RVA Politics is a blog about politics in the state of Virginia And the capital city of Richmond.

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NOB/Navy Hill: How affordable is the affordable housing?

NOB/Navy Hill: How affordable is the affordable housing?

BCJordan, https://www.flickr.com/photos/28568408@N03/2892001743

BCJordan, https://www.flickr.com/photos/28568408@N03/2892001743

This post is part of a series on the NOB/Navy Hill downtown development plan.

The Mayor and the Navy Hill developers claim their downtown development plan will provide a lot of benefits for the city. In my last post, I suggested that the big promises of jobs and minority contracts may not be as simple as they appear. We can say the same about another major benefit: affordable housing.

According to the developers’ website, the plan for affordable housing units contained in the proposal is “the largest public-private commitment to affordable housing in the city’s history.” It’s ironic that the developers are touting this feature of their development when, by all accounts, they had to be forced into adding this commitment. According to RTD reporter Mark Robinson, the Mayor pushed back on the developers’ original proposal, requesting more affordable units as part of negotiations. The mayor deserves some credit for setting expectations here; by demanding that affordable housing (and minority contracting) be included in this development proposal, he will hopefully set a trend for the city going forward.

Still, as with all other aspects of this plan, the big announcements hide a more complicated picture.

First, the numbers: the Navy Hill site says that their proposal includes 680 affordable housing units. That sounds like a lot! Hold on, though: it turns out that only 280 of that total will actually be included as part of the proposed residential development in the area immediately near the Coliseum. This is less than 10% of the total of over 2,900 residential units planned (according to the Hunden consultant report commissioned by the Mayor).

So where does this 680 number come from?

While the developers apparently were unwilling to include any more affordable units, someone was able to recruit the Better Housing Coalition (BHC), a local community development organization, to build an additional 200 homes, and the Community Foundation, a local grant-giving organization, to pledge $5 million to help pay for it. (Union Bank may be contributing an additional $1M, but it’s not clear if that goes directly to these units or is just supporting the BHC more generally.)

This sounds great, and the BHC and Community Foundation have done a lot of good for the city. But what exactly does this have to do with the rest of the downtown development? Couldn’t these be built anywhere? And where will these units be built – on what land, by whom, and when? According to the city’s cover letter that accompanied the Hunden consultant report, these units would be built “within the Increment Financing district via developer’s commitment to raise $10 Million in charitable donation and partner with BHC.” So these will actually cost twice as much as the Community Foundation grant, and be built... somewhere within the larger TIF district downtown? At some point?

And then the developers’ website finally adds that “an additional 200 affordable homes within the city will be constructed with revenue generated from the special tax district that will help finance the arena construction.” Wait, what? Isn’t the money from the tax district supposed to go back to paying off the bond/loan that the city used to build the arena, renovate the Armory, etc.? So ONLY if there are “surplus” funds after paying back the loan will these 200 “additional” units be built. When? Where? By whom?

So this big 680 number really means 280 as part of the development, PLUS 200 currently only half-funded by private donations that will be built somewhere outside of the arena/development area, PLUS 200 funded by “surplus” money that may not exist to be built in a mystery place at some point in the distant future. Sounds solid to me!

And all of this before we even get to what “affordable” means here. One-third of the 280 actually-committed units will be rented at a rate deemed affordable to someone making 60% of “AMI,” or Affordable Median Income. For Richmond, that amounts to around $35,000 a year for a single person and $50,000 for a family of four. The other two-thirds will be priced at 80% AMI ($47k and $66k, respectively). So while these restrictions will make the resulting apartments more accessible than they would be otherwise, it is hard to see how this helps the almost 25% of Richmonders who live below the poverty level, which is much lower at $25k for a family of four.

So far the developers have claimed they will accept federal housing vouchers, which could help; but the voucher program brings many challenges that don’t necessarily make it easier for the poor to find housing. And call me jaded, but I’m a little skeptical that subsidized residents actually would be welcomed in a fancy new downtown apartment building; there are ways that landlords can formally accept housing subsidies while obstructing them in practice.

And so, as with the minority contracting part of the proposal, there are significant questions of enforcement here too. How do we know developers will keep their promises? What happens if they fail to build the affordable units, or claim they can’t find renters, or place barriers in the way of subsidy vouchers? What happens if the funding for the “additional” units doesn’t materialize? How much do we trust the city government to keep track and enforce this? For example, the government of Portland, OR – which may be considered weird, but not incompetent – simply stopped counting when they failed to meet lofty affordable housing goals.

Some affordable housing is better than none, of course. But the whole deal is not as great as it might appear at first glance. The numbers are shaky, and even if the developers come through on all their promises, the resulting units may do little to help the city’s poorest residents. Keep that in mind the next time the Mayor or a developer talk about the “commitment” to affordable housing: it’s just a commitment. Nothing has been built yet, and it may never be.

Next week: a look at the private investment plans like hotels and office space. And then later in the week, the big kahuna: the new arena. (I have thoughts.)

NOB/Navy Hill: Are these “Private Investment” projects what we need?

NOB/Navy Hill: Are these “Private Investment” projects what we need?

NOB/Navy Hill: How many jobs and minority contracts?

NOB/Navy Hill: How many jobs and minority contracts?