This post was written by Jill Norcross, Executive Director.

Dear Friend,

Last week, we wrapped up our state and local budget advocacy in support of affordable housing resources for FY 2025. We wanted to share progress made in each of the jurisdictions and to share outcomes and next steps.

Partnerships are Crucial

Successful budget advocacy is a very collaborative and time-consuming endeavor. It can be both rewarding and disappointing, but you never feel alone in the work. We would like to thank the organizations who are our true budget advocacy partners and would like to say congratulations where we were able to move the needle this year and we will keep up the good work next year. Many of these organizations are alliances of individuals and communities, and comprise local appointed committees and commissions, and we are grateful to the entire network of affordable housing advocates (in alphabetical order and apologies for any omissions):

Arlington Community Foundation, Bu-GATA, Coalition for Smarter Growth, Community Foundation of Northern Fauquier and Loudoun Counties, Cornerstones, Fairfax Healthy Communities, NAACP Arlington, NAACP Fairfax, Loudoun Chamber of Commerce, Loudoun Housing Justice Coalition, Loudoun Workforce Housing Now Campaign, Tenants and Workers United, Virginia Coalition for Immigrants’ Rights, Virginia Housing Alliance, Virginia Interfaith Center for Public Policy, Virginia Poverty & Law Center, VOICE, Wellington Development, and YIMBYs of NOVA.

Also thanks to NVAHA’s Board of Directors, Leadership Council and NVAHA’s Arlington Housing Alliance Leadership Group (formerly AHS) who support our organization and provide crucial guidance and direction in our advocacy.

Finally, we would be remiss if we did not thank our local and state government staff; members of local housing boards, commissions and councils (too many to name); and our local and state elected officials who work tirelessly to prepare the budgets, provide program updates, track data and need, and make the difficult budgetary decisions on behalf of the constituents they serve.

The City of Alexandria’s FY 2025 Budget was adopted this month. The City Council approved a real estate rate increase of 2.5 cents, bringing the rate to $1.135, the first increase in 7 years. $33.1 million was approved for affordable housing and eviction prevention funding, including $16.8 million allocated for the affordable housing trust fund, marking a 5.8% increase over last year. The City Manager’s proposed FY2025 - FY2034 CIP included $3 million in one-time funding for affordable housing projects in the pipeline. 

Bottom line: City Council added $3M to the budget to support projects in the pipeline. More local funding is needed to fund additional projects in the pipeline. There is concern that no new projects are being developed as there are no local funds available in the near term.

The FY25 Arlington County Budget passed with the base real estate tax increasing by 2 cents to $1.033. A total of $113 million was allocated for various programs aimed at stabilizing housing for households in need. This includes $15.1 million for the County’s Housing Grant Program, with a new pilot for youth aging out of foster care, $5.7 million for Permanent Supportive Housing, $4.3 million for Eviction Prevention, and $21.5 million for the Affordable Housing Investment Fund (AHIF). The AHIF included an additional $1 million for affordable units at 30% of area median income. The Board retained two Planning positions slated to be eliminated, which advocates had pointed out were crucial for efforts such as the Langston Blvd corridor. 

Bottom line: Kudos to Arlington for providing the most support for affordable housing. The $21.5 million AHIF contribution and $15.1 million in housing grants is considerable. There is a lot to celebrate.

The Fairfax County Board of Supervisors adopted the FY25 Budget, lowering the advertised tax rate from $1.135 to $1.125. The budget includes a total housing investment of $184 million, with $42 M for the housing fund.  Additionally, $4 million was allocated in FY 2024's Third Quarter Review (end of March), an important source of funding for affordable housing in the recent past. The Board aims to reach a total investment of two pennies on the Real Estate Tax rate by FY 2027, urging the County Executive to add recurring resources in FY 2026. 

Bottom line: No new funding for affordable housing through the budget process, but no cuts either, in this difficult budget year. We need to make sure Fairfax County sticks to the timeline to invest two pennies on the Real Estate Tax rate by FY2027, as we have seen this goal slip before.

