Findings and Recommendations of the Residential Infrastructure Fund Work Group (Senate Document No. 5)
Summary
A report of the Virginia Department of Housing and Community Development to the General Assembly of Virginia, Senate Document No. 5 (2025), on the findings and recommendations of the Residential Infrastructure Fund Work Group (Chapter 509, 2024). The report states that the Work Group was established by SB489 (2024) to assess the feasibility of and options for establishing a Virginia residential development infrastructure fund, and that it met three times during 2024. It states that the Work Group preferred a revolving loan fund with below market rate loans, and it describes programs in other states, including Massachusetts HousingWorks and the Indiana Finance Authority program. Later sections discuss eligible expenses, prioritization and application requirements.
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“Findings and Recommendations of the Residential Infrastructure Fund Work Group (Senate Document No. 5).”
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REPORT OF THE VIRGINIA DEPARTMENT OF
HOUSING AND COMMUNITY DEVELOPMENT
Report on the Findings and
Recommendations of the
Residential Infrastructure
Fund Work Group
(Chapter 509, 2024)
TO THE GENERAL ASSEMBLY OF VIRGINIA
SENATE DOCUMENT NO. 5
COMMONWEALTH OF VIRGINIA
RICHMOND
2025
Residential Infrastructure Fund Work Group
Findings and Recommendations
Page 2
Executive Summary
The Residential Infrastructure Fund Work Group (Work Group) was established by SB489 (2024)
to assess the feasibility of and options for establishing a Virginia residential development
infrastructure fund. The Work Group met three times during 2024 to discuss the elements of
such a potential fund. The Work Group was facilitated by the Department of Housing and
Community Developed and comprised of representatives from Virginia Housing, the Virginia
Association of Counties, the Virginia Municipal League, the Virginia Association of Realtors, the
Home Builders Association of Virginia, the Virginia Resources Authority, the Virginia Department
of Health, and the Virginia Department of Energy.
The Work Group came to a general agreement on the framework of a potential residential
development infrastructure fund and associated program to administer it. The Work Group
stated that the primary purpose and objective of a potential fund should be to provide funding
to localities for the expansion of public infrastructure to increase the housing supply. The Work
Group agreed that the leading factors for determining projects to fund should be housing need
and project readiness. The Work Group debated the merits of allocating funds as grants or
loans, but ultimately preferred a revolving loan fund with below market rate loans. The Work
Group agreed that funding prioritization should be given to localities that are providing
incentives for residential development, as well as reducing local regulatory barriers.
Background
Senate Bill 489 (2024) as approved by the General Assembly and signed by the Governor,
directed the Department of Housing and Community Development (DHCD) to convene a work
group to assess the feasibility of and options for establishing a Virginia residential development
infrastructure fund. The Residential Infrastructure Fund Work Group (Work Group) was tasked
with considering:
i. whether other states have established a residential development infrastructure fund, or
similar fund, and evaluate the effectiveness and best practices used in implementing
such policy in other states;
ii. preliminary and long-term fiscal impacts of establishing and administering a Virginia
residential development infrastructure fund;
iii. options for applicant and project eligibility criteria, application review and selection
processes, funding disbursement, and other potential policies, procedures, or guidelines;
and
iv. prioritizing certain public infrastructure projects, including those that support residential
developments in localities that have implemented measures to reduce local regulatory
barriers to new development.
The legislation directed the Work Group to consist of representatives from local government
and individuals with expertise in single-family and multifamily land development and
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construction, real estate finance, infrastructure development, or other areas of expertise.
Representatives from Virginia Housing, the Virginia Association of Counties, the Virginia
Municipal League, the Virginia Association of Realtors, the Home Builders Association of
Virginia, the Virginia Resources Authority, the Virginia Department of Health, and the Virginia
Department of Energy comprised the Work Group. The Work Group met three times from
August to October of 2024, and meeting summaries from each of those meetings are appended
to this report.
Residential Infrastructure Programs in Other States
The following programs are examples of other states’ programs that fund the infrastructure
associated with residential development.
