necessary to ensure a quality home for every household in the region.

Major Findings:

• Thousands of dedicated affordable apartments across the region are over 50 years old and require significant investments to stay safe and up to date, including public housing.
• Many low-income residents in older, unsubsidized “naturally occurring” affordable housing throughout the inner-ring suburbs are at risk of displacement as property values and rents rise. These include over 2,000 mobile homes in manufactured home communities.

WHAT IT DOES

These programs are at the core of the region’s efforts to address substandard housing. Nonprofits such as project:HOMES, Rebuilding Together, and Richmond Metropolitan Habitat for Humanity provide grants and deferred loans to low-income homeowners to make critical home improvements including heating, roof repairs, electrical improvements, structural corrections, insulation and energy improvements, lead abatement, ramps and other accessibility features, as well as other work that addresses key health and safety deficiencies.

HOW IT WORKS

Nonprofit program providers conduct eligibility reviews, home assessments, and work write-ups as well as oversight of contractors doing the work. Nearly all of these programs are restricted to households with incomes below 80% of AMI. For seniors above this level, there are few coordinated programs to help with repairs and improvements, increasing the challenges of access to such help and the risks of contracting for work that is unnecessary, overpriced or poor quality. Existing programs are funded by a combination of public subsidies and private donations.

WHO IS RESPONSIBLE

• Local governments: provide local and federal funding
• Private donors: provide funding
• Nonprofit program providers: deliver services, monitor programs, communicate needs and challenges

HOW IT WILL ACHIEVE GOAL:
These efforts address the most serious issues within the existing housing stock. Nonprofits providing this service are technically and financially efficient.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond

KEY CHALLENGES:
• These programs are significantly underfunded when compared to need.
• Typically, only owner-occupied properties qualify for assistance, leaving much of the rental housing stock unaffected.

New or existing? Existing
Creation or preservation? Preservation
Requires new funding? Yes
Requires new state enabling legislation? No

WHAT IT DOES

The City of Richmond is home to some of the oldest public housing in the nation. RRHA’s 3,800 public housing apartments are home to some of the region’s most vulnerable households. HUD has been encouraging the revitalization and replacement of this housing stock for the past several decades—using a variety of tools, including the Choice Neighborhood Initiative (CNI), the Rental Assistance Demonstration Program (RAD), and Demo/Dispo (Section 18).

HOW IT WORKS

Most strategies for the revitalization of public housing involve shifting the funding platform from public housing to Section 8, which is a better-funded federal program and more reliable source of operational support. Because public housing is often the housing of last resort for many households, it is critically important that residents be involved in the planning process and protected from displacement during revitalization.
A key consideration in transformation is whether all of the existing stock will be rehabilitated or replaced (“one for one replacement”); or, whether some residents who desire to move to other neighborhoods will be given housing choice vouchers and assisted in those moves with counseling and support services. If the latter option is chosen, then “one for one replacement” cannot be achieved—but residents are given greater choice as part of the transformation. Because many of the older public housing communities were constructed at a relatively low density by modern standards, transformation will give the opportunity for the development of some workforce and market rate housing while still producing enough replacement and rehabilitated housing to meet the needs of all residents who wish to return to their neighborhood. Such an approach will allow for mixed income communities and increased community amenities while still avoiding displacement.
These development decisions will need to be made by RRHA in consultation with residents. HUD must approve all plans for transformation.

WHO IS RESPONSIBLE

• RRHA staff and board: plan, design, and implement revitalization efforts
• Resident groups: inform and guide implementation and have a direct say in development decision-making
• Existing and new service organizations: provide support/wrap-around and transition services to residents; will scale significantly during public housing transformation
• City of Richmond planning and community development staff: assist RRHA via technical assistance and land use changes
• Richmond City Council and Mayor: provide infrastructure and financial gap support for revitalization

HOW IT WILL ACHIEVE GOAL:
Public housing represents 3,800 of the most affordable rental homes in the city. Due to their age and condition, without revitalization, these buildings will become inhabitable and fall out of the affordable housing stock over the next decade. Transforming and preserving these affordable homes is a major, necessary objective.

GEOGRAPHY TAG(S):
Richmond

KEY CHALLENGES:
• The revitalization of this housing stock will require over $500 million. This capital will consist of debt and tax credit equity, but gap funding will also be required. A major effort will be needed to assemble this capital.
• Resident trust and communication are critical to the success of this effort. Transparency and the building of this trust is key. Without resident support, progress is difficult. An effective method of continuous resident input must accompany the revitalization process.
• With many residents choosing to stay in their neighborhoods, it will be important to substantially increase the level of services to residents for education, job training and placement, financial literacy, homeownership education and a range of other programming that will help them to increase income and escape from poverty.

New or existing? Primarily new. Some limited revitalization is underway, including the initial phase of the transformation of Creighton Court.
Creation or preservation? Creation and preservation
Requires new funding? Yes (significant)
Requires new state enabling legislation? No

WHAT IT DOES

Some of the poorest quality housing in the region exists within aging mobile home parks. Prior to 1976, no standards were applied to the construction of manufactured homes. In 1976 HUD promulgated national safety, quality, and efficiency standards. Consequently, many households still occupy homes in these parks that are unsafe and in desperate need of investment. Revitalizing these communities involves rehab work for viable housing, full home replacement when homes are uninhabitable, and infrastructure upgrades for utilities and amenities.

HOW IT WORKS

Manufactured home community revitalization is often performed by nonprofit organizations, or a coalition of nonprofits. However, for profit owners can also be partners in improving these communities. To address the unique housing challenges in parks, revitalization often includes:
• Rehabilitation and repairs for homes that need minor improvements;
• Replacement of very old and very poor condition homes; and
• Upgrades to park infrastructure (roads, electricity hookups, water and sewer lines) and amenities (community space, sidewalks, playgrounds).

The work may be supported by public funds, private donations, and favorable loan products from housing finance agencies. In some cases, nonprofits may acquire parks to facilitate improvements efficiently and provide residents with greater stability.

WHO IS RESPONSIBLE

• Local governments: provide funding and coordinate any necessary zoning reforms
• Nonprofit housing providers: identify needs and undertake revitalization
• Manufactured Home Community Coalition of Virginia: coordinate efforts between localities and providers, provide technical assistance and connections to outside resources
• Lenders: offer favorable financing products
• Housing manufacturers: produce new, high-quality, affordable homes

HOW IT WILL ACHIEVE GOAL:
This stock is among the poorest quality in the region and its improvement is a high priority in addressing substandard housing. When done properly, mobile home parks can provide a viable source of affordable housing.

GEOGRAPHY TAG(S):
Richmond, Chesterfield

KEY CHALLENGES:
• Household incomes in some communities are extremely low with very limited capacity to afford higher quality housing, even with assistance.
• In the Richmond region, many parks are home to undocumented immigrants who may not qualify for some federally funded assistance and who may be fearful of participating in revitalization activities.
• New manufactured homes are usually financed using high interest personal property loans; traditional mortgage lenders have been reluctant to make home loans on manufactured products.
• Local land use regulations may stymie by-right replacement of homes in grandfathered mobile home park zoning districts.

