Dedicated Funding for Housing in Alexandria

Alexandria Economic Development Partnership

On May 3, Alexandria City Council adopted their FY19 budget which included a dedicated source of revenue for affordable housing development. The revenue will come from a 1% increase in the meals tax from 4% to 5%, providing approximately $5 million annually. Combined with developer contributions and loan repayments to the Housing Opportunity Fund, this measure will ensure that an annual, stable source of revenue is available.

Given tight budgets and the competing priorities of education, transportation and safety issues that local governments juggle to address, how were housing advocates able to secure this dedicated funding? A few takeaways from the Alexandria experience may be helpful for other jurisdictions seeking more resources for housing in their communities.

Political Leadership. While there was support for affordable housing among all of the Council members, Councilman Willie Bailey who introduced the proposal for a meals tax increase, was an early and ardent proponent of dedicated funding. His leadership provided key support at the ‘grass-tops’ level.

Information Campaign. NVAHA’S Housing Alexandria coalition developed a one-page flyer on the meals tax increase proposal, highlighting the loss of affordable housing units and the importance of city investment. The flyer was shared with community organizations and their networks, and faith communities to disseminate information quickly and provide common talking points and action steps for advocates and supporters. 

Building Community Support. The loss of over 90% of the city’s affordable housing stock since 2000 was the reality check that the housing crisis is real. Knowing that housing developments in the pipeline might not take place without expanding the resources in the housing fund added to the sense of urgency. Given the proposal from Councilman Bailey, this was the time to build a strong ‘grassroots’ campaign to secure dedicated funding. That included an extensive letter-writing campaign, meetings with Council members and opinion pieces in the local press.

While the tax increase was adopted, this analysis would not be complete without mentioning the late, last minute rush by members of the restaurant industry who claimed that they had no advance warning of this proposal, and that the tax increase would erode already slim profit margins and result in fewer patrons dining in the city. But consider this example: on a $12 breakfast there will be an additional 12 cent charge; on a $25 lunch there will be an additional 25 cent charge; and on an $80 dinner, there will be an additional 80 cent charge.

The larger lesson for advocates is that residents in the City of Alexandria can support critical funding to increase affordable housing AND a vibrant, thriving restaurant industry – the two are not mutually exclusive. And now, restaurant staff may actually have opportunities to live in the city where they work. That’s a win-win for everyone.