The following is an online extra from our September issue, on newsstands now.
Ted Heck and Laura Goren saw a dramatic increase in their property assessment this year. (Photo by Jay Paul)
When Ted Heck moved into a two-story, three-bedroom house at Decatur and East 13th streets in 2010, he knew of the Blackwell neighborhood’s high-crime reputation from the 1980s and ‘90s. His stepfather, a retired probation and parole officer, worried about the safety of Heck and his partner, Laura Goren.
But it was an opportunity Heck had been waiting for. After years of living in apartments, he qualified for a federal first-time homebuyer credit and down payment assistance through the nonprofit Housing Opportunities Made Equal. The house he bought was part of a Better Housing Coalition project, funded through the U.S. Department of Housing and Urban Development’s HOPE VI program to rebuild public housing units for rental and ownership.
“It was still a neighborhood in recovery, and there were still a lot of empty lots around,” says Heck, who works as a contract monitor for HIV prevention grants and coordinator for transgender health services with the Virginia Department of Health, “a lot of folks who were working-class. They’re not people who would have an easy time buying a house.”
But that’s changing. During the past eight years, more people in the middle- to upper-middle income ranges have moved in, along with commercial development such as Hot Diggity Donuts.
Along with the influx of residents and redevelopment dollars, the cost of housing in the neighborhood is rising. When the couple received their city property tax assessment notice this summer, they noticed a 16.2 percent increase to $172,000, up from $148,000 the previous year. Given Richmond’s real estate tax rate, their annual property tax bill would climb almost $300.
Not long after the assessment notice, they received a letter from a capital investor saying he’d pay them cash for the house. Other letters and flyers they receive weekly promise mortgage refinancing deals. Heck and Goren plan to stay, but they worry about the effects of gentrification.
“I don’t like the idea of that door being shut behind us,” says Goren, a research director for the Commonwealth Institute for Fiscal Analysis. “I don’t think vacant houses benefit anybody. But at the same time, I don’t want it to push people out.”
The ability of longtime residents to remain in their homes was a concern raised by during a July discussion about extending the Manchester Residential and Commercial Historic District to the Blackwell neighborhood. Three Richmond City Council members whose districts include part of the proposed expansion area attended the meeting held by the Virginia Department of Historic Resources. (Update: A Sept. 20 meeting to consider historic district status for Blackwell has been postponed to Oct. 10 at 1 p.m. at New Life Deliverance Tabernacle, 900 Decatur St. The Virginia Board of Historic Resources and State Review Board also will consider Blackwell as a standalone district rather than an expansion of the Manchester district. A public meeting about the district is planned for Sept. 27, 6 p.m., at New Life Deliverance Tabernacle.)
While the city does offer real estate tax relief for senior citizens and disabled residents, along with partial exemptions for rehabilitated structures, those measures are not sufficient, says 6th District Councilwoman Ellen Robertson, one of the three members present. And with regard to ensuring an adequate supply of affordable housing, she says, “I think there’s more we need to work on getting done.”
According to a letter obtained by the Richmond Times-Dispatch, Robertson later wrote to Mayor Levar Stoney, expressing concern on behalf of African-American residents about the potential that a historic district designation "will cause devastating economic damages to them and their heritage.” She suggested in the Aug. 16 letter that the city should act to slow the pace of development.
James “J.J.” Minor III, president of the Richmond branch of the NAACP, says he’s been watching the Blackwell historic district proposal with personal interest, because he’s related to the family for whom the neighborhood is named and he originally lived there.
“Blackwell has a lot of history, and I think we need to do whatever we can to preserve and protect the history,” Minor says. “I also feel there may be room for responsible development of the area. But they need to engage the community and get community buy-in.”
Minor adds, “I think there should be affordable housing in every part of the city of Richmond. Most of it is in places of poverty.”
In light of the Blackwell proposal, the Richmond NAACP is making plans for a late September town hall focused on housing, to be held in the neighborhood. “Blackwell will be the highlight, but we’ll talk about the whole city of Richmond,” he says. Update: the town hall will be held Wednesday, Sept. 26 at 6 p.m. at New Life Deliverance Tabernacle, 900 Decatur St. Topics include gentrification, Blackwell and the historic district application process.