New or existing? Existing; some initial efforts are underway in Richmond and Chesterfield
Creation or preservation? Preservation
Requires new funding? Yes
Requires new state enabling legislation? No

WHAT IT DOES

Holistic code enforcement integrates models of incentive and cooperation with property owners into the municipal enforcement process. Instead of an adversarial and punitive function, code enforcement is used as a tool to understand a jurisdiction’s housing needs and alleviate them.

HOW IT WORKS

Holistic code enforcement works well when a jurisdiction has programs and incentives for owners to use to remediate code violations. Education of property owners about building maintenance, healthy housing, and code requirements is paired with financial resources and a collaboration between code enforcement officials and owners. Holistic code enforcement can be proactive; meaning that properties are inspected not when a complaint or emergency situation occurs, but rather on a routine basis.

WHO IS RESPONSIBLE

• Local code enforcement departments: pilot and implement new procedures

HOW IT WILL ACHIEVE GOAL:
Holistic code enforcement provides two additional benefits beyond traditional code enforcement. First, because of its proactive nature, holistic code enforcement helps jurisdictions to develop a reliable data set of existing housing conditions. In the absence of this, jurisdictions have scant information about the extent and location of housing condition needs. Second, holistic code enforcement is believed to lead to a greater incidence of home improvements than traditional code enforcement, because of its collaborative and supportive relationship with the homeowner.

KEY CHALLENGES:
• Requires home repair programs or other financial supports to be funded.
•Requires additional administrative support than traditional code enforcement due to the increased level of interaction with the homeowner.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond

New or existing? New
Creation or preservation? Preservation
Requires new funding? Yes
Requires new state enabling legislation? No

WHAT IT DOES

Property assessed clean energy (PACE) programs create a way for building owners (and homeowners) to make energy improvements to their property without the need to raise the front-end capital for the improvements themselves. Costs are repaid gradually through special assessments on the property. Improvements could include solar panel installations, high efficiency HVAC equipment, insulation, air sealing, new windows and similar improvements. Programs for commercial buildings (including multifamily apartments) are known as C-PACE, while residential programs for homeowners are known as R-PACE.

HOW IT WORKS

PACE programs are typically administered by a PACE authority that can operate at the state, regional or even local level. The PACE authority raises the capital for the improvements to the building. The local government agrees to participate in the program and secures the capital with repayments through real estate tax assessments and billings. The theory behind PACE is that both the current and future owners of the property will share in the utility savings that the improvements create. Through the PACE mechanism, these costs are shared by all the beneficiaries. Currently, Arlington County is the only community in Virginia with an operating C-PACE program. Five other jurisdictions are in the process of developing a program (Alexandria, Fairfax, Loudoun, Fredericksburg, and Petersburg), while the City of Richmond just recently passed an authorization to develop one.

WHO IS RESPONSIBLE

• Local housing staff: design the program with technical experts
• Local assessor and finance departments: implement the assessments and repayment; pass payments through to PACE to service the debt.
• Board of supervisors or city council: take final action on adoption
• Regional or statewide PACE authority: administer the program

HOW IT WILL ACHIEVE GOAL:
Energy improvements can replace outdated, inefficient systems and other substandard conditions. Energy improvements may also correct life safety issues with natural gas, carbon monoxide build-up and other indoor air quality issues.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond

KEY CHALLENGES:
• Like many new programs that change paradigms of how housing programs operate, PACE does meet with some market reluctance. This is particularly true for single-family homeownership programs, where both local governments and the real estate community have expressed reservations.
• The PACE program administrator must have technical expertise in energy efficiency, building construction and finance. The program must be able to ensure that the right improvements are made, the pricing is fair, and the work is properly completed.

New or existing? Primarily new. The City of Richmond adopted a C-PACE program in November of 2019.
Creation or preservation? Preservation
Requires new funding? No
Requires new state enabling legislation? Yes, for R-PACE. Current state code allows for C-PACE only.

WHAT IT DOES

GHHI is a nationally supported initiative that focuses on identifying and correcting environmentally harmful conditions in the home. This can include mold, lead, poor air quality and other conditions that can have negative health effects on occupants—especially children. Asthma and other respiratory illnesses are often triggered by environmental conditions in the home. Additionally, energy efficiency improvements are an important part of GHHI that directly address deficiencies that can create dangerous conditions for residents during periods of extreme cold or heat.

HOW IT WORKS

The design of the program is to create a collaborative and coordinated approach among organizations and agencies that deliver services to low income households who frequently live in older homes with substandard conditions. The program design calls for a single point of entry and a consistent home assessment to determine health risks. This is followed by coordinated actions to address these conditions.

WHO IS RESPONSIBLE

• Local housing and social services offices
• Local health departments
• Housing providers
• Hospitals and other healthcare providers
• Local governing bodies must adopt and financially support the initiative

HOW IT WILL ACHIEVE GOAL:
This initiative improves the quality of the housing stock by eliminating health hazards, including energy improvements that can make the home environment safer and more comfortable.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond

KEY CHALLENGES:
• Requires changing the procedures of a wide range of housing and service providers in order to coordinate and collaborate.
• A new entity is typically established to manage the program.
• Will require new resources to increase the number of homes that can receive assistance.
• GHHI national provides technical assistance during start-up, but this must be financially supported by the locality or other community resource.

New or existing: Existing. Richmond has launched a GHH Initiative with a focus on lead removal.
Is this creation or preservation? Both, but primarily preservation
Requires additional subsidy? Yes
Requires new state enabling legislation? No

WHAT IT DOES

Deeper knowledge about the location of poor-quality housing and the details of conditions will lead to a more efficient, targeted and prioritized allocation of home repair and rehabilitation resources.

HOW IT WORKS

Local jurisdictions can collect additional housing quality data by utilizing the existing code enforcement in the jurisdiction. Through engaging in proactive code enforcement, the locality can begin to construct a dataset of housing quality. Proactive code enforcement can benefit renters of poor-quality housing who may fear retaliation from a landlord and therefore do not report poor conditions. Periodic inspections do not replace complaint-based inspections; however, inspections are also conducted in response to tenant reports of possible violations.

WHO IS RESPONSIBLE

• Local code enforcement departments: standardize data collection and reporting processes

HOW IT WILL ACHIEVE GOAL:
Better housing quality data will allow localities to more efficiently deploy home improvement resources. Thoroughly understanding needs also helps build support for additional funding.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond

KEY CHALLENGES:
• Developing a dataset using proactive code enforcement requires consistency and regularity in inspections to maintain a reliable dataset.
• Trust and access are required to build a quality dataset.