Massachusetts HousingWorks
The HousingWorks Infrastructure Program is a competitive grant to municipalities and other
public entities for a variety of infrastructure related activities to support and unlock housing
opportunities.1 This grant program awards funds based on the project’s nexus with housing,
transportation, infrastructure, and community development needs. Examples of eligible
projects include:
• Physical infrastructure improvements near public transit stations and residential
areas;
• Engineering designs for water and sewer infrastructure improvements that will
increase capacity for increased housing production;
• Improvements to physical public infrastructure near a permitted housing project
that will support and yield new and/or additional affordable housing units;
• Improvements to sidewalks, roads, or other multi-modal infrastructure to
increase safety, mobility, and accessibility in the area surrounding housing and
adjacent neighborhood(s);
• Critical upgrades to outdated water, sewer, and other infrastructure to support
housing.
The HousingWorks program began operating in 2023, and its average award amount is $2.5
million.
Indiana Finance Authority: Residential Housing Infrastructure Assistance Program
The Residential Housing Infrastructure Assistance Program provides financial assistance for
infrastructure projects that support residential development in communities that demonstrate
need for additional housing inventory based on local job growth. Funds can be used for public
infrastructure projects such as water distribution systems, water treatment plants, wastewater
treatment plants, sanitary sewer systems, storm sewer systems, lift stations, streets, roads, or
1
Massachusetts Housing Works. https://www.mass.gov/how-to/housingworks-infrastructure-program
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bridges, curbs, gutters, or sidewalks, traffic signals, streetlight, or electric or gas distribution
lines. Funds are awarded in the form of a loan. Indiana has a relevant prioritization system for
the distribution of funds that is structured as follows:
(1) The project is ready to move forward with construction within the fiscal year following
application submission
(2) The political subdivision:
a. Invested in a housing study within the last five (5) years; or
b. Had a housing study performed by a region’s local economic development
organization; or
c. Demonstrated the need for additional housing inventory as indicated by the
Indiana Housing and Community Development Authority housing dashboard
(Indiana Housing Dashboard)
(3) The political subdivision has voluntarily revised unified development ordinances, zoning
regulations, or other land development rules to allow for:
a. higher density development;
b. construction of other housing types including accessory dwelling units and
manufactured and modular housing;
c. adaptive reuse of commercial buildings for residential use; or
d. waiver or elimination of regulations (e.g., garage size, greater setbacks, off-street
parking)
(4) The political subdivision does not have impact fee ordinances
(5) The political subdivision has secured private, local, state, or federal funds to contribute
to the eligible projects
(6) The political subdivision has secured a letter of support from an employer and elected
body stipulating that the public infrastructure will support residential housing that is in
reasonable proximity to employment; or will assist:
a. homeowners to age in place through restoration or renovation of existing homes;
or
b. communities in preparing for shovel ready housing.
The Residential Housing Infrastructure Assistance Program distributed its first $51 million in
2024. 2
InvestUP Michigan: Build U.P.
The Michigan State Legislature granted $15 million to a nonprofit organization, InvestUp, for
the Build U.P. initiative to advance housing construction in the Upper Peninsula (U.P.) and part
of that funding was put towards a residential infrastructure fund. Build U.P. provides financial
assistance to local units of government in the Upper Peninsula to facilitate infrastructure
improvements leading to the construction of new residential developments in the community.
Build U.P. provides the assistance through the purchase of municipal bonds issued by local units
2
Indiana Finance Authority. https://www.in.gov/ifa/residential-housing-infrastructure-assistance-program/
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of government worth between $250,000 and $1.5 million. Eligible infrastructure is given a
broad definition but includes water and sanitary sewer, wastewater treatment and storm
sewers, road improvements, and utility placement including gas, electric and fiber lines. Eligible
infrastructure must lead to construction of redeveloped or new residential developments in
participating communities.3
Southern California Association of Governments: Regional Utilities Supporting Housing Pilot
Program (RUSH)
A competitive funding program with $35 million available, this program prioritizes funding to
infrastructure planning projects and capital projects (upgrading infrastructure for sewer, water,
stormwater, and dry utilizes systems). Awarded projects through this program support
residential housing development. This is a pilot, which just made its first awards in January
2024. Utilities refer to electric, water, stormwater, or sewer, but excludes gas or other fossil
fuels. Broadband may be included if tied to one of the other utilities identified but cannot be
the main factor.4
Montana Board of Investments: Housing Infrastructure Revolving Loan Program
Funding supports demolition or expanding or extending water, wastewater, storm water,
street, road, curb, gutter, and sidewalk infrastructure to serve new or rehabilitated residential
development. Funding is limited to projects that support residential development at a
minimum gross density of 10 units per acre and include provisions for preserving long-term
affordability of the housing. Applications are limited to approved lenders. Projects are awarded
in the form of a loan. 5
New Mexico Finance Authority: Housing Development Revolving Fund
The Housing Development Revolving Fund was created by HB195 in 2024. The program consists
of loans for the construction of workforce housing and infrastructure for affordable housing.