The Richmond Assessors Office confirms that property values in the Manchester and Blackwell areas are rising faster than the overall rate of the city. While property values rose 7.3 percent citywide in figures released this summer, assessments in the area identified as Bainbridge/Manchester/Blackwell climbed 19.01 percent.
From 2010 to 2018, the total taxable value of single-family residential property in a 1 1/2 square-mile area that covers Manchester and Blackwell rose from roughly $121. 9 million to $134.4 million, while the taxable value of multi-family property in the same area rose from $98.9 million to $329.7 million during the same time frame, according to data from the Assessors Office.
Kelvin Hanson of The Hanson Co. (Photo by Jay Paul)
Much of the multi-family development has been market rate. Hanson and Co. owner Kelvin Hanson, who developed Old Manchester Plaza on Hull Street in 2010 using federal low-income housing tax credits administered by the Virginia Housing Development Authority, estimates the ratio of market-rate to affordable-housing units at 20 to 1. In Old Manchester Plaza, one-bedroom units rent for $695 to $750 and two-bedroom units for $950, he says. In contrast, rent for a one-bedroom unit at The Terraces at Manchester ranges from $1,088 to $1,650, and a two-bedroom apartment runs from $1,510 to $3,500.
"There needs to be housing for the workforce," close to where jobs are, Hanson says. "We have some teachers, people that work for public utilities, some entry-level college students that graduated and have their first job. A lot of them cannot afford to pay $1,000 a month for a one-bedroom, and above that in some cases."
As the supply of housing grows, city leaders and affordable housing advocates are considering ways to ensure that people of modest income can find places to live.
One idea city officials are looking into is stipulating a percentage of affordable housing for residential developments in which the city is offering tax incentives or donating land, Robertson says in an interview. Other possibilities involve offering tax abatements for new construction of affordable housing and adopting inclusionary zoning, which would allow the city to require that any development contain a certain amount of affordable housing. “We would need permission from the General Assembly to be able to do that,” she says.
A report commissioned by the Partnership for Affordable Housing and released in 2015, “Housing the Richmond Region,” found that 35 percent of households in the region — including the city and counties of Charles City, Chesterfield, Goochland, Hanover, Henrico, New Kent and Powhatan — are considered “cost burdened,” meaning they spend more than 30 percent of their income on housing, and 15 percent spend more than half their income on housing. The city of Richmond had the highest percentage of cost-burdened households in the region, at close to 50 percent. The report estimated that at least 15,000 additional units are needed to accommodate low-income households in the region.
“I would bet that when we update the numbers next year, we’ll see the problem has gotten worse,” says Greta Harris, president and CEO of the Better Housing Coalition, a nonprofit community development corporation focused on affordable housing, noting that a new report is in the works. “We’ve seen an influx of new people coming into the city. The demand for housing is rising, and when demand is high, that pushes price points. Additionally, we’re in a rising interest rate environment and we’re seeing a labor shortage,” which is driving up the cost of producing new housing.
Harris, along with Richmond Area Association of Realtors CEO Laura Lafayette, is leading a task force convened by Mayor Levar Stoney after last fall’s Affordable Housing and Community Development Summit, attended by elected officials and about 150 others who work in the public and private sectors and for philanthropic, nonprofit and faith-based organizations. The task force includes about 16 people comprising city administrators, private developers, trade associations, representatives of the Richmond Redevelopment and Housing Authority, fair housing advocates and others engaged in nonprofit work. Subgroups of the task force have been studying housing policy, financial resources and civic engagement, and made recommendations to the larger group, Harris says.