New or existing? New
Creation or preservation? Preservation
Requires new funding? Yes (additional staff time)
Requires new state enabling legislation? No

WHAT IT DOES

Many housing and non-housing organizations (visiting nurse programs, EMTs, food banks, churches, etc.) informally gather data on housing conditions through their intake processes and interactions with clients. This data could be collected systematically to create a dataset of housing quality and to make targeted code enforcement outreach to improve conditions.

HOW IT WORKS

Jurisdictions would develop a voluntary database for social service and other organizations to contribute housing quality data by address. The dataset would be used by the jurisdiction to address critical and unsafe conditions in the home, target code enforcement, and improve housing quality.

WHO IS RESPONSIBLE

• Local code enforcement departments
• Social service organizations

HOW IT WILL ACHIEVE GOAL:
Increased data sharing is necessary to better understand the scope and severity of our region’s housing quality issues. Service providers who regularly visit residences, or who regularly discuss housing issues with clients, could play a key role in the collection of this data.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond

KEY CHALLENGES:
• Organizations would have to be regularly reminded and encouraged to be diligent in data collection and sharing in order to make the tool effective.

New or existing? New
Creation or preservation? Preservation
Requires additional subsidy? No
Requires new state enabling legislation? No

Solution 3-B: Increase housing rehab, home accessibility and critical home repair assistance programs.
Solution 3-E: Coordinate home assessment services with aging in place improvements.
Solution 3-G: Expand program linkages with hospitals and healthcare providers.

Goal 5

Expand Housing Stability and Stop Displacement.

The region is growing and housing prices are rising—especially in urban neighborhoods desired by both millennials and baby boomers. Demand for these neighborhoods accelerates displacement of lower income residents.

Major Findings:

• There are 3,600 fewer Black homeowners in Richmond today than in 2000. In Jackson Ward and Church Hill, the number of Black homeowners decreased by roughly 30%, while the number of White homeowners increased by more than 150%.
• Without intervention, over 40% of all of our dedicated affordable rental homes will fall out of compliance (affordability) in the next 15 years.

WHAT IT DOES

Richmond has one of the highest eviction rates in the nation. Our public housing communities are no exception, where eviction rates are below the regional mark but are still significant. However, because public housing is often the “housing of last resort” for families, the consequences of eviction can be much more dire—including exclusion from other forms of housing assistance.
Richmond currently has a pilot “eviction diversion” program in place. Diversion programs operate through the court system and have several downsides. By the time the tenant goes to court, they may already be substantially behind in their rent and diversion programs require that tenants “catch-up” within three months after being accepted into the program. Prevention programs, on the other hand, start as soon as the tenant misses the first payment. Case managers work to uncover the root cause or causes of the delinquency and strive to correct those conditions with the goal that the tenant avoids future delinquency.

HOW IT WORKS

RRHA and CARE (Campaign to Reduce Evictions) are developing a pilot eviction prevention program for Mosby Court—one of the “Big Six” public housing communities in the City. The program will provide financial assistance to residents who fall behind in their rent payments as well as counseling support through dedicated case managers. The focus of the program is to intervene as early in the process as possible, before the tenant falls too far behind on their rent payments.

WHO IS RESPONSIBLE

• RRHA: provide social workers
• Area Congregations Together in Service (ACTS): administer funding
• CARE: design and assess program

How it will help achieve goal:HOW IT WILL ACHIEVE GOAL:Preventing evictions by identifying delinquency early and understanding its causes will increase housing stability for some of Richmond’s most vulnerable households.

GEOGRAPHY TAG(S):
Richmond

KEY CHALLENGES:
• Solving longer term structural challenges that the family is facing will be difficult and will require the participation of other partners.
• Limited funding may lead to a minimal impact.

New or existing? New
Creation or preservation? Preservation
Requires new funding? Yes
Requires new state enabling legislation? No

WHAT IT DOES

The City of Richmond has launched an eviction diversion pilot aimed at reducing evictions in the City. The court-based program provides an alternative negotiation process that allows tenants and landlords to arbitrate payment issues without resorting to eviction.

HOW IT WORKS

The judge in District Court will refer up to 500 households into the diversion program during the first year. The key elements of the program are:
• The use of pro bono attorneys as in-court mediators to negotiate agreements between tenants and landlords.
• Financial literacy education as a requirement for tenants in the program.
• Access to other supportive services would be available.
• A payment plan agreement to ensure rent due is received on time. Financial assistance is made available for tenants who meet program qualifications.

WHO IS RESPONSIBLE

• Richmond District Court: refer defendants to program
• HOME of Virginia: administer and monitor program
• Central Virginia Legal Aid Society (CVLAS): provide pro bono attorneys

HOW IT WILL ACHIEVE GOAL:
The program will prevent and keep families housed, while they receive services and follow a repayment plan.

GEOGRAPHY TAG(S):
Richmond

KEY CHALLENGES:
• The delinquent tenant must make a down payment as part of entry into the program.
• The repayment plan cannot exceed three months.
• Program terms may be difficult for some tenants to meet.
• Intensive counseling support is not explicitly provided.

New or existing? New
Creation or preservation? Preservation
Requires new funding? Yes, to sustain program after pilot period
Requires new state enabling legislation? No

WHAT IT DOES

Current tax relief programs in the city and the counties are restricted to seniors and the permanently disabled who meet certain eligibility guidelines, including income. In fact, the Virginia constitution limits the basis on which a locality can provide tax relief. Long-time property owners are not included as an eligible category. In addition, the constitution requires that all properties be assessed at fair market value; restricting assessments is also not permissible. For that reason, alternative approaches to assist long-time neighborhood residents at risk of displacement are needed.

HOW IT WORKS

Localities may defer a portion of tax payments when annual assessments increase above a determined trigger amount. Another approach would be to provide a long-term residency rebate for certain owners who are at risk of displacement. In the City of Richmond, where housing demand is very strong, assessments have increased by double digits in the past several years, placing financial burdens on non-senior, lower income homeowners.

WHO IS RESPONSIBLE

• Local assessors and finance departments: design and administer program
• Board of supervisors or city council: take final action on any necessary changes to local code

HOW IT WILL ACHIEVE GOAL:
By reducing housing costs for homeowners who are at risk of displacement in communities where values are rising rapidly, these initiatives will help keep some long-time residents in place and increase housing stability.

GEOGRAPHY TAG(S):

KEY CHALLENGES:
• Virginia constitutional restrictions make such programs difficult to design and manage.
• Localities may not want to forego the deferred tax payments.
• Determining eligibility can be problematic - what constitutes a “long time” resident, how to measure the risk of displacement.
• Programs don’t address renters who are much more vulnerable to displacement than owners.

New or existing? New
Creation or preservation? Preservation
Requires new funding? Yes
Requires new state enabling legislation? No

WHAT IT DOES

CBAs are agreements that are developed between communities and developers that specify the commitments of both parties. They outline in detail what amenities and other benefits the developer agrees to provide to the community as a part of the development project. CBAs may involve many other institutional actors, including hospitals, universities, utilities, public service authorities, and more.

