Virginia Tomorrow

In this time of economic challenge elected leaders must come together to put Virginia First in bipartisan ways, working together for solutions and in this case to Help Housing Now. In that spirit, I am so encouraged to have working with me other fellow legislators, both D’s and R’s and House and Senate, and representatives of the housing industry- both for-profits and non-profits. Organizational members of the coalition include  the Home Builders Association of Virginia, Inc., the Richmond Association of REALTORS, and the Virginia Association of REALTORS.

More than six months ago, after Congress passed the Economic Recovery Act of 2008, I approached the Richmond Association of REALTORS and asked them, “What should Virginia do to help the housing idustry and address consumer confidence?” Knowing that Virginia must have a balanced budget and cannot print money, I knew the stimulus options were limited; nevetheless, I presented them with the idea of establishing in Virginia an incentive program that included a first-time home buyer tax credit, similar to the federal credit.

Since that initial meeting, the realtors (state and local), state homebuilders, and other interested parties conducted several work sessions. This workgroup asked many others, including legislators, industry representatives, and non-profits for input. What developed were broad discussions about what the General Assembly could do not only to reach out to a sagging housing sector, but also what we could do now to ensure that in the future all of Virginia’s citizens would access well-designed, quality constructed housing in safe neighborhoods with good schools and close to good paying jobs. Housing is not simply a pivotal economic engine, but also a key component in our quality of life.

As we stand here today as legislators and citizens, we know that there is no silver bullet for a speedy recovery for our national and state economies. And we also know that when the recovery begins, how quickly it happens and how strong it is depends–in large measure–upon the recovery of the housing industry. the measures we present today have been thoughtfully considered and will prove to be assets for both the housing industry, homeowners, and for those who are displaced from a home now needing access to housing as renters.

I would like to emphasize that we are cognizant of how the downturn in the housing market has helped increase Virginia’s budget shortfall. Fewer home sales equal fewer recordations, grantor and other taxes which equal less revenue for the state. So we believe that it is imperative that the General Assembly take whatever prudent steps it can to incentivize activity in the housing market.

Second, the six measures to be introduced, because of the redstribution of funding, will result in no net increase in spending or dedication of existing General Funds. This is important.

I look forward to working with all of my colleagues as we work to pass this Help Housing Now legislation.

Virginia First Time Homebuyer Incentive Program (Peace)- This bill would provide a repayable credit to any eligible taxpayer who makes a qualified purchase of a house between January, 1, 2009 and January 1, 2010. The house must be used as the homeowner’s primary residence. An eligible taxpayer is defined as an individual whose federal adjusted gross income does not exceed the household income limitations established by the Virginia Housing and Development Authority (VHDA) for the year in which a qualified purchase is made.

The amount of the credit available is $1,250 for taxpayers filing as single and $2,500 for taxpayers who are married filing jointly. To utilize the credit, the homebuyer must not have had principal ownership in a residence for a three year period before the purchase.

Communities of Opportunity Tax Credit- This bill will use existing funding from the Neighborhood Assistance Act (NAA) to give landlords in census tracts with less than 10% poverty a credit on their state income tax for accepting tenants with Housing Choice Vouchers. Money from the NAA has gone unused according to data provided by the Virginia Department of Social Sevices, the administering agency. This bill incrases the overall “pot” by $500,000, but allocates $4.5 million to the new landlord incentive program with the NAA. Industry stakeholders including but not limited to the Apartment and Office Building Association and the Virginia Apartment Management Association support the bill.

Rental Assistance Pilot Project- This bill would provide $2.4 million annually for a three year state rental assistance pilot project to help families experiencing homelessness afford housing. The Virginia Coalition to End Homelessness encourages the General Assembly to use $2.4 million in *surplus* Temporary Assistance for Needy Families (TANF) funds to create a state rental assistance program that helps families with children pay for rent in private market housing. The family would pay 30% of income toward rent, and rent would be based on the Fair Market rent. The program would be administered by the Virginia Department of Housing and Community Development which would allocate the funds in a competitive process to nonprofit organizations and local governments. This funding would assist approximately 300 households annually. The program would be evaluated to assess its effectiveness in assisting families maintain housing stability and increase self-sufficiency.

Plat Validity Extension- This bill would extend the validity of any proffer, subdivision plat, lot, preliminary plan, final plan, conditional use permit, special use permit, special exception, construction plan, public improvement plan, site plan or any other land use document or action that is valid and outstanding as of January 1, 2009, for a period of five years from its current expiration date, and any deadline or scheduled event specified in the document or action is extended for a period of five years, regardless of whether such expiration or schedule exists by operation of statute, proffer, permit, local ordinance or local custom.

With the significant downturn in the demand for new housing, many previously approved actions of local governments could expire before the demand for new housing returns, now anticipated in late 2010. When this occurs, there could be a shortage of approved lots, causing prices to skyrocket. The extension of the validity of these plans will allow construction to begin as soon as demand returns, keeping the costs of housing down.

State Housing Trust Fund- This bill would create a housing trust fund  to address housing needs across the state and to provide incentives to encourage developers to build affordable housing and mixed income communities. In addition, the housing trust fund would provide matching funds to local housing trust funds so that localities could pursue their own affordable housing goals. Funds would be managed by the Department of Housing and Community Development and disbursed by the Virginia Housing Development Authority.

The capitalization of the fund will be initiated and continued from a percentage of surplus revenues that may be available at he end of a fiscal year, much like the State Water Quality Improvement Fund is provided for today. because of the capitalization and funding mechanism, this bill results in no net increase in spending in this biennium or dedication of existing General Funds.

Livable Home Tax Credit- This bill would facilitate the use of existing state income tax credits to provide an incentive to homeowners who make accessibility improvements to their residences. This change will make the program more effective by increasing the credit cap per unit from $500 to $2,000, by increasing the allowable credit percentage from 25% to 50%.