After putting forward dueling proposals to provide more reliable funding to Richmond’s Affordable Housing Trust Fund, Mayor Danny Avula and six members of the City Council have struck a compromise. 

The new plan, which was introduced Monday night and could be voted on as early as Feb. 23, would devote 2.5% of the prior year’s real estate taxes to the trust fund beginning July 1, 2028. 

Under a “transition plan,” the city would have the option of pulling the same amount of money from its capital improvements budget for the trust fund in the next two years. 

An annual report would be required by Dec. 31 each year with information on funding, the amount of housing produced, the leveraging of any public or private dollars and the fund’s long-term financial sustainability.

Additionally, the Council would be required to reauthorize the funding commitment in 2031 and “every four fiscal years thereafter.” 

Besides Avula, the proposal has gotten the support of City Council President Cynthia Newbille (7th Dist.) and Councilors Andrew Breton (1st Dist.), Stephanie Lynch (5th Dist.), Ellen Robertson (6th Dist.), Reva Trammell (8th Dist.) and Nicole Jones (9th Dist.).

The approach “would be consistent, reliable, and easy for the public to understand,” Robertson wrote in a memo accompanying the new ordinance. “Not only is 2.5% of core real estate revenues a flat amount, but it is also equivalent to 3 pennies of the $1.20 per $100” in assessed real estate value that property owners currently pay. 

The trust fund provides grants and loans to developers and groups who build and preserve affordable housing, but for years only issued limited, sporadic awards. Beginning in 2023, however, the city began issuing bonds — a planned $50 million over five years — and routing the proceeds to the trust fund, leading to about $7 million in awards in 2024 and over $9 million in 2025. 

Among the projects that received funding last year are the Highland Grove project in Northside that is constructing affordable houses for ownership and four affordable multifamily projects in Manchester and Forest Hill on the Southside. 

The Affordable Housing Trust Fund has been a sore point for several years among affordable housing groups, which have criticized the unreliability of its funding stream and the city’s failure to devote required revenues to it in line with a 2021 ordinance. An audit released Friday confirmed many of those criticisms and noted that Richmond officials never crafted a formal plan for how to meet the funding requirements mandated by local law. 

Both Avula and a group of city councilors led by Robertson earlier this winter proposed getting rid of the 2021 law and replacing it with a new system funded by Richmond’s rapidly increasing real estate tax revenues, although the two disagreed over exactly how the process should work. 

Real estate tax revenues have more than doubled over the past decade, from roughly $231 million to an estimated more than half a billion this year. 

Robertson’s memo notes that, adjusted for inflation, the median residential real estate assessment in Richmond rose 71% between 2016 and 2026, while median household income only grew 21%. 

Those figures “point to an urgent need to marshal all available tools to combat the affordability crisis,” she wrote. 

Contact Reporter Sarah Vogelsong at svogelsong@richmonder.org