HOW IT WORKS

A contract is entered into that details specific actions and deliverables committed to by the developer. This might include open space, infrastructure improvements, housing assistance, a community meeting room, etc. The CBA is negotiated by both parties in good faith and may sometimes have a trusted mediator managing the process. The recent merger of SunTrust and BB&T resulted in a CBA that calls for a $60 billion commitment (in the bank’s operating territory) over three years, including:
• $31 billion for home purchase mortgage loans to low/moderate income (LMI) borrowers, LMI geographies, minority borrowers and/or majority-minority geographies
• $7.8 billion for lending to small businesses, to support the growth of businesses with revenues less than $1 million.
• $17.2 billion in Community Development Lending (CDL) supporting affordable housing development, small business growth and lending to nonprofits that support the LMI community.
• $3.6 billion in Community Reinvestment Act (CRA) Qualified Investments and Philanthropy, of which $120 million will be designated for CRA-qualified philanthropic giving.

WHO IS RESPONSIBLE

• Community-based nonprofits and organizations: identify opportunities for CBAs, gather support, outline and advocate for benefits
• Developers, banks, utilities, other institutions: Negotiate with community organizations, offer and deliver specific benefits

HOW IT WILL ACHIEVE GOAL:
CBAs can be powerful tools in mitigating displacement when real estate development or institutional expansion is happening in a transitional neighborhood.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond

KEY CHALLENGES:
• Community groups may not have enough power to bring large scale institutions to the table and may need to recruit partners to increase their influence.
• As of 2019, CBAs remain extremely rare in Virginia.

New or existing? New
Creation or preservation? Preservation
Requires new funding? No
Requires new state enabling legislation? No

WHAT IT DOES

Community land trusts provide financial resources to homeowners in need of home improvements or debt reduction, in exchange for their home to enter the CLTs perpetually affordable portfolio. Other communities have implemented this type of program to be targeted at low-income, senior homeowners who are at risk of losing their homes from a combination of deferred maintenance, accessibility needs, high utilities and rising taxes.

HOW IT WORKS

The CLT purchases the land from the homeowner and the proceeds are used to make improvements to the home that keep the senior resident safe and comfortable. The homeowner agrees to put the property into the CLT when they are no longer able to live there; the homeowner has life rights to live in the home. The homeowner and the CLT agree in advance on a purchase price for the home when the homeowner vacates, usually current appraised value plus an annual percent increase.

WHO IS RESPONSIBLE

• Community land trust: implement and administer program
• Public and private funders: provide upfront capital funding
• Community groups, churches, civic associations: educate seniors on program and refer them to CLT

HOW IT WILL ACHIEVE GOAL:
This program allows seniors to stay in their homes and in their communities--despite rising costs and structural needs.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond

KEY CHALLENGES:
• The program must be well understood and supported by trusted community groups.
• Seniors must receive clear counseling and their family must be supportive.

New or existing? New
Creation or preservation? Preservation
Requires new funding? Yes
Requires new state enabling legislation? No

WHAT IT DOES

The MVA is a tool used to measure neighborhood characteristics and a community’s readiness for revitalization. The initial MVA data collection in the Richmond region was completed in 2017. A key feature of this tool in other communities is the repetition of data collection which allows for an assessment of neighborhood change at a granular level.

HOW IT WORKS

An update of certain MVA data will allow policy makers to better understand which neighborhoods are under market pressures and how rapidly that change is happening. We recommend that MVA be updated after datasets from the 2020 Census are released in early 2021.
This data can begin to create an early warning system for gentrification pressures. It will give time for the implementation of displacement mitigation strategies in neighborhoods, before price increases make these interventions extremely expensive. Until that update occurs, other short-term tools should be employed to better understand the pace of neighborhood change and where pressures are the greatest.

WHO IS RESPONSIBLE

• Local planning and community development staff: provide data and guidance
• Philanthropists: provide grants to cover costs
• PHA: work with Reinvestment Fund to update analysis

HOW IT WILL ACHIEVE GOAL:
Using accurate neighborhood-level data, anti-displacement initiatives can be more accurately timed and implemented.

GEOGRAPHY TAG(S):
Regional collaboration

KEY CHALLENGES:
• Additional cost to update.
• Must define process to prioritize neighborhoods for displacement mitigation initiatives.

New or existing? Existing
Creation or preservation? Preservation
Requires new funding? Yes
Requires new state enabling legislation? No

Solution 1-B: Preserve naturally occurring affordable housing through proactive outreach to owners and incentives to retain affordability.
Solution 1-C: Extend affordability terms for assisted rental developments with expiring use subsidies or use restrictions by incentivizing preservation.
Solution 4-B: Transform Richmond’s aging public housing communities with resident-oriented rehabilitation and replacement.
Solution 3-A: Promote and expand existing senior tax relief programs.
Solution 3-B: Increase housing rehab, home accessibility and critical home repair assistance programs.
Solution 3-E: Coordinate home assessment services with aging in place improvements.
Solution 4-A: Improve the aging housing stock by expanding resources for rehab and increasing access to affordable rehab programs.
Solution 4-C: Revitalize manufactured home communities and replace poor quality homes.
Solution 4-D: Implement holistic code enforcement to preserve and improve existing housing.

Goal 6

Expand Housing Choices for Moderate and Low Income Households.

The region’s housing stock is highly segregated by price and race. Few opportunities exist for lower income families to buy or rent in “communities of opportunity” where there is better access to jobs, transit and schools.

Major Findings:

• Fewer than 1 in 10 of all dedicated affordable apartments are in high-opportunity school zones throughout the region, which prevents children from prospering academically.
• Limited acceptance of housing choice vouchers by rental management companies keeps our region segregated by race and income.

WHAT IT DOES

One of the major constraints to the production of new affordable housing in the region is persistent and widespread community opposition to lower cost homes and apartments. This NIMBY (“Not in My Backyard”) sentiment is strong and frequently plays out in the form of high turnouts of opponents at public meetings. Much research has been done in the past several years about how the public hears and responds to the way advocates have traditionally talked about affordable housing. New strategies for communicating with the public have been developed that can increase acceptance of affordable housing.

HOW IT WORKS

Localities and housing advocates should implement a broad range of communication strategies, from small meetings to social media to community forums. These strategies will use the new language and new approaches identified in recent research from FrameWorks Institute and Enterprise Community Partners. Housing Virginia has “Overcoming NIMBY” resources available to help educate the public and build pro-housing alliances. These campaigns must be informed by the voices of residents whose views are frequently not included in policy development. A strong community engagement effort needs to be a key element of the campaign development.

WHO IS RESPONSIBLE

• PHA: coordinates campaign
• Nonprofit housing providers: partner with PHA and support campaign
• Philanthropy and local government : provide support and funding for campaign

HOW IT WILL ACHIEVE GOAL:
If community opposition is tempered, the development of a wider range of housing choices for low- and moderate-income families and individuals—especially in “communities of opportunity”—becomes more likely.

