Giving out money to help Richmond residents make their rent or mortgage payments is apparently more complicated than city officials thought.

After allocating $3.9 million in late 2024 to help cash-strapped residents pay for housing, the city has only made $20,400 in payments through the new Gap Grant Program, according to newly published city data. 

That means almost the entire $3.9 million set aside for direct housing assistance is still sitting unused in a city that declared itself to be in a housing crisis two years ago.

“I would have liked to have seen more of this money in the hands of Richmonders who need it,” Council Vice President Katherine Jordan (2nd District) said Wednesday after a Council committee got an update on the program from Mayor Danny Avula’s administration.

Former Mayor Levar Stoney and Avula have both opposed across-the-board reductions in real estate taxes, arguing it would disproportionately benefit the city’s most well-off residents and businesses with the most high-value properties. They’ve both said they prefer more narrow types of relief targeted to residents who truly need the help.

That’s exactly what the Gap Grant Program — conceived under Stoney and handed off to Avula —  was supposed to do. But the numbers indicate the city has struggled to implement a new bureaucratic process that requires would-be recipients to fill out applications that are then reviewed to determine if their financial need is dire enough to receive the aid.

Out of more than 2,300 applications received by the city so far, only 22 have been approved.

Around 1,100 applications have been denied, either because the applicant didn’t live in Richmond or didn’t file a complete application with all documents needed to prove financial hardship.

New Finance Director Letitia Shelton said Wednesday that there has only been one staff member working on processing applications that aren’t coming in digitally and are instead submitted on paper.

“There’s actually paperwork that this one person was responsible for,” Shelton said.

Most of the successful applications went through in the first six months of the year, indicating the work has slowed down more recently.

Shelton said there were originally more people assigned to process applications, but it had “dwindled down to just one” by the time she arrived at City Hall in early August.

The city has just recently hired three part-time staffers to work through a backlog of 975 applications, Shelton said. She acknowledged the city should have been quicker to tell the public there were major delays with the program.

“That is something that we fell short on that we should have publicized,” Shelton said.

Applications for the grant program are being handled by the Finance Department’s real estate division, Shelton said. That division is budgeted for 10 staffers but currently has four vacant positions.

To qualify for a grant, applicants must fall below income thresholds for the Richmond metropolitan area as defined by the U.S. Department of Housing and Urban Development that vary based on the size of the household. For a single person, the income threshold is $61,800. For a family of four, it’s $88,250.

Applicants also have to show that more than 30% of their household income goes to housing costs, requiring them to prove how much they pay for housing and utilities by submitting rental leases, mortgage statements and utility bills.

The program took effect Jan. 1. The application window opened Jan. 13 and was set to close Dec. 31, but the city will continue the program until the $3.9 million is “zeroed out.”

Councilor Nicole Jones (9th District) told Shelton she had noticed the program was getting new attention on social media this week, which could lead to another influx of applications adding to the backlog.

“Whatever challenges that we had, just know it’s getting ready to be flooded again,” Jones said.

The grant program was part of a package of tax relief ideas Stoney proposed as an alternative to reducing the city’s real estate tax rate by four cents, which would require little new bureaucratic effort on the city’s part.

Another key element of Stoney’s proposal were the one-time tax rebate checks that were delayed earlier this year after the city botched an initial attempt to mail them.

Stoney also proposed a new initiative allowing residents with disabilities or those older than 65 to have their real estate taxes frozen in place, shielding them from higher costs as their property values rise. The city already offered tax relief for older and disabled people, but the freeze option was made available as an alternative to a broader group of people. According to city data, thousands of people are still receiving the traditional tax relief. Only one person has taken the newly implemented freeze option.

Councilor Ellen Robertson (6th District) suggested Wednesday that the city could do a better job of making its targeted tax relief programs a priority.

“The people that we’re talking about in these categories are people that really need assistance,” she said.

The Avula administration said it was planning to report back on efforts to clear the Gap Grant backlog within 60 days.

Contact Reporter Graham Moomaw at gmoomaw@richmonder.org