Greta Harris, president and CEO of the Better Housing Coalition, talks with Richmond Area Association of Realtors CEO Laura Lafayette, during last fall’s Affordable Housing and Community Development Summit. (Photo by Tina Eshleman)
She and Lafayette recently shared some of the group’s ideas with the mayor, and have been meeting with county leaders to explore possibilities for regional cooperation. The next step is to seek funding from philanthropic organizations this fall to hire consultants who will help the task force draft a long-term plan, backed by data, that addresses the full spectrum of housing needs. There likely will be an opportunity for more public input before a final version is presented to the mayor, perhaps by the spring of 2019, Harris says.
One idea the task force has looked into is a real estate tax “circuit breaker,” a form of relief that could put a cap on taxes for long-term residents of modest income.
“We’re seeing examples in Church Hill, where someone has lived there 60 years and they’re struggling with being able to afford the new real estate tax bill,” Harris says. “We want to be able to balance that so that we will be an inclusive community that values new people that are coming in as well as longtime residents who want to stay.”
Another possibility is developing a dedicated funding stream for the city’s Affordable Housing Trust Fund, using new revenue from properties for which a tax abatement period is ending. The fund provides "gap" financing in the form of loans with little or no interest for development or rehabilitation of affordable housing units, as well as grant money for services such as homebuyer education, homelessness prevention and support for people with disabilities. (Stoney's budget, approved by City Council, increased the fund from $731,000 in fiscal year 2018 to $1 million per year in 2019 and 2020.)
“Our hope is to have a more comprehensive approach and not just one ordinance here or there, but to be much more holistic in how we’re looking at the overall city needs and then having the appropriate policies queued up in the right order, so they’re leveraging each new policy and also aligning that with future budgets,” Harris says.
In neighborhoods where historic tax credits spur rapid development, affordable housing policies are necessary for balance, she adds.
“The private market is important to attracting investment capital into neighborhoods that haven’t received infusions of capital,” she says, “but the policies we’re trying to put in place help influence the market, because, left to its own devices, the market is not equitable. We’ve seen time and time again in the country and this community, left to its own, the market adversely impacts certain segments of our society.”
There are some affordable housing units in the works in or near Blackwell on Richmond's South Side. The Hollands is a subdivision of 22 single-family townhouses and duplexes being built in Swansboro by the nonprofit Southside Community Development and Housing Corp. along Perry Street in the block between West 22nd and West 24th streets and McDonough Street. The units will be sold to first-time homebuyers whose income is no more than 80 percent of the area's median household income as defined by the U.S. Department of Housing and Urban Development. For a single person, that would be $46,600, or $53,250 for a couple.
Dianna Bowser, SCDHC's president and CEO, says the project is being financed with HUD funds made available through a grant from the city. She says the intended price range for the homes is $150,000 to $175,000 and that site development work is slated to start in December, with home construction beginning next spring.
"I believe we’ll have quite a demand," she says. "There’s lack of affordable inventory in the city of Richmond and even in nearby counties such as Henrico and Chesterfield."
In July, the Richmond Redevelopment and Housing Authority approved the disposition of 56 parcels, primarily in the Blackwell area, that were among the properties in the HOPE VI Conservation and Redevelopment Plan.
Although there is no timetable for the sale or transfer of those properties, says RRHA General Counsel Cory Wolfe, "We anticipate that the disposition strategy will allow for the output of affordable rental and/or homeownership for many families in Richmond."
Last summer, the authority disposed of 66 properties, auctioning about half and transferring the rest to the nonprofits Richmond Metropolitan Habitat for Humanity and Project:HOMES to be renovated and sold to families earning 80 percent or less of the area median income.
Wolfe says the RRHA is also completing development of the Blackwell Senior Cottages, 18 rental cottages for low- and moderate-income senior citizens, south of Maury Street along East 15th and East 16th streets. Burt Pinnock, principal at Baskervill architectural firm, which designed the cottages, says that 14 of them are occupied, and the remaining units are being completed.
While the need for affordable housing is great, the Better Housing Coalition's Harris says she is encouraged by the attention focused on the issue lately.
“Throughout my career I’ve never heard as much interest and even support for affordable housing,” she says. “Folks are making connections between the performance of neighborhood-based schools and where you live, and the connection between your health and well-being based on how you live and where you live.”