For-profit and non-profit entities are eligible to apply. This is a new program, and little
information is currently available.6
Wisconsin Housing and Economic Development Association: Infrastructure Access Loans
The Infrastructure Access Loans program was created by Wisconsin Assembly Bill 264 in 2023.
The program provides funding to developers and local governments to cover the cost of
installing, replacing, upgrading, or improving public infrastructure related to workforce housing
or senior housing in the form of a loan. Awarded projects must meet the affordability
requirements of 100% AMI for apartments or household income of not more than 140% AMI
3
Invest UP Michigan. https://www.investupmi.com/index.php/building-the-u-p/
4
Southern California Association of Governments. https://scag.ca.gov/post/programs-accelerate-transformative-
housing-path
5
Montana Board of Investments. https://investmentmt.com/Housing-Programs/Housing-Infrastructure-Revolving-
Loan-Program
6
New Mexico Finance Authority. https://www.nmfinance.com/opportunity-enterprise-housing-development-
revolving-fund/
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for homeowners, and homes must remain affordable for 10 years. The program contains set-
asides for different regions of the state and for small communities.7
Purpose of the Residential Infrastructure Fund
Throughout all three meetings, Work Group members emphasized that the purpose of an
infrastructure fund should be to support the development of new housing units and that
funded projects should expand the capacity of public infrastructure in order to accommodate
increases in the housing supply. The Work Group discussed whether or not limitations should be
placed on the cost, size, or type of housing associated with infrastructure projects and
concluded that there should be no restrictions. However, the Work Group stressed that projects
should meet the needs of the community, so applicants should tailor their requests towards
providing housing units at the price points, sizes, types, and locations of needed housing as
prescribed in the 2025-2029 Housing Needs Assessment developed by DHCD. Work Group
members reached a consensus that the potential fund should not place limitations on eligible
projects on the basis of the number or type of housing units they will support; when scoring
applications, the administering agency should consider the housing needs of the locality and the
extent to which a proposed project meets those enumerated needs. Work Group members also
emphasized that expansions to infrastructure capacity could serve new housing units developed
in greenfield areas, or they could serve new infill units or the rehabilitation or reuse of existing
infill units. While the Work Group discussed the possibility of tying funding to economic
development projects or prioritizing localities with large economic development projects, the
Work Group ultimately agreed that the primary criteria for a potential fund should be the
production of residential units.
Allocation of Funds
Members of the Work Group assessed whether a potential infrastructure fund would be best
administered through grants or loans. The Work Group discussed positive and negative aspects
of each funding mechanism. Grants would likely be most helpful for smaller or low-capacity
localities that may not have the capacity to administer and repay loans, as well as for localities
that are already borrowing near their debt service limits. Grants may also be better suited for
addressing point-in-time issues. Using grants, however, would require the General Assembly to
allocate annual funding to the infrastructure fund or create a dedicated funding stream.
Alternatively, the Work Group determined that an infrastructure fund could provide revolving
loans at below-market interest rates. Smaller and lower-capacity localities may be less likely to
utilize loan instruments, but a revolving loan fund would result in a more financially sustainable
program over a longer period of time. Loans may also be better suited for addressing ongoing
infrastructure issues and the provision of below-market interest rates could greatly improve the
7
Wisconsin Housing and Economic Development Association.
https://www.wheda.com/globalassets/documents/about-wheda/legislative-policies/infrastructure-access-
overview-presentation.pdf
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affordability of infrastructure projects. An example of a successful existing revolving loan fund
that was discussed is the Virginia Resources Authority (VRA)’s Virginia Airports Revolving Fund
(VARF), which was originally allocated $25 million in 2000 and has since issued loans worth
more than $110 million.8 VARF provides interest rates that are reduced 0.5% below the
prevailing market AA interest rates.