GEOGRAPHY TAG(S):
Regional collaboration

KEY CHALLENGES:
• An effective campaign will require engagement with many stakeholders, including the recruitment and training of community champions to carry the message and do much of the “retail” work of the campaign.
• Case studies and examples of success stories will need to be developed.

New or existing? New
Creation or preservation? Both
Requires new funding? Yes
Requires new state enabling legislation? No

WHAT IT DOES

The housing choice voucher (HCV) program is one of the largest, federal housing subsidy programs. HCVs are a deep housing subsidy that makes up the difference between the rent of the apartment and 30% of the tenant’s income. HCVs are issued to income-eligible households who use that subsidy in any apartment that falls within HUD’s “fair market rent” (FMR). Typically, an agency that administers HCVs uses the same “fair market rent” for the entire region. Changing to a “Small Area” fair market rent system (SAFMR) uses neighborhood-level rents to calculate HCV subsidies to make higher-cost communities more accessible.

HOW IT WORKS

When the same payment standard is used throughout an entire region, areas with higher rents (“communities of opportunity”) are not available to HCV holders. Instead, they tend to be concentrated in lower-rent neighborhoods. Several years ago, HUD approved the use of SAFMR. This standard creates different rent levels by neighborhood (ZIP code) instead of one payment standard for the entire region. This means that an HCV holder could now rent an apartment in a higher cost neighborhood that was previously off limits due to cost.

WHO IS RESPONSIBLE

• RRHA and other HCV administrators: draft and approve implementation plan
• HUD: approve implementation and monitor progress

HOW IT WILL ACHIEVE GOAL:
SAFMR offers greater choices to voucher holders by enabling utilization of the vouchers in neighborhoods with higher rents.

KEY CHALLENGES:
• A major constraint of the HCV program is that it is voluntary on the part of landlords as to whether they will accept a voucher holder as a tenant. A major education campaign is needed to encourage landlords to accept vouchers. Financial incentives may also be an option, as is adding “source of income” to Virginia’s fair housing law.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond

New or existing? New
Creation or preservation? Preservation
Requires new funding? No
Requires new state enabling legislation? No

WHAT IT DOES

Move to Opportunity (MTO) is a program operated by Housing Opportunities Made Equal that connects HCV holders with counseling and services designed to help them be successful in a move from a high poverty area to a community of opportunity. “Moving to Opportunity” was a 10-year demonstration project by HUD which explored the impact that moving to neighborhoods with better schools, less crime, access to jobs and services would have on families and children. The positive results of the study were eventually confirmed by Raj Chetty and his Harvard colleagues in a series of studies beginning in 2016. Those studies demonstrated the positive impact that neighborhoods of opportunity can have on childhood development.

HOW IT WORKS

Under MTO, families living in high poverty communities (including Richmond’s public housing communities) receive a HCV and the assistance of a HOME counselor for a year after the move. The counselor provides support to the family, address challenges that they face after the move, and improves the chances for a successful transition.

WHO IS RESPONSIBLE

• HOME of Virginia: implement, expand, and monitor program
• RRHA: connect HCV recipients to program
• Private landlords: increase acceptance of HCV holders

HOW IT WILL ACHIEVE GOAL:
MTO provides low-income families with an opportunity to move to a higher opportunity neighborhood and provides the support services that will contribute to success.

KEY CHALLENGES:
• MTO is an expensive program that works family by family.
• Scaling up the program will require significant resources.
• Additional landlords will need to be recruited in communities of opportunity.

GEOGRAPHY TAG(S):
Regional collaboration

New or existing? Existing
Creation or preservation? Preservation
Requires new funding? Yes
Requires new state enabling legislation? No

WHAT IT DOES

All private landlords and management companies have screening standards that are used in determining whether an applicant is qualified to rent an apartment. Some of these are simple standards around income qualification, but others can include a range of disqualifying factors including criminal history (both misdemeanors and felonies), bankruptcy, evictions, credit score and others. Strict standards often rule out quality prospective tenants, because of a single misdemeanor that occurred years in the past. This eliminates housing choices for many families.

HOW IT WORKS

Landlords should be engaged in a dialogue about their screening standards in order to secure changes that will increase rental choices. Localities and/or nonprofit housing organizations could conduct a survey of screening standards to understand the landscape faced by renters, including in LIHTC developments.

WHO IS RESPONSIBLE

• PHA: broker conversations and meetings
• HOME of Virginia: conduct surveys and provide research assistance
• Nonprofit housing providers: evaluate and change screening standards
• Landlords and management companies: evaluate and change screening standards
• RRHA: identify tenants with minimal barriers to enter private rental market

HOW IT WILL ACHIEVE GOAL:
Flexible screening requirements will create more choices for lower income apartment seekers.

KEY CHALLENGES:
• Private owners will be risk averse, especially in a strong rental market where occupancy is high and they have adequate demand.
• There is some evidence that managers of LIHTC projects may be imposing an income limit, even for prospective tenants with housing vouchers. If true, this may be contrary to program requirements and should be addressed with the managers and with VHDA.
• Additional studies and other evidence may be needed to present to landlords regarding the positive effects of revising standards.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond

New or existing? New
Creation or preservation? Preservation
Requires new funding? No
Requires new state enabling legislation? No

WHAT IT DOES

Through targeted funding, land use changes, and incentives, localities may: provide access to sites in high opportunity areas where jobs and educational opportunity are stronger; encourage greater density for mixed-income housing; and require mixed income housing in transit hubs.

HOW IT WORKS

Localities should proactively establish districts and production targets over the next five years, and encourage production through site identification, expedited land use approvals, and financial incentives. To help developers achieve these goals, localities may consider incentives such as reduced parking and higher density. In many places around the region, height and other zoning restrictions could be relaxed to expand housing supply. These development incentives should be linked to the provision of affordable housing.
Additionally, or as an alternative, localities may consider a commercial linkage fee in developing areas that could support affordable units in market rate developments. Linkage fees are charged to developers and collected by localities to help fund affordable housing initiatives. These districts may also be strong candidates for “experimental” new housing types that can reduce housing costs, including accessory dwelling units as well as a wide range of manufactured, modular and panelized construction.

WHO IS RESPONSIBLE

• Local governments: undertake planning and site prioritization, regulatory reform, create incentives
• Nonprofit and private housing developers: construct and provide affordable homes
• PHA: provide knowledge and technical assistance to local governments
• VHDA: offer favorable, flexible financing to developers of affordable and mixed-income housing

HOW IT WILL ACHIEVE GOAL:
Developing new affordable housing in high opportunity areas is urgently needed, especially where LIHTC and other low- and moderate-income housing has not been widely developed.

KEY CHALLENGES:
• Community opposition may need to be addressed through education and messaging.

