Mayor pushes housing fund: Norris wants portion of real estate levy, lodging tax set aside

Feb 02, 2008 (The Daily Progress - McClatchy-Tribune Information Services via COMTEX) -- Charlottesville Mayor Dave Norris is pushing his fellow city councilors to set aside each year 2 cents of the real estate property tax and 25 percent of the city's lodging tax revenues for affordable housing programs -- a total this year of more than $1.7 million.
Establishing a devoted source would ensure that housing initiatives are not susceptible to the whims of councilors or the vagaries of the economy, proponents say.

"My main interest is getting a sustained and dedicated revenue source so we don't have this annual fight for every penny," Norris said.

The council is slated to take up the issue Monday.

Councilor Holly Edwards has previously stated her desire for a dedicated stream, while Councilor Julian Taliaferro said he generally supports the concept.

Some other councilors, however, have reservations. David Brown said he is wary of tying the hands of future councils by establishing a dedicated stream. If the council goes in that direction, he said, those who support increased spending on the bus system or city infrastructure might also push for sustained revenue sources.

"I'm leery of dedicating pennies on the tax rate to anything," he added. "I think every council has to look at the overall budget and decide where its priorities are."

Councilor Satyendra Huja said he supports in principle the creation of a dedicated stream but believes the council should hold off on setting an exact figure until it begins crafting the fiscal 2009 budget next month.

"I think it should be done at the same time as the other issues in the budget, so all the issues get a fair hearing together," he said.

This year the city has made an unprecedented commitment of $2.15 million to start an affordable housing trust fund, a huge jump from the $580,000 for such programs in the fiscal 2007 budget. Of the current year's funding, $1.5 million is from surplus dollars, while the rest comes from the city's general fund.

But city staffers are recommending that the upcoming budget include only $1.4 million for such initiatives -- a 36 percent decrease.

Norris and other affordable housing advocates are looking to boost that number and believe creating a dedicated stream from tax revenues is the best way to do so.

"I think affordable housing continues to be our biggest challenge and this is not the time to be retreating from that commitment," Norris said.

As part of this new package, the council will discuss ways to increase developer contributions to the affordable housing trust fund. While Albemarle County requires that 15 percent of units in a rezoned development be set aside at affordable rates, or that a developer contribute a comparable amount of money to a housing fund, Charlottesville has no such rules.

One reason is that the city receives few rezoning requests for which it can expect developer contributions. In 2007, only two such projects came forward and only one included an affordable housing contribution -- for $300,000.

"We have to create some real incentives for developer contributions and bring the development community to the table so they can be a part of the solution," Norris said.

Help may soon come from the General Assembly. Sen. R. Creigh Deeds, D-Bath County, and Del. David J. Toscano, D-Charlottesville, have both introduced legislation that would allow the city to give developers more density in return for affordable housing contributions.

But councilors insist that the lack of affordable housing is a regional issue and the burden cannot be placed solely on Charlottesville. While the city is spending $2.1 million on housing initiatives this year, Albemarle is putting forward $330,000, plus an additional $300,000 received from a developer.

Councilors would like county supervisors to put more money toward affordable housing in the upcoming budget.

"I'm not saying the county needs to have an equal commitment, but the city cannot be expected to solve what is a regional problem," Brown said.