By Derrick Perkins (File photo)
Allocating tax dollars outside of the annual budget negotiations that mark the end of spring has left city councilors sharply divided, nowhere more so than affordable housing funding.
That debate sprung to the forefront during recent discussions of the National Science Foundation’s relocation to Alexandria. The deal struck to lure the federal agency away from Arlington dropped a previously agreed-upon $1.04 million contribution to the city’s affordable housing fund.
When City Councilor John Chapman first proposed siphoning $500,000 of real estate taxes from the site for the fund last month, he ran into opposition from two of his colleagues: Paul Smedberg and Justin Wilson.
“I think this is wrong,” said Wilson at last week’s meeting, when the council moved to approve Chapman’s proposal. “I think this is a complete perversion of our budget process.”
They have argued ardently against earmarking tax dollars independent of budget talks, even though doing so threatens to put them at odds — on the surface at least — with affordable housing advocates.
“There’s definitely people who are concerned that this is ... specific to affordable housing, and I’ve had to have some discussions where I’ve clarified that,” Wilson said. “This has nothing to do with affordable housing, except that this is the topic that sparked this.”
And affordable housing has become a hot topic as Alexandria’s supply shrinks. More than 12,000 units deemed affordable to a household making up to 60 percent of the area median income disappeared between 2000 and 2011. Officials have crafted a master plan for dealing with the crisis, which could be approved before the year’s end.
Last month’s disagreement over earmarking real estate taxes for efforts aimed at saving affordable housing units was not the first. City councilors clashed in the spring when the proposed budget omitted set-asides for the affordable housing and open space funds.
While both still received tax dollars, Vice Mayor Allison Silberberg joined Chapman in successfully arguing that the set-asides — which come off the top of real estate taxes rather than going into the general fund for allocation — demonstrated the city’s commitment. In the end, the affordable housing set-aside was preserved.
But that’s bad practice, according to Smedberg and Wilson. In an October 31 letter to the editor, the two city councilors argued that — while important — affordable housing is one priority among many in Alexandria. Allocating money for the cause in a vacuum could come at a future cost, they wrote.
In the past, though, Smedberg has argued in favor of earmarking city revenue. As city council formalized leasing Wales Alley to Virtue Feed & Grain in 2010, Smedberg successfully pushed to shunt the expected rent, about $52,000 over five years, into a historic fund.
The difference? Rental income is not the same as revenue from real estate taxes, Smedberg said.
“It’s not something that is going into the general fund, per se, because their tax bill is going up,” said Smedberg, who admits the distinction is nuanced. “[It] is their version of a developer contribution. ... It is stuff we wouldn’t otherwise realize. The developers, when they have a project and build it, we’re going to have funds from that, but in addition to that, they have these voluntary contributions [and] there is a whole host of things it can help go toward.”
And that’s a far cry from dedicating tax dollars that — in the National Science Foundation’s case — have not even been collected, he said.
“Hopefully this building will go up, but we don’t know until they start putting shovels in the ground,” Smedberg said. “From a policy perspective, from a budget-practice perspective, I just don’t think it is wise. If we are going to consider it, we should at least do it in the context of the budget, evaluate [it] in the context of the budget.”
Wilson, who describes himself as a supporter of affordable housing, worries that making the issue paramount will put it inadvertently in the crosshairs. Critics of cuts to other areas of the budget may place the blame on affordable housing efforts, he said.
“Yes, I’m uncomfortable that [this debate] is framing me in a position where it looks like I’m against affordable housing when I’m not, but the reality is it is an issue that needed to be sorted through,” Wilson said. “I’m very concerned with the way we’re approaching these issues. It may be great politics ... but it’s really bad government.”