The Loudoun County Board of Supervisors approved a $6.9 billion budget for FY 2025. The budget features a reduced real property tax rate of $0.865 per $100 assessed value (one cent lower than the FY23 rate). The budget designates funding equivalent to one-half cent of the real property tax rate (approximately $7.4 million) to affordable housing programs.

Bottom line: Additionally, the board unanimously voted to consider further bolstering its housing funding during fund balance discussions by allocating the equivalent of a half penny on the real estate tax rate — roughly $7.4 million — to the County’s Housing Fund. If the additional half-penny contribution passes during fund balance discussions, it will also be added to the fiscal 2026 base budget and included each year going forward. The County is expected to have an approximately $200 million surplus at the end of FY2024. This consideration can be attributed to the awareness of the issue and more advocacy this year from our partners.

The Prince William County Board of Supervisors approved a $1.8 billion budget for FY 2025, which includes a reduction in the real estate tax rate from $0.966 to $0.920 per $100 of assessed value. This decrease was counterbalanced by an increase in the C&P (data center) tax rate up to $3.70 per $100 of assessed value. The budget demonstrates a commitment to affordable housing by establishing an affordable housing office and allocating $5.5 million in both FY25 and FY26, with $5 million annually in FY 27-29, to an affordable housing trust aimed at promoting the construction of affordable housing units. 

Bottom line: Amazing progress in a short time, but a long time coming. We are excited about everything happening in Prince William and recognize there will be growing pains, but the County is positioning themselves for success.

Statewide:

NVAHA is proud to partner with the Virginia Housing Alliance on our statewide advocacy and appreciates being able to share their updates. The Governor signed the budget on May 15. It was a long session. The Virginia Housing Trust Fund ended up with an increase of $12.5 M for both FY 25 and FY 26. The PSH budget initially faced a $10 M cut in its first year from the governor's introduced budget. However, efforts to regain funding were partially successful, recapturing $3 million annually. This recovery, though, leaves the total funding still down by $4 million. The appropriation for the state rental assistance program was increased by $1 million per year, aimed at bolstering support for tenants in need across the state. Two new pilot programs, each funded with $5 million from unobligated RGGI funds, were introduced for the acquisition of manufactured home parks, and for down payment assistance to households earning 60% or less of the area median income.

Bottom line:  A difficult year for our state as there is a lot of awareness on the issue but not the political will to make the investments needed. Housing represents a mere .68% of the Commonwealth’s FY25 budget, yet it is often cited as a top concern across the state. 

Correcting Misinformation

Housing finance and government support to address affordable housing goals is complicated and is not without inefficiencies. Additionally, we have not figured out how to finance critical support services for residents, especially for our most vulnerable populations. Yet, more and more Northern Virginia residents are burdened by their housing costs, so we use the tools and solutions we have to address the need.

Unfortunately, we heard some incorrect information being put forward during this budget season and want to clarify that local government investments in affordable housing production and preservation, most often take the form of low-interest loans (soft financing) in these projects. Our localities become investors in the projects, which leverage additional federal, state and private funding, and allow local governments to target deeper affordability and/or longer affordability periods. The local investments are not “giveaways to developers,” but a critical part of the “capital stack” or layered financing, which allows for the construction and preservation of affordable homes across Virginia.

What to watch: Localities in our state like Henrico County (outside of Richmond) just passed a $60 M Housing Trust Fund from data center revenue. Our East Coast partners jurisdictions with similar population sizes, Charlotte ($50 M), Raleigh ($80 M), and Pittsburgh ($30.6 M) all have passed local bonds to address affordable housing needs. In the DMV, we need a more regional approach for a housing trust fund, to hopefully bring in new partners, and not just rely on local government sources. 

What to do: Of course, the funding is key, but we also need advocacy for improved housing policies and streamlined development processes. Affordable housing supporters also need to show up at Planning Commission, City Council and County Board meetings to show support for these policies as well as for projects seeking land-use and financing approvals. It is not enough to come out once a year to ask for more money, we need to support our local officials as they face opposition to additional housing development at the project level.

Stay tuned and if you have feedback or would like to join us in our advocacy efforts, please email us at [email protected].