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City Council approves expansion of real estate tax relief

Jeremy M. Lazarus | 3/1/2019, 6 a.m.
Elderly and totally disabled homeowners won increased relief from real estate taxes beginning in January 2020.
Mayor Stoney

Elderly and totally disabled homeowners won increased relief from real estate taxes beginning in January 2020.

Separately, Mayor Levar M. Stoney’s administration secured permission to essentially donate Richmond’s former nursing home in the East End to Virginia Supportive Housing, clearing the way for the nonprofit housing group to move ahead with its plan to invest $30 million to transform the long vacant building into 105 apartments for homeless individuals and low-income families.

And the administration also received the green light to overhaul the school crossing guard program, use nearly $517,000 to boost pay for some city employees and spend $425,000 to acquire a Brook Road property as the new headquarters for its parking program.

All of those actions won unanimous approval Monday night from Richmond City Council, which sidelined any controversies and rushed to clear the decks as it prepares to receive proposed updates and budget amendments from Mayor Stoney for the 2019-20 fiscal year that is to begin July 1.

The mayor is scheduled to make his budget presentation to the council at 3 p.m. Wednesday, March 6.

The revamped tax relief plan that council approved could potentially allow hundreds more people to qualify and could require the city to budget an extra $1 million to cover the increased cost of the program, which benefited 2,530 homeowners in 2018.

The goal of the upgraded program: To counter the impact of soaring real estate values on longtime residents with fixed incomes who are under pressure to sell their homes to avoid higher city real estate tax bills, council members said.

The 9-0 vote overrode opposition from the Stoney administration led by Chief Administrative Officer Selena Cuffee-Glenn and Chief Financial Officer Lenora Reid.

At the Finance Committee last week, both Ms. Cuffee-Glenn and Ms. Reid urged the council to reconsider using extra dollars for tax relief. They said it would reduce the funds available for paving streets, public safety and other city needs.

Along with Finance Director John B. Wack, the city’s two top administrators also indicated that extra staff likely would be needed to verify the financial information provided by the growing pool of applicants the expansion would generate.

The approved plan would provide 100 percent relief from real estate taxes for homeowners with incomes of $30,000 a year or below. Under the current program, 100 percent relief is available only for people with incomes of $20,000 a year or below.

The change is expected to benefit more than 730 homeowners with annual incomes between $20,001 and $30,000 a year who currently get 70 percent relief, but still must pay 30 percent of the tax bill.

Council’s vote also will boost tax relief for those with annual incomes of $30,001 to $40,000 to 75 percent of the tax bill, up from the current 35 percent relief. It also would increase relief for those with annual incomes of $40,001 to $50,000 to 50 percent of the tax bill, up from the current 35 percent relief.

For the first time, council also agreed to provide 25 percent tax relief for homeowners with higher annual incomes, $50,001 to $60,000.

Those affected would have until March 31, 2020, to apply to the city’s Finance Department under the upgraded program, which also allows those who qualify to receive free trash collection and recycling pickup, which now costs $21 a month.

Mr. Wack said there is no way to predict how many applications the revamped program would attract, but he forecast that the cost of the upgraded tax relief could add between $750,000 to $1 million to the cost of the program. This year, City Hall budgeted $3.4 million for tax relief due to rising valuations of residences.

Meanwhile, City Council also took action on the city’s former Seven Hills Nursing Home at 1900 Cool Lane. The failing nursing home that served some of the poorest elderly people in the city was closed in 2008 after then-Mayor L. Douglas Wilder and the council approved the sale of the bed rights to a developer planning a new nursing home in Hanover County.

Since then, the city has fended off purchase offers from Virginia Supportive Housing and others, while insisting it had plans for reusing the building possibly for an employment and job training center. But nothing ever materialized, and the building continued to decay.

The city finally dropped its objections and embraced the latest proposal that Virginia Supportive Housing submitted in October that also had the support of the Henrico County government.

The housing group, which operates 17 low-income rental communities, including several in Richmond, indicated it could take until January 2021 to assemble the financing and begin construction on a project to serve people and families with incomes of 50 percent or less of the area’s median incomes and provide them with supportive services through partnerships with nearby churches and other community groups.

Housing for individuals and families with little income will be beneficial, the nonprofit noted in pitching the city. “It costs a community $31,000 a year for a chronically homeless person to be homeless,” Virginia Supportive Housing noted, but that cost drops to $10,000 a year “to provide this same individual with permanent supportive housing.”

In other action, the council:

• Cleared the administration to use the already budgeted $517,000 to revamp salaries of some employees whose pay is below levels recommended in a wage study;

• Authorized the Richmond Police Department to provide $45,581 to city schools to cover the cost of hiring two additional crossing guards to help students cross streets in going to and from their schools. The move is the first step in turning the crossing guard program over to Richmond Public Schools on July 1. The Police Department currently employs five crossing guards and has two vacant positions, with the two new positions boosting the total to nine authorized people;

• Approved the purchase of the former home of Price Automotive Service at 1617 Brook Road to house the parking program and its 51 employees, who now work out of a tiny office space at 101 N. 6th St.; and

• Agreed to rezone two industrial properties in the 1800 block East Franklin Street to open the door for redevelopment of the buildings into apartments and retail space.