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Richmond Expected To Give Largest Contribution Ever To Affordable Housing Trust Fund

The City of Richmond will set aside $2.9 million for its Affordable Housing Trust Fund in the next fiscal year, the largest one-time contribution since it was created in 2004.

The contribution to the trust fund is part of the 2019/2020 budget that City Council is expected to approve on May 13. Richmond’s  Affordable Housing Trust Fund provides money to developers who are building affordable housing. Many of the grants, which ranged from $25,000 to $250,000 in 2017, are meant to fill gaps in financing.

Laura Lafayette, CEO of the Richmond Realtors Association, said affordable housing developments can sometimes have dozens of financing sources. And the unprecedented contribution to the trust fund will allow the city to have a bigger impact.

“It takes a lot of money to develop affordable housing, so you need robust resources flowing into the trust fund in order for it to really make a difference,” Lafayette said.

According to city officials, Richmond nonprofits and developers leverage $31 in funding from other sources for every $1 they get from the trust fund. This is done through things like matching grants.

The grants awarded by Richmond’s Affordable Housing Trust Fund are meant to help the neediest residents. One-third of the funding is restricted to programs and projects that reach people making 30 percent of the area median income or about $24,000 per year for a family of four. The majority grants target people making around 60 percent of area median income or about $50,000 per year for a family of four.

Building more affordable housing has been a key part of Richmond Mayor Levar Stoney’s agenda. At his State of the City Address last year, he said he wants to see  the construction of 1,500 affordable units over the next 5 years.

Sixth District City Council Member Ellen Robertson hailed the increased funding for the trust fund as “great progress” toward tackling the issue of housing affordability. Robertson, who is on the trust fund’s board, has been advocating for the city to make a yearly contribution of $5 million.

She said the $2.9 million in next year’s budget will allow Richmond to explore loaning money to affordable housing developers, rather than mainly sticking with grants.

“That would increase the money coming in as they repay the loans back into the fund,” she said.

Beyond affordable housing development, the trust fund also provides grants for homeless support services and down payment assistance. The non-profit Homeward received a small grant last year to supplement funding for the Homeless Crisis Line. The call-in service connects people in the Richmond region with emergency shelter or other housing resources.

Kelly King Horne, Homeward’s CEO, said the additional funding from the city couldn’t come at a better time. Virginia Governor Ralph Northam just announced last month that the state was handing out  $2.2 million in grants for homeless reduction. Northam also scored  $4 million in additional funding for the Virginia Affordable Housing Trust Fund.

“To do development or even to provide homeless services is going to be expensive just by the nature of the activity,” Horne said. “But it helps if you can add all these sources up. So for the city to step up at this time, it’s going to be transformational.”

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