Ultimately, the majority of the Work Group preferred to create a revolving loan fund because of
the possibility of greater financial sustainability. The Work Group preferred not to set loan terms
or underwriting terms as part of any statutory language but to allow the administering agency
some flexibility to establish its own policies. Some Work Group members expressed interest in
allowing any program income received by the fund above the principal amount to be issued as
grants for smaller, low-capacity localities.
Eligible Applicants
Work Group members determined that localities, including counties, cities, and towns, should
be eligible applicants for a potential fund and that neither non-profit nor for-profit developers
should be eligible applicants. However, Work Group members expressed strong support for
public-private partnerships when considering potential projects. Work Group members stated
that eligible applicants should be able to attest to the housing needs of their community and
provide a specific narrative about how the project in question would help to provide the needed
housing units. The Work Group also supported applicants being required to provide audited
financial statements as a part of their application.
Eligible Expenses
For purposes of a potential infrastructure fund, the Work Group defined “infrastructure” quite
broadly, to contain the following:
• Water distribution system
• Water treatment plant
• Wastewater treatment system
• Sanitary sewer system
• Storm sewer system
• Stormwater sewer system
• Stormwater retention pond
• Lift or pump station
• Street and traffic improvements
• Electric or gas distribution line
8
Virginia Resources Authority. https://www.virginiaresources.gov/program/virginia-airports-revolving-fund/
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Suggested ineligible expenses would include broadband and electric vehicle charging
infrastructure. The Work Group agreed that only publicly owned infrastructure should be
eligible for a potential program. The Work Group suggested that both hard and soft costs
associated with the infrastructure project should be eligible, but administrative costs would only
be eligible expenses for the grant funding that could be made available to small and low-
capacity localities using program income.
Prioritization
The Work Group emphasized that the fund should prioritize projects that are shovel-ready and
include reasonable requirements for the project timeline. Work Group members suggested that
the funds should be drawn upon by a locality within 12 months, and projects must be
completed within five years. The Work Group suggested that funds could be released in
tranches, or large projects could apply for multiple phases of funding so that shorter timelines
could be enforced. The Work Group also emphasized prioritizing projects from localities that
have conducted adequate planning for increased housing development.
SB489 called for the Work Group to consider “prioritizing certain public infrastructure projects,
including those that support residential developments in localities that have implemented
measures to reduce local regulatory barriers to new development.” While the Work Group
agreed that reducing local regulatory barriers is an important tool to encourage further
development, Work Group members suggested broadening the scope to include localities that
are providing incentives for residential development, as well as reducing barriers. The Work
Group determined that localities should provide a narrative on their plan for increasing housing
supply, including their strategy and timelines. The Work Group determined that the following
actions should be given priority:
• Increases in density
• Allowing for low-cost home construction alternatives, such as modular, 3-D printed, and
prefabricated housing
• Allowance of conversion of office, light industrial, and commercial space to multifamily
use
• Elimination of parking minimums, restrictive setback requirements, floor area ratios,
design requirements, or other regulations that decrease development
• Provision of incentives for housing development
• Other actions that encourage the development of housing.
Work Group members agreed that considering actions localities have already taken within a
look-back period would be appropriate, as well as consideration of plans for future housing
development, as long as the locality has plans to keep regulatory changes in place for the
duration of the allocation of funding. The Work Group also stressed that the plans should
address the specific housing needs of the locality. The Work Group noted that potential funding
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should incentivize localities to take steps that will enhance their ability to meet housing needs,
but it should not prescribe a single all-purpose strategy for doing so.
Preliminary and Long-Term Fiscal Impacts
The Work Group suggested that a significant amount of funding would be necessary to make an
effective residential infrastructure fund such as the one outlined by the Work Group. However,
the Work Group noted that structuring the program as a revolving loan fund would ensure that
committed funding could be reinvested many times without additional allocations from funding
sources. The Work Group discussed the example of the VRA’s Virginia Airports Revolving Fund
which was initially allocated $25 million by the General Assembly in 2000 and has seen a
fourfold increase in investment in a little over 20 years. The Work Group noted that
infrastructure projects can cost anywhere from a few hundred thousand dollars to billions of
dollars depending on their scope. The Work Group suggested that the General Assembly should
consider the existing infrastructure needs of the Commonwealth and the typical costs of
infrastructure projects when determining how much funding to allocate to an infrastructure
fund.
