by Jon Baliles
There has been a lot of talk about the affordable housing crisis in the region in recent years, but it has been constant in 2023. The entire region needs 39,000 units as fast as it can get them; but interest rates are high, the market is stalling — every week there is a new twist or turn in the drama. And this week is no exception.
Em Holter at the Richmond Times-Dispatch has a disturbing story about the meeting this week of the city’s Affordable Housing Trust Fund (AHTF) Board that drew an overflow crowd reacting to the reckless idea by Mayor Levar Stoney and his administration for dissolving the Board and creating a commission instead, that allegedly would allow for raising more money from other sources and involve other partners. The mayor’s and the administration’s argument is that because there is more money to be allocated, there should be more oversight. But what they are proposing is not more sunlight, but less.
The AHTF Board is tasked with oversight of the money in the fund to help support and spur more affordable housing projects. Just last year, the Mayor and Council finally approved a commitment of putting $10 million per year in the fund for five years. Who doesn’t need more money and more partners to help tackle an issue as large and complex affordable housing? Sounds sensible, right? Except…
As the Times-Dispatch article points out, what this is really about is who controls the money and who gets to pick the “partners”:
But with more funding comes more oversight, which city administrators are hoping to achieve. To do so, City Hall wants to eliminate the board and establish a commission that would allow for more money and more partners.
Those in opposition argue that administrators are overstepping their bounds, which could lead to an imbalance of power, loss of control of funds and elimination of public input.
The group Richmonders Involved to Strengthen Communities (RISC) attended the meeting in force and is vehemently against the dissolution of the board as well as the trust fund. RISC board member Ralph Hodge spoke during public comment, which the Times-Dispatch has online here (best part starts at 1:51 of the video). Hodge said supervision of the funding was vital and then put it straight on the line and said “If you are not careful, a fund like this can become a slush fund if you don’t have the kind of oversight that this board has.”
The article points out that the AHTF Board is only chartered to oversee the allocation of local dollars and the city administration says it wants to utilize more partners and non-profits using private, state, and federal funding. For Councilwoman Ellen Robertson (6th District), “who has sat on the board since its creation, the decision to dissolve it is a slippery slope that boils down to the delegations of power between the city council and City Hall.” She is an advocate for more dollars to tackle the problem but cognizant of giving that power away along with removing oversight.
According to the Times-Dispatch:
‘If the administration is moving forward with their plan and who they have partnered with, and what they’re priorities are and so forth, they are ignoring the fact that those funds are in this trust fund and they do not have the authority to make those kinds of decisions,’ Robertson said.
The funds are provided by the city via the budget, but the Board makes decisions on how to allocate them. And now City Hall wants that money and power and to make decisions about the money without oversight. Sweet home, Chicago.
Don’t forget this attempt to remove oversight over a large pot of money comes just months after VPM reported that the promises made by the mayor were hollow:
Mayor Levar Stoney pledged $20 million in COVID-19 related aid from the federal American Rescue Plan (ARPA) for affordable housing — $10 million for fiscal 2022 and $10 million for fiscal 2023. However, those funds were never distributed to the AHTF.
But what followed was that the mayor and administration said they were not allowed to distribute APRA money to the AHTF itself, so they pledged they would put it toward housing needs and find the funds for the AHTF, which they said they did. The next plan they came up with was to issue $10 million in bonds annually for five years for the trust fund itself. To do this, they pulled back from the original idea and city ordinance that would direct the annual $2.4 million (and growing) from expiring tax abatement monies into the AHTF for the foreseeable future.
Chief Administrative Officer Lincoln Saunders tried to spin that borrowing $10 million in each of the next five years would be more beneficial and allow the city to provide more affordable housing.
Using abatement funds would only generate $23.8 million over that time span, he claimed, but borrowing the money would provide an additional $26.2 million (but seemingly forgot that borrowing has interest costs).
The Richmond Free Press pointed out that Saunders’ approach to borrow $50 million means “the city will spend $17.6 million over 20 years to repay each $10 million borrowed. In other words, the city will pay $88 million over 20 years to repay the $50 million it collectively plans to borrow.” (Or, the city could use the $23.8 million of abatement money and then borrow $26 million instead of $50 million and pay half the interest, but that might make too much sense.)
If this was truly about maximizing our dollars for housing, we would not see such political and bureaucratic gymnastics (or such debt payments). But this is not about housing, this is about the control and allocation of the money. When the light bulb clicked and the mayor and administration discovered that they could allocate $10 million in ARPA money for housing projects without having to put it in the AHTF and be subject to its oversight and requirements, they discovered a pot of gold and political largesse. The new “housing commission” would not have the oversight or transparency of the AHTF and thus would block out all sunlight — by design. Just as Hodge warned, it would create a slush fund without oversight.
City Director of Housing and Community Development Sherrill Hampton said the goal would be to sunset the board and the trust and fold it into the proposed housing commission. As a result, the current board would serve on the commission and would help oversee policy.
City Hall and the administration have not released any official written proposal for the new “housing commission,” i.e. who would appoint members, how many members would serve, any member requirements or qualifications, or other procedures. But I am told that the allocation of funding would be recommendations made by the mayor to City Council; so 10 politicians would be in charge of deciding and allocating millions of dollars every year for affordable housing instead of those on the ground and in the trenches like the AHTF. It’s not a coincidence that Robertson expressed concerns in the article that this proposal could lead to political favoritism.
The AHTF Board voted on Wednesday to consider potential options and present recommendations to City Council probably later this fall. The best thing that can be said of this mess is that people who are passionate about affordable housing and transparency both on the Board and in the general public are wise to this Tammany Hall-style tactic. Let’s be thankful they will continue to monitor it and make it known that this is an issue of vital importance and we should not sacrifice more affordable housing in favor of creating a political slush fund.
Jon Baliles is a former Richmond City Councilman. This is an excerpt from the original article posted on his blog, RVA 5×5. It is posted here with permission.
