How millions in federal funding will help create affordable housing in Richmond

Posted at 6:08 PM, Mar 27, 2023
and last updated 2023-03-27 18:08:31-04

RICHMOND, Va. -- On Monday, U.S. Senator Mark Warner presented Richmond's Redevelopment and Housing Authority (RRHA) with $14 million to address a lack of affordable housing options in the city.

The funding is from the U.S. Department of Housing and Urban Developments Capital Fund.

The funding is a much-needed boost as the city struggles with what Mayor Levar Stoney called an "affordable housing crisis" at the check presentation, sharing startling statistics about rent prices and evictions at Monday's check presentation.

"In the Richmond metro region, residents are paying more than 30% of their income on housing costs, and there is a 23,320-unit shortage in the metro Richmond region, " Stoney shared. "One in five homes in the city of Richmond are sold to out-of-state corporate investors who are renting at higher rates than traditional landlords or flipping homes that expeditiously exceed the original sales prices."

RRHA CEO Steven Nesmith said the money will be used to nail down investments from the private sector to fix existing infrastructure, noting Richmond's public housing units are some of the oldest in the country.

Nesmith said he would work to create a Housing Revenue Bond to attract investment.

"We're going to sell those bonds to Wall Street to tackle public housing infrastructure that we have, the dilapidated infrastructure," Nesmith said. "Because we can no longer do 150 units here, 200 units there."

"Sometimes the federal dollars may be the first dollar lost so that you make it a much safer investment for the private sector," Warner said. "So if you can get the tax credit and you get first-dollar loss protection coming from federal dollars, that's a pretty darn good deal."

However, Warner said the funding is a start.

"Help is on the way, but this $14 million, we could use three or four times that much to deal with the backlog of affordable housing," Warner said. "So I think we need to couple that with existing federal tax incentive programs, the new market tax credit, the neighborhood tax credit, that might take a home that was in disrepair. We do a lot to build new stock, but how do you repair existing stock?"

Mayor Stoney does have a proposed $50 million dollar investment to address critical affordable housing needs in the 2024 budget, with $10 million dollars given to affordable housing needs each year for the next five years. The proposed budget also includes what could be considered a "revolving door" loan program worth $800,000.

Some Richmond residents who own trailers on Richmond's Southside told CBS6 they worry they will be unable to tap into any additional funding.

In the city's FY23 budget, $300,000 was meant to be allocated for a mobile home repair and replacement program for mobile home park residents. Those funds have not been used yet.

The mayor's loan program would include that $300,000 and help residents set up mortgage payments.

"If a person has any issues, if a resident has any issues with paying the loans back, that's a discussion we can have on a case-by-case basis," Stoney said. "But at the end of the day, if you're living in RRHA or if you're living in housing on the Southside, we don't want our residents to live in substandard conditions."

When asked how he could instill trust in residents who worry about being able to tap into the loan program, Stoney replied: "If you are involved in government today, no matter what level, local level state level, federal level, there's always going to be an issue of trust. But I always say, watch our actions. And watch where we end up at the end of the day. This is still very early in the process. Once the process is complete, then I ask whether or not they will trust the process."

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