Conclusion
In order to increase affordability and accommodate growth in the Commonwealth, Virginia’s
infrastructure must expand alongside its housing supply. An infrastructure fund could provide
additional financial support that localities need in order to extend public infrastructure and
reduce administrative and financial burden on housing developers, while also incentivizing
localities to reduce regulatory barriers to housing and plan ahead for growth with incentives for
development and shovel-ready projects. An effective residential infrastructure fund could be
structured as a revolving loan fund offering below-market interest rates to counties, cities, and
towns, and it could include a set-aside of grant funding that could be available to smaller, more
rural, and lower-capacity localities.
VIRGINIA ACTS OF ASSEMBLY -- 2024 SESSION
CHAPTER 509
An Act to direct the Department of Housing and Community Development to convene a work group to
assess the feasibility of and options for establishing a Virginia residential development infrastructure
fund; report.
[S 489]
Approved April 4, 2024
Be it enacted by the General Assembly of Virginia:
1. § 1. That the Department of Housing and Community Development (the Department) shall convene a
work group to assess the feasibility of and options for establishing a Virginia residential development
infrastructure fund.
The work group shall consider (i) whether other states have established a residential development
infrastructure fund, or similar fund, and evaluate the effectiveness and best practices used in
implementing such policy in other states; (ii) preliminary and long-term fiscal impacts of establishing
and administering a Virginia residential development infrastructure fund; (iii) options for applicant and
project eligibility criteria, application review and selection processes, funding disbursement, and other
potential policies, procedures, or guidelines; and (iv) prioritizing certain public infrastructure projects,
including those that support residential developments in localities that have implemented measures to
reduce local regulatory barriers to new development.
The work group shall be composed of representatives from local government and individuals with
expertise in single-family and multifamily land development and construction, real estate finance,
infrastructure development, or other areas of expertise deemed appropriate by the Department.
All agencies of the Commonwealth shall provide assistance to the Department and the work group,
upon request.
The work group shall complete its meetings by November 30, 2024, and the Department shall submit
to the Division of Legislative Automated Systems an executive summary and report of its assessment no
later than the first day of the 2025 Regular Session of the General Assembly. The executive summary
and report shall be submitted as provided in the procedures of the Division of Legislative Automated
Systems for the processing of legislative documents and reports and shall be posted on the General
Assembly's website.
Meeting Summary
Residential Infrastructure Fund Work Group
August 6, 2024
10:00 am
Virginia Housing Center
Glen Allen, VA
Work Group Members Present
Andrew Clark, Home Builders Association of Virginia
Claudia Cotton, Former Member of the Board of Housing and Community Development
Peter D’Alema, Virginia Resource Authority
Joe Flores, Virginia Municipal League
Lance Gregory, Virginia Department of Health
Callie Houghland, Virginia Department of Energy
Erin Kormann, Virginia Association of Realtors
Joe Lerch, Virginia Association of Counties
Chris Thompson, Virginia Housing
Other Attendees Present
Amy Fottrell, Virginia Department of Housing and Community Development
Trisha Lindsey, Virginia Department of Housing and Community Development
Chase Sawyer, Virginia Department of Housing and Community Development
Key Takeaways
• The Residential Infrastructure Fund Work Group (work group) expressed that
“infrastructure” should be broadly defined and that a potential fund should address
both new residential development and rehabilitation efforts.
• The work group expressed a preference for limiting project eligibility of a potential
residential infrastructure fund to projects that increase the housing supply at any price
point or income level.
• The work group considered the positives and negatives associated with both grant and
loan programs and remains open to considering either funding mechanism.
• The work group expressed support for emphasizing project readiness as a key
component to receiving funding from a potential fund.
Note: Please note the summary and notes included do not include a specific endorsement or
opinion of the committee or any one committee member.
Summary
Department of Housing and Community Development (DHCD) staff provided an overview of the
agenda, the legislation that guides the Residential Infrastructure Fund Work Group (SB489), and
research performed on other states’ programs that are similar to the program the work group is
to study. Other states’ programs included:
• Indiana Finance Authority’s Residential Housing Infrastructure Assistance Program
Residential Infrastructure Fund Work Group
August 6, 2024 Meeting
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• InvestUP Michigan’s Build U.P.
