On Tuesday evening, the City Council approved a series of proposals designed to expand Alexandria's housing production, improve affordability and address past and current barriers to equitable housing access. You can watch the full City Council discussion and votes beginning at the 2:45:00 point of the video.

These actions are the culmination of a year of engagement with residents around our City. Whether you have been supportive of the City's effort or have been generally skeptical of our approach, your input in this process has been valuable. In an effort to be fully responsive to the input we have received, our staff has posted the specific input and their responses to the input on our website.

We began this effort a year ago, with great ambition and high-minded language. We ended up with a modest package of reforms that removed barriers to the creation of a diversity of housing types, informed by deep analysis of infrastructure requirements and the history that has shaped housing access in Alexandria for generations. I believe these reforms will move our community forward, improve accessibility and protect the quality of life we cherish.

It is important to acknowledge that these proposals deeply divided our City, attracting passionate advocacy and passionate opposition. Housing is personal, and we view these decisions through the lens of our personal experiences. I am hopeful that as we move forward, we can improve dialogue on this issue. Housing will continue to be an issue that requires policy evolution in our community. We must build more common ground.

Three months ago, our staff formally presented the specific proposals in a joint worksession with the Planning Commission. You can watch the full joint work session, including our Planning Director's presentation online.

The specific land-use proposals made by our staff address these areas:

• Single-Family Zoning
• Removal of Restrictive/Exclusionary barriers from the zoning code
• Bonus Height
• Expanded Transit-Oriented Growth
• Industrial Zones
• Coordinated Development Districts (CDDs)
• Inclusionary Zoning
• Townhouse Zoning 
• Property Conversions
• Expansion of the Residential Multi-Family Zone (RMF)

This effort is prompted by an urgent reality: Alexandria has become largely inaccessible to those of low and moderate incomes.

In all likelihood, next year Alexandria's housing stock will reach a important, albeit largely psychological, milestone: The average single-family home in our City will be valued at $1 million.

So far this year, 8 newly-constructed detached single-family homes have been sold in our City. The average sales price was $2.1 million, with the lowest price at $1.9 million.

With two-third's of Virginia homeowners' mortgage rates under 4% and another third with a rate under 3%, low supply and astronomical sales prices has made homeownership all but impossible in Alexandria for anyone but the upper-middle class.

The average 1 bedroom apartment now rents for $2,186 per month, requiring a salary of nearly $90,000 to afford renting a small apartment in our City.

It is benign neglect, coupled with policy inaction, that leads to a community that rapidly becomes inaccessible to the diversity of people who have made Alexandria their home for generations. That inaction stifles economic growth as employers hopelessly chase a workforce disappearing from our community.

You can watch my comments at our kick-off event at the beginning of the year, and leading into presentations from Richard and Leah Rothstein, the authors of the recently released book, "Just Action,' a follow-up to Richard Rothstein's seminal tome "The Color of Law."

All of the sessions have been recorded and are viewable online.

While this effort has a pair of motivations, a foundational acknowledgement is that for much of the 20th Century, wide swaths of Alexandria housing was off-limits to Alexandrians that were not white. That reality was enforced by a patchwork of ordinances, restrictive covenants, intimidation and lending practices that served to effectively segregate our City for generations. While de jure policies that explicitly enforced segregation were made illegal long ago, the legacy of these policies live on today. In fact, in recent years, Alexandria has grown MORE segregated. These realties are detailed in the Draft Regional Fair Housing Plan that I wrote about a few months ago. This plan was formally received by the City Council recently.

The question before our community is what can be done about it. It was generations of intentional acts that led to our current reality. It will require intentional acts to change it.

In September of 2019, the Board of Directors of the Metropolitan Washington Council of Governments (COG) unanimously adopted new regional housing creation targets. This was the first-ever regional commitment to accelerate the development of housing supply as a means to address our affordability crisis. 

These targets, while voluntary, commit the City to the creation of additional units, with most of those units committed to be affordable for low to middle income households. To ensure that this housing creation does not exacerbate existing transportation challenges, most of this new housing must be located near job centers and high-capacity transportation infrastructure. 