GEOGRAPHY TAG(S):
Ashland, Chesterfield, Hanover, Henrico, Richmond
Regional collaboration

New or existing? New
Creation or preservation? New
Requires new funding? Yes
Requires new state enabling legislation? No

WHAT IT DOES

Anchor institutions have a broad impact on social and economic trends in the region. Anchor institutions include universities, healthcare systems, major employers, faith communities and other organizations whose investments and spending significantly impact local economies such as corporations, governments, arts and cultural institutions, sports facilities, etc. Anchor institutions are major drivers of the direction and future status of communities.
In recent years, anchor institutions have begun to look beyond the bounds of their core activity and to explore how they can address other issues affecting the vitality of the community, as well as the welfare of their employees and customers. Partnerships can take myriad forms and can include financial and intellectual capital, services, targeted programming and many other activities.

HOW IT WORKS

Previous solutions have pointed to the engagement of healthcare institutions in creating homeownership opportunities in low-income communities as well as targeted improvement programs to address housing conditions that directly affect the health of residents. Housing communities can also be convenient sites for the delivery of healthcare services, reaching residents who might not otherwise be able to access healthcare. Another common solution provided by anchor institutions is financial assistance that enables their employees to secure affordable housing, often homeownership.
Housing advocates and anchor institutions must work together to identify areas of mutual concern and then work through a range of issues around community engagement, program design, funding and implementation.

WHO IS RESPONSIBLE

• Anchor institutions
• Housing providers
• Local government
• CDFIs
• VHDA and other housing lenders

HOW IT WILL ACHIEVE GOAL:
Anchor institutions can improve housing choices in numerous ways. They can mobilize financial and human capital at scale in order to address the full range of housing challenges identified in this Framework.

KEY CHALLENGES:
• Finding the nexus where the specific interests of an anchor institution and the housing community intersect.
• Understanding how to scale initiatives so that their impact is commensurate with the anchor institution’s other activities and influences in the region
• Engaging early since the planning windows of these institutions is typically very long range.

GEOGRAPHY TAG(S):
Regional collaboration

New or existing? Some activities are currently underway, primarily in the health sector.
Creation or preservation? Both
Requires new funding? Yes
Requires new state enabling legislation? No

WHAT IT DOES

Jurisdictions that receive entitlement funding from HUD are required to produce an Analysis of Impediments to Fair Housing. In this region, Richmond, Henrico and Chesterfield must produce this report and submit it to HUD. In the past, each jurisdiction has independently produced its own report. In 2020, it is the intent of the three jurisdictions to produce a joint report (along with Colonial Heights, Hopewell, and Petersburg).

HOW IT WORKS

This analysis identifies challenges and barriers that exist for minority households that may prevent them from having a range of choices for housing by type, location and price. Since our housing market is regional in nature, it stands to reason that a regional plan will be more accurate in its assessment of barriers and description of strategies that can be implemented collaboratively.

WHO IS RESPONSIBLE

• PlanRVA: hire a consultant to complete the analysis and recommendations
• Local governments: provide data, review and adopt recommendations

HOW IT WILL ACHIEVE GOAL:
The report will identify specific strategies designed to overcome barriers and improve housing choice for minority households. These recommendations will minimize duplicative efforts and maximize efficiency.

KEY CHALLENGES:
• Agreement on new strategies across jurisdictional lines may require adjustments to local programs and practices.

GEOGRAPHY TAG(S):
Richmond, Henrico and Chesterfield

New or existing? Existing, but new as a regional effort
Creation or preservation? Both
Requires new funding? Yes, but funding already allocated
Requires new state enabling legislation? No

Solution 1-A: Increase the amount of land available for multifamily housing development in residential zones (and commercial zones where appropriate), especially in “communities of opportunity.”
Solution 1-E: Establish inclusionary zoning programs that incentivize affordable dwelling units.
Solution 1-F: Increase housing choice voucher holders’ success rate in finding high-quality housing.
Solution 1-G: Integrate affordable housing into transportation-rich corridors and neighborhoods.
Solution 2-B: Create a regional center for homeownership that is a one-stop resource hub.
Solution 2-C: Build a region-wide racially equitable homeownership program.

Selection of Priority Solutions*

For each goal, several solutions are identified as “priority.” These are the solutions that the region should pursue with vigor. Criteria used for elevating certain solutions to priority status included:

Community input: How frequently did this strategy come up during the community engagement component of this project? Was it one voice or was there consensus?
Scope of need: To what extent will a strategy address a serious need (e.g., health or safety) with significant scale and reach?
Critical time frame: Does this strategy address a need where action is needed quickly, or the window for action will close (e.g., displacement pressure in rapidly changing neighborhoods)?
Regional applicability: Would the strategy have multi-jurisdictional or even regional potential, as opposed to a strategy that is only be applicable in one locality?
Lower income impact: What is the impact this strategy will have on the lowest income households in the region? Often these individuals and families face the most serious and immediate challenges.
Racial equity: Will the effort significantly address racial disparity in housing opportunities? For example, to what extent might a strategy close the widening homeownership gap between white and black households?
Level of effort / Cost: Will the strategy be very difficult to accomplish or is it “lower hanging fruit”? Will the strategy require significant new funds or little to no new resources?
Legislative or regulatory change: Does the solution require a legislative or regulatory change?

Resources for Solutions

The region will need to develop additional capital resources, in a variety of forms, in order to implement solutions at the scale necessary to create an impact on housing needs. The approaches contained in this section are proven strategies that have been implemented in Virginia and around the nation. Some have already been put in place in parts of the region.

WHAT IT DOES

A regional (or local) housing fund is a flexible pool of capital that can be deployed to increase the affordability of housing and to fill “gaps” in financing, thereby making the development more feasible. Usually, housing trust funds are capitalized with public funds, but they can also receive funding from private sources, including corporate, philanthropic and individual. The City of Richmond operates a housing trust fund that is currently capitalized at $3 million per year—a significant increase above its historical level of under $1 million.

HOW IT WORKS

A housing fund is usually administered by the staff of the jurisdiction, although it can also be contracted out to another entity. Local housing trust funds are frequently funded by direct appropriations from a locality’s budget; however, in some cases, these funds may be supported by a direct, recurring revenue stream from a tax, fee, or special assessment. These automatically replenishing funds are usually preferred as they provide a more consistent, reliable source of support. Funds that are supported with annual appropriations often require regular “campaigns” by advocates to sustain funding levels.

The Richmond region would benefit from a large scale, “cross-sector” fund of the type that was implemented in Charlotte, North Carolina last year. In the case of Charlotte, $100 million was raised from public, private, and philanthropic sources. A cross-sector funding strategy has the advantage of a collaborative, uniform message to a broad range of funders who may otherwise need to respond to numerous, individual requests.

Housing trust funds provide grants and loans with deeply concessionary terms. Other capital funds described in these solutions, on the other hand, more often consist of investments that accept rates of return that are somewhat below market and/or for investment periods that are more patient.