• Southern California Association of Governments’ Regional Utilities Supporting Housing
Pilot Program
• Montana Board of Investments’ Housing Infrastructure Revolving Loan Program
• New Mexico Finance Authority’s Housing Development Revolving Fund
• Wisconsin Housing and Economic Development Association’s Infrastructure Access
Loans
• Massachusetts Executive Office of Housing and Livable Communities’ HousingWorks
Infrastructure Program
• Community Development Block Grants (federal program)
• Appalachian Regional Commission (federal program)
• Southeast Crescent Regional Commission (federal program)
The work group discussed the difficulty in addressing the charge of the legislature to evaluate
the effectiveness of programs in other states because most other programs have been enacted
very recently and there has not been enough time to evaluate their effectiveness.
Other work group members who represented Virginia agencies provided additional information
on programs within their purview that also address infrastructure associated with residential
development.
The work group then discussed how to define infrastructure for the purpose of the potential
fund. There was general agreement among the work group that it was best to leave the
definition broad and to include infrastructure that serves new development, as well as
necessary infrastructure upgrades for rehabilitations and infill development. The work group
agreed that the purpose of a potential fund should be to increase housing supply, so entities
receiving funds should be able to justify that their project will produce new units or rehabilitate
units at any price point. Considering the differences between new development and
redevelopment, the work group suggested that depending on the amount of funding available
it may make sense to separate the potential fund into two pools to account for each type. The
work group agreed that the following publicly owned types of infrastructure should be eligible
uses of funds, as long as they contribute to increasing the housing supply:
• Water distribution system
• Water treatment plant
• Wastewater treatment system
• Sanitary sewer system
• Storm sewer system
• Stormwater sewer system
• Stormwater retention pond
• Lift or pump station
• Street, road, alley, or bridge
• Curb, gutter, or sidewalk
• Traffic device
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August 6, 2024 Meeting
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• Streetlight
• Electric or gas distribution line
The work group then turned to discuss whether the fund should provide grants or loans. Some
work group members expressed concerns about the debt capacity of localities, especially small
or low-capacity localities, if the funds are issued as loans. However, some work group members
suggested that a revolving loan fund could help make the fund sustainable. The work group did
not make a final decision on this question but was open to including both grants and loans as
feasible options.
The work group discussed whether, in addition to increasing housing supply, the fund should
also be more directly tied to economic development projects. The work group was in
agreement that a potential residential infrastructure fund should not be limited to housing
development projects that are being built in conjunction with major economic development
projects. However, the work group supported tracking job creation as an outcome related to a
potential fund and as a measure of success.
Finally, the work group discussed whether a potential fund should emphasize project readiness
and time to implementation. The work group agreed that housing developments can take
several years to come to the market and accompanying infrastructure can add additional years
to a project. The work group agreed to discuss specific elements of project readiness at future
work group meetings. The work group suggested that better financing terms could be an
incentive for completing the project quickly.
Future Considerations
• Financial structure of a potential fund (grants vs. Loans, financing terms, etc.)
• Measures and outcomes associated with successful projects
• Project development and application assistance for localities with limited capacity
• Additional criteria for project eligibility
• Scoring criteria and prioritization for awarding funding
Meeting Summary
Residential Infrastructure Fund Work Group
September 13, 2024
10:00 am
Virginia Housing Center
Glen Allen, VA
Work Group Members Present
Andrew Clark, Home Builders Association of Virginia
Claudia Cotton, Former Member of the Board of Housing and Community Development
Peter D’Alema, Virginia Resource Authority
Michelle Gowdy, Virginia Municipal League
Lance Gregory, Virginia Department of Health
Erin Kormann, Virginia Association of Realtors
Joe Lerch, Virginia Association of Counties
Other Attendees Present
Amy Fottrell, Virginia Department of Housing and Community Development
Chase Sawyer, Virginia Department of Housing and Community Development
Key Takeaways
• The work group agreed that localities should submit a narrative describing their plans
for increased housing development, including any local incentives they offer and
regulatory barriers they are reducing. Projects should be prioritized based on a locality’s
efforts to address housing needs, as defined in the state’s housing needs assessment.
• The work group agreed that localities should be required to provide audited financial
statements as a baseline criterion for application to the potential fund, but there should
not be other restrictions as to which localities are eligible to apply.
