A prominent local Democrat is threatening to sue the City of Waynesboro over the decision by Waynesboro City Council this week to approve a $500,000 grant for a local affordable-housing project that, of note here, has the support of our local Republican member of the Virginia House of Delegates.
Politics, the saying goes, can make for strange bedfellows.
And here, this one is not a good look on our Ds.
“If City Council does not change its decision and does authorize this $500,000 donation to EDC, I intend to sue the City in Circuit Court to attempt to cancel this donation and to recoup any of the funds that have been disbursed,” Mary McDermott, a retired telecommunications attorney and former senior executive at Lumos Networks, informed the city in a letter dated April 15.
McDermott made the demand public in our AFP comment section on Thursday.
I reached out to McDermott to ask her to detail the basis of her threatened suit to block the $500,000 city grant to the 1030 Alston Court project; she declined, writing me back by email:
“I have no further comment about the lawsuit.”
Background
City Council voted 5-0 on Monday night to approve a resolution authorizing the $500,000 grant to the $36 million project being led by Enterprise Community Development, a subsidiary of the Columbia, Md.,-based nonprofit Enterprise Community Partners.
Enterprise Community Development bills itself on its website as “one of the largest nonprofit owners and developers of affordable homes in the Mid-Atlantic” and “the sixth-largest nonprofit affordable housing provider in the U.S., serving over 23,500 residents.”
The ECD project in Waynesboro is leveraging private financing and local, state and federal grants to build 96 housing units – all 96 going to households at or below 80 percent of the area’s annual median household income, which, per the most recent U.S. Census data, is at $59,994.
Diving down:
- 8 units will be set aside for families making less than 30 percent of the local median income ($17,998 a year in household income).
- 22 more will be set aside for families between 30 and 50 percent of the local median income (between $17,998 and $29,997 a year in household income).
- 53 will be set aside for families between 50 and 60 percent of the local median income (between $29,997 and $35,996 a year in household income).
- 13 will be set aside for families between 60 percent and 80 percent of the local median income (between $35,996 and $47,995 a year in household income).
The need
This project alone won’t solve all of our problems with our local shortage of affordable housing, but it keeps the chains moving.
The housing issue in Waynesboro is a function of the tightness of the local rental market: a 2023 analysis completed by the Virginia Tech Center for Housing Research puts the rental vacancy rate at a miniscule 1.8 percent, which you would define as a seller’s market – with low inventories, property owners can essentially name their price.
ICYMI
The dynamic in Waynesboro is akin to our own Tale of Two Cities – we’re seeing rapid development of high-dollar rental and single-family options in the Rosser Avenue/Interstate 64 corridor to accommodate our growing population of residents who work in the Charlottesville-Albemarle area; and not much going on, for probably obvious reasons, to try to service lower-income housing needs.
I’m not casting aspersions there in that analysis – private dollars are going to go where the money is, and the money to be made is in catering to the desires of those who have money to spend.
If you’re a private business, you have a fiduciary responsibility to make as much money as possible.
It’s not a mystery that the solution to the shortage of affordable housing is to engage nonprofit developers whose niche is leveraging private and public dollars to get the ends toward serving lower-income families to meet.
Local, state government role in 1030 Alston Court
Enterprise Community Development was approved for a $4.4 million loan for the 1030 Alston Court project from the Affordable and Special Needs Housing program, administered by the Virginia Department of Housing and Community Development, in December.
The Alston Court project also received a $560,000 grant in July that will be administered through the Central Shenandoah Planning District Commission.
ICYMI
- Affordable housing projects in Virginia get boost with $150M in financing
- Waynesboro, Harrisonburg projects receive grant funding for affordable housing development
From the text of McDermott’s message to the city threatening to sue, her issue is that the city is structuring the $500,000 as “a donation” – that’s how she termed it; I’ve been terming it what it is, “a grant” – and not a loan.
She wrote me by email that she “would have absolutely no problem making a loan to EDC,” suggesting that her issue is more political than legal – that she doesn’t like how the city is participating in the funding of the project, not that it is participating in the funding of the project.
That would seem, to me, to be inside baseball for McDermott to take up with the individual members of the City Council, whose job as elected representatives is to make those calls.
From a look at her activity on the Virginia Department of Elections and Federal Elections Commission websites, McDermott is willing to spend money to help get candidates elected to public office.
If she doesn’t like the way they did things here, she can prop up a slate of candidates that see things her way.
This is how politics works in our modern America; it’s bought and paid for by people who have money.
Note here: the makeup of the Waynesboro City Council is currently 3-2 in favor of the center-left political persuasion.
McDermott, as noted above, is a Democrat.
Her fellow Ds sitting on the City Council don’t agree with her that the city should structure its participation in the 1030 Alston Court project as a loan.
The solution isn’t to sue the city and to risk blocking the project from getting to groundbreaking.
Curveball
Fun part to this story: the odd political bedfellows aspect to this may have never come to light if the Ds in Richmond could have come to an agreement on a two-year state budget on time.
Del. Ellen McLaughlin, a Waynesboro Republican who represents the local area in the House of Delegates, submitted a budget amendment earlier this year to fund a $750,000 state grant to 1030 Alston Court.
The $750,000 figure is what ECD has identified as a funding gap that needs to be closed, citing:
- a freeze in federal Greenhouse Gas Reduction Funds.
- new federal Build America Buy America requirements that require sourcing construction materials domestically as a condition of the project receiving state funds through the Affordable and Special Needs Housing
An aide in McLaughlin’s office told me that the delegate is hopeful that the amendment will make it into the final two-year state budget.
Legislators are due back in Richmond next week to try to wrap things up on the budget.
Should that money be approved at the state level, that will factor in to what the city does going forward with the grant that City Council approved this week, according to City Manager Mike Hamp.
“One contingency will be what if other funding sources, including the one you reference, materialize,” Hamp wrote to me by email.
I’d say, it’s obvious that the City Council would withdraw its local grant approval, as the point would, by then, be moot.
Which means, if the Ds in Richmond do the right thing, local problem solved – at least as far as 1030 Alston Court is concerned.
We may have stumbled into a thicket in terms of realizing that there are fissures in the foundation of our tenuous center-left majority in city politics, but that would be another problem for another day.
Let’s just get the affordable housing done.
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Chris Graham