KEY CHALLENGES:
• Regional funds are less common than funds for single jurisdictions. Regional funds offer significant advantages, however, including uniform and consistent policies, application procedures, timing and greater administrative efficiency. The challenge is to ensure that localities feel that they are all being treated equitably by the fund, and that they retain input into policies and priorities.
• Another major challenge with housing funds generally is sustaining or growing the annual contribution. Hence a dedicated source of revenue is a preferable method for ensuring consistent contributions.

New or existing? Primarily new. The City of Richmond administers the only local housing trust fund in the region. No regional trust fund exists.
Creation or preservation? Creation and preservation
Requires new funding? Yes
Requires new state enabling legislation? No

WHAT IT DOES

A locality enters into an agreement with a market rate property owner to provide some apartments at reduced rent levels and to serve households at a designated income level. For example, a property might make 10% of its apartments affordable to households at 80% AMI or below. Rent levels and occupancy must be certified to the locality. The property owner makes their full tax payment but receives a payment at year-end to offset the cost of the rent reduction.

HOW IT WORKS

These programs are sometimes referred to as “tax rebates” in order to create a nexus between the payment and the affordability requirement. These are grant programs where the locality uses its general funds to “rebate” an agreed upon amount depending on the number of affordable units and the level of rent reduction. It is important for the locality to achieve a formula that provides an incentive that is sufficient for the developer but not excessive.

WHO IS RESPONSIBLE:
• Local government housing and finance department staff: design and draft the program
• Board of supervisors or city council: approves any ordinances necessary to the program

KEY CHALLENGES:
• This requires an ongoing budget expenditure by the jurisdiction. If the expenditure is discontinued, it could result in the displacement of the lower income households.
• While basic program design parameters need to be developed, ideally, each project should be underwritten to set the subsidy at the correct level. This requires experienced staff support or out-sourcing of this aspect of the program.
• The program requires staff to monitor compliance annually.

GEOGRAPHY TAG(S):
All

New or existing? Has been used in Richmond on a limited basis.
Creation or preservation? Both
Requires new funding? Yes
Requires new state enabling legislation? No

WHAT IT DOES

Under Virginia code (Section §58.1-3219.4) localities may grant partial tax exemption to new or rehabilitated properties located in designated redevelopment or conservation areas or in rehabilitation districts. The locality can establish the terms of such exemption—including the requirement to meet defined affordability terms.
Property taxes are a significant element of a rental property’s operating expenses. A reduction in taxes can translate directly to a reduction in rents. Units with lower rents can be designated to serve lower-income tenants.

HOW IT WORKS

Local government would establish such areas or districts in accordance with state law. They would also set the terms for affordability that would qualify the property for the abatement. The level of abatement and the term of abatement are also set by the locality within the statutory limits.

WHO IS RESPONSIBLE:
• Local planning staff: determine area designation(s)
• Local government housing staff: establish program design
• Board of supervisors or city council: approves ordinances necessary to program

KEY CHALLENGES:
• Requires some level of staff knowledge and experience to set abatement levels to certain levels of rent reduction. Requires annual reporting and monitoring. While abatement for rehabilitation has been commonplace in Virginia, abatement for affordability is not widely in practice.
• Programs would need to be tightly drawn to avoid abuses. This is not recommended for homeownership programs except where long term affordability requirements (i.e., community land trust) are in place.

GEOGRAPHY TAG(S):
All

New or existing? Existing, may be expanded
Creation or preservation? Both
Requires new funding? No
Requires new state enabling legislation? No

WHAT IT DOES

The federal Low-Income Housing Tax Credit program is the primary vehicle for the production of new affordable rental housing. This is achieved through an annual competitive program administered by the Virginia Housing Development Authority as well as by credits that accompany tax exempt bond issues for housing. Fifteen states also offer state credits that are a companion to the Federal program. Virginia is in the early stages of considering such a program.

HOW IT WORKS

Tax credits are converted to “equity” that is invested in affordable housing and make it possible to have lower rents. The tax credit program currently serves households that are primarily at the 50-60% AMI level. A state companion credit could be structured to allow some apartments to serve families with incomes below this level.

WHO IS RESPONSIBLE:
• Local governments: add program to their legislative agendas for the 2020 and 2021 General Assembly sessions

KEY CHALLENGES:
• Competition for state financial support is significant.
• Local elected bodies may not consider this a priority for their legislative agenda.

GEOGRAPHY TAG(S):
All

New or existing? New program
Creation or preservation? Both
Requires new funding? State funding (“tax expenditure”)
Requires new state enabling legislation? Yes

WHAT IT DOES

A local government may issue general obligation bonds to support affordable housing. The bond issue is supported and repaid from future revenues. The proceeds of the bonds may be used for a variety of purposes as determined by the locality. Typically, these proceeds are used as “gap financing” for affordable housing development. This tool is commonly used in other states but rarely in Virginia. In the past year, Charlotte and Durham, North Carolina have both issued housing bonds ($50 million and $95 million respectively). Alexandria has issued such bonds here in Virginia.

HOW IT WORKS

The proceeds from the bonds may be used for everything from down payment assistance to rental housing development assistance. Proceeds may be deposited into a local “housing trust fund” or distributed according to a specific set of criteria. General obligation housing bonds are different from the “revenue” bonds that are issued by housing authorities. These revenue bonds are not obligations of the locality or the authority. The bond investors rely solely on the property owners for repayment of these bonds—which are used exclusively for affordable rental housing and carry the “4% tax credit” with them. General Obligation housing bonds are much more flexible in their use. Flexible grant financing is the key to achieving affordability in housing development. The locality can establish the targeting for the program and set the assistance to achieve that goal.

WHO IS RESPONSIBLE:
• Local finance departments: determine bonding levels, identify bond underwriting firms to structure the sale and place the bonds
• Local housing staff: design and administer program
• Board of supervisors or city council: approve the bond issuance
• Local voters: vote on proposed bond issuance

KEY CHALLENGES:
• Housing bonds are new to most of Virginia. Voter education would be required.

GEOGRAPHY TAG(S):
All

New or existing? This is an existing program, though rarely used in Virginia.
Creation or preservation? Both
Requires new funding? Yes
Requires new state enabling legislation? No

WHAT IT DOES

For new affordable housing production or adaptive re-use, a locality may waive or reduce the one-time fee for connecting to water and sewer systems. These fees range from $10,000 to $16,000 per unit in the region. These fees can constitute 10% or more of the cost of the home or apartment, so that elimination might result in improved affordability—including the ability of the developer to add other cost reducing features such as enhanced energy efficiency, low-maintenance materials, and other features.

HOW IT WORKS

Local governments may offer fee reductions for homes and apartments that meet specific affordability requirements as defined by the locality. These local fee waivers not only reduce the purchase price for homes and the rental rate for apartments, they may also assist a developer in meeting the matching fund requirements of other affordable housing funders. For example, tap fee waivers will result in a higher score for an applicant seeking an LIHTC award from VHDA for workforce rental housing.