• The work group supported all soft and hard costs being eligible expenses and suggested
administrative expenses may be eligible in certain cases, such as for small, rural
localities with low capacity.
• The work group agreed that the potential fund should prioritize projects that are shovel
ready, and it should enforce a timeline for completion.
Note: Please note the summary and notes included do not include a specific endorsement or
opinion of the committee or any one committee member.
Summary
Department of Housing and Community Development (DHCD) staff reviewed the meeting
summary from the first meeting of the Residential Infrastructure Fund Work Group (work
group), which took place on August 6, 2024. The work group then discussed the next steps in
the development of a potential residential infrastructure fund, including applicant eligibility,
Residential Infrastructure Fund Work Group
September 13, 2024 Meeting
Page 2
eligible expenses, threshold criteria for scoring projects, regulatory barriers to housing
development which localities could address to receive priority, and implementation
requirements.
The work group continued discussions from the first meeting on topics that had unresolved
questions and points of consideration. The work group discussed whether all localities would be
eligible to apply for funding or whether there should be specific criteria that make a locality
eligible. The work group agreed that there should be no restrictions on which localities could
apply for potential funding (i.e. all localities would be eligible), however, in order to access the
funding, a locality should be able to provide audited financial statements. Some members of
the work group expressed interest in requiring changes to zoning that encourage housing
development in order to be eligible for potential funding. Work group members also expressed
support for connecting potential funding to local housing needs and population sizes.
The work group also continued discussions about eligible costs, and the work group concurred
that both hard and soft costs should be eligible expenses; however, there was some debate
amongst work group members about whether administrative costs should be an eligible cost. A
potential set-aside for planning and administration for smaller localities was discussed. The
work group also returned to the discussion about whether to structure the program as loans or
grants. Work group members noted that while grants would be preferred for some rural
localities and may be better suited for addressing point-in-time issues, loans offered at below-
market rates would promote sustainability of the fund over time and are better suited for
addressing perpetual issues. It was suggested that the work group consider structuring the
program similar to the Virginia Resource Authority’s Virginia Airports Revolving Fund, which
offers revolving loans. The work group also discussed a mixed approach by providing grants up
to a certain threshold and loans beyond that threshold.
The work group discussed whether localities that address regulatory barriers to housing
development should receive priority status for potential funding, and which regulatory barriers
should be considered. The work group determined that localities should provide a narrative on
their plan for increasing housing supply, including their strategy and timelines. The work group
determined that the following actions should be given priority in the application scoring
process:
• Increases in density
• Allowing for low-cost home construction alternatives, such as modular, 3-D printed, and
prefabricated housing
• Allowance of conversion of office, light industrial, and commercial space to multifamily
use
• Elimination of parking minimums, restrictive setback requirements, floor area ratios,
design requirements, or other regulations that decrease development
• Provision of incentives for housing development
• Other actions that encourage the development of housing.
Residential Infrastructure Fund Work Group
September 13, 2024 Meeting
Page 3
Work group members agreed that considering actions localities have already taken within a
determined look-back period would be appropriate, as well as consideration of plans for future
housing development as long as the locality has plans to keep regulatory changes in place for
the duration of the loan or grant and their plans will meet local housing needs. In the
application, there should also be consideration for existing infrastructure capacity and how
infrastructure and housing options will grow together.
Additionally, the work group discussed implementation requirements. The work group noted
that environmental, labor, and public participation requirements are already included within
the development timeline, and this fund should not necessitate additional requirements.
Instead of requirements that housing developed in conjunction with infrastructure be
affordable, the work group suggested that the housing developed should be in accordance with
the state’s housing needs assessment. The work group emphasized that the potential fund
should prioritize projects that are shovel ready and include reasonable requirements for the
project timeline. A suggestion discussed was that potential funds must be drawn on within 12
months. Work group members noted that potential funds could be released in tranches, or
large projects could apply for multiple phases of funding so that shorter timelines could be
enforced. Work group members noted that if funds are structured as a grant, then outcomes
and timelines are more important. However, if the potential funding is a loan that must be
repaid, it is less important to track measurable outcomes so long as the locality is making timely
loan payments.
Future Considerations
• Financial structure of a potential fund (grants vs. loans, financing terms, etc.)