In 2013, while adopting our Housing Master Plan, City Council had set an ambitious goal to create or preserve 2,000 affordable units by 2025. We are on track to meet this goal. In March of 2020, the City Council became the third jurisdiction in the region to endorse new housing targets in conjunction with the Metropolitan Washington Council of Governments (COG).

With the adoption of the new COG housing targets, the City has committed to an additional 11,500 housing units, with 4,250 as committed affordable or workforce housing.

The housing non-profit HAND has begun an annual report to measure the work that each jurisdiction in the region is doing to achieve our commitments. HAND recently released the annual update of this measurement. The HAND "Housing Indication Tool" report shows that Alexandria has made significant progress, with more work to do.

While there is a broad agreement in our community about the problem and the need to focus on solutions to our affordability challenges, bringing together agreement on the correct solutions to pursue is a little more challenging.

While the City's Housing Master Plan contains a variety of tools in our housing "toolbox," the options the City has are generally limited to:

1. Raising and Spending Tax Dollars: To develop and preserve housing as well as assist residents in obtaining housing.
2. Using land-use policy (zoning) to create and preserve housing

In the budget the City Council approved in May, we expanded the tax dollars we have committed annually to affordable housing. One cent from the real estate tax rate now goes to affordable housing, which generates $4.6 million annually. One percent of Alexandria's dining tax rate also goes to affordable housing, yielding another $4.9 million annually. Together this generates $9.5 million of annual revenue that is used to fund the creation and preservation of committed affordable housing, with an aggressive project pipeline planned years in advance.

This year has been very busy in putting those resources to work:

• In October, we broke ground on "Sansé and Naja," a new affordable housing development being built by the Alexandria Housing Development Corporation (AHDC), the City's housing non-profit developer. This is the site of a former Safeway and an office building bought by the City 2 decades ago, demolished and used as a parking lot as an interim use. This is the largest-ever City affordable housing development and it will include 474 units of committed affordable housing, including many deeply affordable units.
• In September of last year, we gathered at the corner of King and Menokin to celebrate the opening of "The Waypoint at Fairlington." This partnership with Wesley Housing and Fairllngton Presbyterian Church created 81 new units of committed affordable housing where there used to be an asphalt parking lot.
• A year ago, City Council approved an application for the construction of 94 units of committed affordable housing on the site of a car dealership at 2712 Duke Street. This project is being proposed by Community Housing Partners, a housing non-profit based in Christiansburg.
• In February, the City Council approved the redevelopment of the Samuel Madden Homes. Samuel Madden is currently a 66-unit public housing development owned by the Alexandria Redevelopment and Housing Authority (ARHA). This redevelopment will replace this property with 532 total units, 326 of which will be committed affordable units and 206 market-rate units.
• Last year, the City' Council approved an application by another housing non-profit, Wesley Housing Development Corporation, to build 373 committed affordable housing units at Parcview on Holmes Run Parkway.
• In December of last year, the City Council unanimously approved a separate proposal by AHDC to develop 36 affordable homeownership units (31 townhomes and 5 condominiums) and 3 flats to be operated by Sheltered Homes of Alexandria for 12 residents. This project is located on Seminary Road just east of the City's Fire Station.
• Earlier this year, the City Council approved an application from Community Lodgings, an Alexandria non-profit, to redevelop an existing 28-apartment affordable housing complex into a new 91-unit affordable-housing development.
• Last year, Wesley Housing used resources from Amazon's Housing Equity Fund and a loan from Housing Partnership Fund, to purchase 66 private units in Arlandria and preserve them as affordable, with future redevelopment plans to come.
• Early next year, the City Council will consider a proposal for redevelopment of the Ladrey High Rise, another ARHA property. The current Ladrey is 170 units of committed affordable units, affordable for those at 30% of Area Median Income (AMI). The new Ladrey would be 275 units of committed affordable units, with 170 remaining for those at 30% of AMI, joining 27 new units affordable for those at 60% of AMI and 78 new units for those at 80% of AMI. 

