What's Happening?
Virginia has implemented a new law, championed by Sen. Elizabeth Bennett-Parker, D-Alexandria, that empowers local governments with the right of first refusal when affordable housing properties are put up for sale. This legislation allows cities and counties
to purchase apartments whose affordability status, often tied to federal Low Income Housing Tax Credits (LIHTC), is nearing expiration. The goal is to prevent the displacement of residents by preserving these units as affordable housing, rather than allowing them to transition to market-rate prices if acquired by private buyers. A newly launched digital dashboard, a collaborative effort by Housing Forward Virginia, Virginia Housing Alliance, and Locus Impact, tracks these expiring affordability terms across the state. Over 18,000 of Virginia's nearly 108,000 LIHTC units are projected to lose their affordable status by 2030, with some expiring within the next year. Examples include Chicago Manor in Richmond, Hillside in Tazewell, and Fields at Cascades in Loudoun County.
Why It's Important?
This law is a critical step in addressing Virginia's affordable housing crisis, which threatens to displace thousands of low-income residents. By granting localities the right of first refusal, the state is providing a mechanism to proactively protect existing affordable housing stock. The loss of these units exacerbates housing shortages and increases pressure on vulnerable populations who struggle to afford market-rate rents. The initiative also highlights the broader challenge of maintaining affordability once initial tax credit periods expire. The ability for local governments and non-profit organizations to acquire these properties is crucial, as non-profits often rely on diverse funding sources, including federal grants, to sustain affordability. This approach aims to stabilize communities and prevent the ripple effects of displacement, such as increased homelessness and strain on social services.
What's Next?
The effectiveness of this new law will largely depend on the ability of local governments and non-profit housing organizations to secure the necessary funding to acquire these properties. Maria Dougherty of Housing Forward Virginia emphasized that while identifying expiring units and granting the right of first refusal are important, securing funding for non-profits to compete in the market is essential for long-term preservation. The 21st Century Road To Housing Act, a bipartisan federal law, includes provisions to fund affordable housing preservation programs, and advocates like Richmond Mayor Danny Avula are urging Congress to fully appropriate these funds. The digital dashboard will continue to be refined with updated data, including information on properties that have already transitioned to market rate, to inform future strategies and learn from past outcomes. Local governments will likely use the dashboard to prioritize properties for acquisition and develop funding strategies.
Beyond the Headlines
The Virginia initiative underscores a national challenge in affordable housing: the expiration of affordability covenants on properties developed with federal tax credits. While LIHTC programs are vital for creating affordable housing, their time-limited nature means a continuous threat of units reverting to market rates. This situation raises ethical questions about the long-term commitment to housing affordability and the responsibility of governments to ensure stable housing for all income levels. The law also highlights the growing recognition that a multi-faceted approach, combining legislative action, data-driven tools, and financial support for non-profits, is necessary to combat the complex issue of housing insecurity. It could serve as a model for other states facing similar challenges, promoting a more proactive and preventative strategy to preserve affordable housing rather than solely focusing on new construction.