• Preliminary and long-term fiscal impacts on the potential fund, including how much
should be allocated to the fund
• Measures and outcomes associated with successful projects
• Additional scoring criteria and prioritization for awarding funding
Meeting Summary
Residential Infrastructure Fund Work Group
October 24, 2024
10:00 am
Varina Area Public Library
Richmond, VA
Work Group Members Present
Demas Boudreaux, Virginia Housing
Andrew Clark, Home Builders Association of Virginia
Claudia Cotton, Former Member of the Board of Housing and Community Development
Peter D’Alema, Virginia Resources Authority
Joe Flores, Virginia Municipal League
Erin Kormann, Virginia Association of Realtors
Matthew Sell, Virginia Housing
Other Attendees Present
Amy Fottrell, Virginia Department of Housing and Community Development
Chase Sawyer, Virginia Department of Housing and Community Development
Key Takeaways
• Project proposals should be in alignment with the forthcoming statewide Housing Needs
Assessment so that funding is targeted towards the infrastructure that supports the
housing types most needed in a locality.
• Specifics about loan terms and underwriting should be left to the administering agency
instead of codified into statute, but the Fund should provide below market rate loans.
• There should not be a minimum loan size in the first year of the Fund.
• Projects should have a five-year timeline, with prioritization for shovel-ready projects
and those that can be completed sooner.
• Prioritization should also go to public-private partnerships, those with leveraged funds
from other sources, and localities that are reducing barriers to housing development.
Note: Please note the summary and notes included do not include a specific endorsement or
opinion of the committee or any one committee member.
Summary
At the third meeting of the Residential Infrastructure Fund Work Group (Work Group),
Department of Housing and Community Development (DHCD) staff presented a draft
framework for a potential residential infrastructure fund (Fund) based on the previous
discussions of the Work Group at the first (August 6, 2024) and second (September 13, 2024)
meetings. The Work Group proceeded to review the draft framework and suggest revisions.
In response to the draft framework, Work Group members emphasized that the primary
objective of a potential fund should be to support infrastructure projects that increase the
Residential Infrastructure Fund Work Group
October 24, 2024
Page 2
housing supply in a locality. Work Group members also stated that applications for potential
funding should be prioritized if they are part of a public-private partnership and if the project
will develop housing units at the price points and of the housing types referenced by the
statewide Housing Needs Assessment. The Work Group also discussed the importance of
ensuring that potential program related statutory language allowed for both multifamily and
single-family housing development and that both new development and infill/rehabilitation
were permitted.
The Work Group discussed the allocation of potential funds. The Work Group chose not to state
the precise rates of loans that would be available from the potential revolving loan fund and
instead recommended that the specifics be left up to the agency that ultimately administers the
Fund; however, the Work Group did want to ensure that any legislation dictates loans would be
below market rate.
The Work Group additionally discussed eligible applicants and threshold documentation
required to apply for a potential fund. The Work Group agreed that a potential fund should only
be open to localities (counties, cities, or towns), but that applications from localities should be
accompanied by documentation of a public-private partnership to develop the associated
housing units. The Work Group further discussed items that should be included in a locality’s
application, including a demonstration of need, justification that the proposed project will meet
the need, a description of the project, the type of housing units proposed, and a project
timeline. The Work Group also supported the requirement that applicants should be required to
submit current audited financial statements.
The Work Group further discussed the size of the loans and eligible costs. Work Group members
suggested that from a lender perspective, any projects under $250,000 would typically not be
considered economical. However, the Work Group agreed that there should not be a minimum
loan amount for the first year of the program; if necessary, a minimum loan amount could be
added in the second year. The Work Group members clarified that projects including multiple
types of infrastructure should be eligible and that only public infrastructure projects should be
eligible.
Finally, members of the Work Group discussed applicant prioritization and scoring criteria. The
Work Group agreed upon a five-year completion timeline for projects, with priority given to
projects that will be completed sooner. The Work Group indicated that the ability for localities
and developers to leverage other funding should be a consideration in scoring because it is a
signal of the seriousness of that locality to move forward with development. Lastly, the Work
Group agreed that a potential fund should consider in its scoring criteria the actions taken by a
locality to eliminate barriers to housing and incentive housing development.
Work Group members agreed that there was no need for a fourth meeting of the Work Group.
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