During the summer, the City was awarded a grant of $60,000 from the Metropolitan Washington Council of Governments, funded by Amazon's Housing Equity Fund, to explore two possible affordable housing developments, one on the site of the Van Dorn Metro station and another on property owned by WMATA next to their new office building which just opened last week in Carlyle.

Yet, the City cannot raise and spend enough money to make an appreciable impact on this problem. The City's power to determine how land is used, our land-use authority, provides a critical tool to spur the creation and preservation of both committed affordable housing as well as market-rate housing. Said another way: building additional housing supply, whether committed as affordable housing or market-rate housing, helps address our housing affordability challenges and reverse generational impacts.

The City will continue to seek creative partnerships, new land-use tools and innovative financing to preserve and create affordability in our City. This week, we took an important step forward in that effort.

Bond Rating Renewed

At the end of October, I joined our City Manager, our Finance Director, our Planning & Zoning Director, and City staff to make our annual presentation to the bond rating agencies in New York.

Last month, S & P Global Ratings and Moody's Investor Services both reaffirmed the City's bond ratings of AAA and Aaa respectively. The confirmation of these ratings, in advance of the issuance of new bonds, allows the City to access the lowest possible borrowing costs, saving the taxpayers millions over the life of our bonds. These bonds will be used to finance the new MacArthur Elementary School, the new Minnie Howard School, and the infrastructure associated with redevelopment of the Landmark Mall site.

Shortly, the City will issue $258 million of tax-exempt bonds using a competitive bidding process.

Much like individuals must have a credit check performed before acquiring a mortgage, a car loan, or a new credit card, the City must go before Standard & Poor's and Moody's to have the two organizations assess whether we are doing a good job managing the City's finances. 

In May, the Council adopted our 10 year Capital Improvement Program, covering fiscal years 2024 - 2033. Over the 10 year period, the program calls for $2.41 billion in capital investment throughout the City. Nearly 40% of this funding goes to City and School municipal facilities.

Our capital budget is funded primarily through a mix of debt and current year funding also known as "cash capital." Relating this to your home mortgage, the cash capital is the down payment. We also pay interest each year on the debt that was issued in previous years.    

In issuing the City's rating, Moody's cited Alexandria's "healthy financial position given strong operating trends and conservative budgeting practices and that the sizeable tax base will continue to grow and diversify."

Standard & Poor's similarly cited Alexandria's "Very strong financial management policies and practices, including detailed reserve, debt, and investment policies and robust long-term financial and capital planning, and an experienced team that proactively manages the City's economy, finances, and environmental, social and governance risks.."

Over the past few years, I have pushed for new policies to make the City's balance sheet even stronger. Nine years ago, the Council unanimously adopted a new "cash capital" policy, which served to reduce debt levels and the risk of our borrowing. 

A little over 4 years ago, the Council approved amendments to our "Spendable Fund Balance," essentially expanding the amount of reserves we have available. This policy was recommended by the City's Budget and Fiscal Affairs Advisory Committee, and it has been specifically cited by the rating agencies in support of our ratings. 

Alexandria is very conservative with our use of debt.  

Arlington County limits its debt to 4% of its Fair Market Real Property Value. Both Fairfax and Prince William Counties limit their debt to 3%. Alexandria's self-imposed limit is 2.5%, and this budget year we achieved 1.8%.  

The median for other similarly rated and sized jurisdictions is 2.42%. 

Debt is a tool that allows us to balance the costs of large capital investments across the generations of Alexandria taxpayers that will benefit from them and to pay for our investments from the returns we reap from them.

It is important for us to maintain the careful stewardship that will protect our taxpayers and our City's infrastructure long into the future. 

Budget Update

In three months our City Manager will present the proposed Operating Budget for Fiscal Year 2025 (July 1, 2024 - June 30, 2025) and the proposed Capital Improvement Program (CIP) for Fiscal Year 2025 through Fiscal Year 2034.

The most important decision the City Council makes each year is the adoption of the annual operating budget and capital improvement program. The operating budget generally funds the on-going costs of government (primarily personnel), while the capital budget funds one-time expenditures that provide the community with an asset (new schools, new roads, new playing fields, transit buses, etc). 