WHO IS RESPONSIBLE:
• Local utilities staff: provide cost estimates and waive fees
• Board of supervisors or city council: approval of any necessary ordinance(s)

KEY CHALLENGES:
• Localities use these fees to offset the cost of capacity increases to water and sewer systems.

GEOGRAPHY TAG(S):
All

New or existing? Primarily new; it has not been common practice for these fees to be waived or reduced for affordable housing in the region.
Creation or preservation? New construction or adaptive re-use
Requires new funding? No
Requires new state enabling legislation? No

WHAT IT DOES

TIFs are local districts where incremental growth in tax revenues are dedicated to a use within the TIF. Typically, these revenues support infrastructure development or upgrades; however, affordable housing can also be designated as a beneficiary of TIF revenues. TIFs can reduce the cost of housing by providing gap financing or other types of subsidies.

Richmond currently contemplates that some future revenues from its proposed Navy Hill TIF would be allocated to affordable housing development (as well as funding for schools). TIFs are established by local government.

HOW IT WORKS

The base level of tax collections in a district is determined. The TIF then relies on increases in tax revenues in future years to support the repayment of bonds that are used to fund infrastructure or other improvements in the district. TIFs are much more commonly used to support commercial development.

WHO IS RESPONSIBLE:
• Local finance departments and financial advisors: project revenue increases and borrowing costs
• Local housing staff: design and administer program
• Board of supervisors or city council: approve the TIF

KEY CHALLENGES:
• TIFs are not primarily used for affordable housing but such housing can be an ancillary beneficiary from a well-designed TIF.

GEOGRAPHY TAG(S):
All

New or existing? New
Creation or preservation? Both; more frequently used for new construction.
Requires new funding? No
Requires new state enabling legislation? No

WHAT IT DOES

These are payments made by developers of residential and commercial properties to support community improvements (including affordable housing) as part of a rezoning to increase the density of the site. These are more commonly used in Northern Virginia. Arlington has a long-standing commercial linkage fee as part of its affordable dwelling unit ordinance that supports its affordable housing program. The Tyson’s Corner redevelopment in Fairfax includes a commercial linkage fee of $3 per square-foot of non-residential space that will be dedicated to support workforce housing within the Tyson’s footprint.

HOW IT WORKS

Legislation passed the General Assembly in 2016 that severely restricted voluntary proffers—primarily to site related improvements. This caused most off-site housing related proffers to be discontinued and, in fact, led to a significant breakdown in communications between localities and developers. Legislation passed in 2019 to “fix” this problem and the door was opened again to proffer conversations. Proffers for affordable housing and commercial linkage fees can be used flexibly by the locality to support affordable housing development.

WHO IS RESPONSIBLE:
• Local planning staff: negotiates proffers and design program uses
•Board of supervisors or city council: establishes the program via ordinance or resolution

KEY CHALLENGES:
•Proffers for housing may still be difficult to negotiate except in areas such as Northern Virginia where affordable housing has reached crisis status and is therefore recognized as a community need on a par with schools, roads and other public necessities.

GEOGRAPHY TAG(S):
All

New or existing?: Existing program
Creation or preservation?: Both
Requires new funding?: No
Requires new state enabling legislation?: No, but updates may be helpful

WHAT IT DOES

A pool of capital that typically is provided by private sources, including philanthropy. These funds are used as “equity” investments in affordable housing. The investors are willing to receive a below market rate of return and are more “patient” than market rate investors. They are willing to leave their funds in for longer periods and are patient in waiting for returns. These funds are sometimes referred to as social investment funds.

HOW IT WORKS

Usually, nonprofit housing developers are the users of these types of funds. A typical use would be to support the acquisition of “market rate affordable” housing—also called NOAH (naturally occurring affordable housing). The nonprofit would be able to hold the property for a period while seeking other long-term subsidies (e.g., applying for LIHTC or other programs). The equity investor accepts a lower rate of return and waits until the refinancing is complete. This may take three to five years. Such social equity can also be helpful during the early stages of developing new housing by helping the developer to avoid the carrying costs of high interest debt.

WHO IS RESPONSIBLE:
• Corporate and philanthropic leaders: establish and seed fund
• Financial institutions: provide capital and shape the design and implementation

KEY CHALLENGES:
• Social equity is not a long-term project subsidy, so it is only useful in certain applications.
• Rising acquisition costs will require this fund be substantial enough to make a difference.

GEOGRAPHY TAG(S):
All

New or existing? New
Creation or preservation? Both
Requires new funding? Privately funded in most cases
Requires new state enabling legislation? No

WHAT IT DOES

A loan fund is similar to a social equity fund, except that the capital is in the form of debt—not equity. Lenders come together and provide debt at concessionary rates and terms that can be used for short to mid-term uses. Such a fund could be used for the acquisition of at-risk housing or the development of new housing. It could be primary or mezzanine debt. In either case, there is a reduction in the interest cost associated with affordable housing development.

HOW IT WORKS

Nonprofit and for-profit developers access these funds to facilitate the development of a variety of affordable housing types. This is typically not long-term financing but more often has a term of two-to-five years. Interest rates and fees are below market, but loans are typically secured as they would be in a traditional commercial transaction.

WHO IS RESPONSIBLE:
• Lending institutions: collaborate to create single fund or multiple funds
• Nonprofit and for-profit developers: demonstrate need for financing, access funds for development

KEY CHALLENGES:
• Lenders may have difficulty is reaching a commonly accepted set of loan terms.

GEOGRAPHY TAG(S):
All

New or existing? New
Creation or preservation? Both
Requires new funding? Private funding
Requires new state enabling legislation? No

WHAT IT DOES

There are several federal funding sources that may be used for affordable housing but may be underutilized. The most common of these is the Community Development Block Grant program (CDBG). CDBG funds can be used for rehabilitation and for certain costs related to new residential construction. Often CDBG is used for other types of community improvements that benefit low-income communities.
The New Market Tax Credit program (NMTC) is another tool primarily focused on commercial development, but affordable housing can be a significant component of an eligible project. The Opportunity Zone program is also targeted to commercial development, but housing may be able to benefit. This program is in its early stages and strategies are currently under development.

HOW IT WORKS

The use of CDBG is solely at the discretion of the local government. The others are driven by private developers (both nonprofit and for profit). The New Market Tax Credit provides equity investment into a project (similar to LIHTC)—some of this equity is converted to a grant after seven years. Opportunity Zones provide seven-to-ten year equity investments at lower rates, but the investor expects a return of all capital.

WHO IS RESPONSIBLE:
• Local housing staff: determine priorities via Consolidated Plans, review and make annual allocations; help connect developers with other available federal tax credits
• Nonprofit and for-profit developers: receive allocations and put into affordable housing projects

KEY CHALLENGES:
• Programs are complex and require expertise in finance and development.
• Federal CDBG funds are also used for other non-housing community improvements that are local priorities.

GEOGRAPHY TAG(S):
All

New or existing? Existing programs
Creation or preservation? Both
Requires new funding? No
Requires new state enabling legislation? No

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