Henrico to create trust to enhance access to affordable homeownership

Trust will be established at $60 million, supported with dedicated revenue stream

Henrico County will establish an affordable housing trust with $60 million in cash and a dedicated revenue stream from new economic development, transforming local efforts to make homeownership possible for more of the area’s workforce.

“Using our affordable housing trust, Henrico County will work with partners to buy buildable lots in communities throughout the county to create homes that will be affordable today, tomorrow and forever,” said Board of Supervisors Chairman Tyrone E. Nelson, of the Varina District. “This is another example of Henrico County’s strong leadership on a tough issue. It shows we’re committed to working with partners in the private and nonprofit sectors to fulfill our vision for One Henrico – a place that welcomes, values and supports everybody.”

Officials announced plans for the trust in broad terms today, describing the high costs of housing as a crisis that threatens Henrico’s continued prosperity and quality of life. Home costs have skyrocketed over the past four years due to a combination of demand outstripping supply and elevated interest rates. As a result, the household income needed to afford a home in Virginia has increased by 76%, and the median price of a home in Henrico jumped to $355,000 in 2023 – an amount that would be affordable for less than one-third of the county’s households, County Manager John A. Vithoulkas said.

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“The American dream of homeownership is falling out of reach for many,” he said. “This is unacceptable, unsustainable and – quite frankly – a threat to our quality of life.”

Henrico’s affordable housing trust will be supported with unbudgeted revenues from data centers, which represent one of the county’s fastest-growing business sectors. The Board of Supervisors is expected to make the first appropriation of funds available for the trust beginning July 1.

As envisioned, the trust will provide grants to nonprofit and for-profit entities to offset the costs of residential lots in subdivisions or other developments that meet program requirements. The initiative will be managed by the county with the nonprofit Partnership for Housing Affordability. Henrico has used the same model to create affordable homes in several planned or existing communities. They include 14 homes in the River East subdivision, 20 in the Arcadia community and 12 at various infill sites.

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Under the land trust model, the trust retains ownership of the lot, even after the home is built and sold to an eligible buyer. That significantly lowers the homeowner’s monthly mortgage costs. Ownership of the lot also remains with the trust through subsequent sales of the dwelling, ensuring the property remains affordable in perpetuity. Each owner and the trust share in the equity that their combined investments earn over time.

To further limit the costs of homes in the program, Henrico will waive its fees for water and sewer connections as well as building permits. The county also will expedite its planning review of proposed developments that include affordable units.

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“Henrico County and the Board of Supervisors have devoted considerable energy and resources to expanding access to affordable homeownership and improving the quality of affordable housing generally in our community,” Nelson said. “The creation of a trust that is funded through our success in attracting business investment represents a logical next step. We’ve outlined a fiscally sound strategy that uses unbudgeted cash – not additional debt or higher taxes – to help improve the lives of many in our workforce, including often unheralded frontline workers in hotels, restaurants and other businesses. By giving them an opportunity to build wealth through homeownership, we’ll also help lift their families for generations to come.”

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May 16, 2024 Press Conference
 
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