The upcoming budget will be proposed and adopted in an uncertain environment, with impacts in the real estate market driven by higher interest rates, and where we continue to see inflation impacting the cost of talent and raw materials, two things local governments buy in large quantities. 

Last month, the City Manager presented his initial outlook for the upcoming budget to our annual Council retreat.

In Virginia, the structure of municipal finance is heavily reliant on real estate taxes. Consequentially, in Alexandria the real estate market, both residential and commercial, dictates our budgetary fate. After seeing the healthiest growth in our real estate tax base in over 15 years, last year we saw slowing. For 2024, we are expecting further slowing as the impact of mortgage rates more than doubling is affecting our real estate market.

Real estate tax revenues are currently projected to grow by 2.4%, which would be a return to the anemic growth that has characterized much of the last decade and a half. After a pandemic-driven aberration with higher than expected vehicle prices, our staff is now projecting that vehicle personal property tax revenues will return to normal with a modest 1% increase next year.

Yet on the expenditure side of the ledger, we are seeing increases in costs across our balance sheet, driven by new costs for cash capital and debt service to support City and School capital investments, new investments to support student enrollment growth, the costs of regional and local transit services and the impacts of new collective bargaining agreements for our City employees.

With these revenue estimates and expenditure estimates, this brings us to a projected revenue shortfall of $19 million.

Given that our local budget must be balanced, that shortfall must be resolved with either spending reductions, tax increases or some combination of the two.

To formally commence that process, the City Council adopted our annual budget guidance for the City Manager. Given the considerable uncertainty, the adopted guidance asks the City Manager to propose his budget without a tax rate increase, as well as a scenario that includes a rate increase.

This will be a challenging environment to adopt a budget within. With our residential taxpayers already paying more this year due to the appreciation in our residential tax base, I believe we should again work to avoid a rate increase while protecting the core services our residents depend on. Last year was the 7th budget in a row without a tax rate increase and I am hopeful we can continue that pattern.

The City Manager's budget presentation is on February 27th.

Student Enrollment Update

This year, 16,071 students started in the Alexandria City Public Schools (ACPS). That constitutes an increase of 594 students from the previous year and the second year of increasing enrollment in the aftermath of the pandemic.

As we return to student enrollment growth, we have seen enrollment increases in 15 of the last 17 years. During that period, ACPS added just under 6,000 additional students. The last time we approached having this many children attending our schools was over 50 years ago in the early 1970s.

The enrollment growth post-pandemic remains uneven. This year, we saw strong growth in middle school enrollment, tiny growth in high-school and a small drop in elementary enrollment.

Over nine years ago, the City convened the Joint Long Range Educational Facilities Work Group. The group was given the essential charge to understand our recent increase in student enrollment, better project enrollment growth in the future, and to decide what to do about it. 

One of the products of this joint effort was a new enrollment projection methodology. This methodology uses the birth rate and corresponding Kindergarten capture rate, the cohort survival rate and the impacts of new development to project student enrollment each year. This methodology has been very accurate in predicting how our student enrollment will grow over the past decade.

The April update of our enrollment projections showed that without the impact of planned development and growth, school enrollment is expected to peak in two years and then slowly decline. When the impact of planned development is included, the enrollment is projected to dip, but later return to pre-pandemic levels within a decade.

We have also worked to understand where the enrollment is coming from. The type and age of housing is a significant determinant of the student generation rates. In June, we updated the student generation rates, by development type. This analysis showed some results that might be considered counterintuitive by some in our community:

• 73% of Alexandria's housing is over 30 years old
• 89% of students in the Alexandria City Public Schools live in housing that is over 30 years old
• Only 3% of ACPS students live in market-rate, multi-family housing that was built in the last 30 years
• A third of ACPS students live in low-rise apartments, with nearly all of that enrollment in apartments that are older than 30 years old

Four years ago, the City Council unanimously approved land-use modifications to allow the old Patrick Henry Elementary School building to be temporarily used a "swing-space" to facilitate a rebuild of Douglas MacArthur Elementary School. In September of 2020, the City Council unanimously approved the rebuild of MacArthur. 

A few months ago, we opened the brand-new Douglas MacArthur Elementary School on Janney's Lane!

This new 163,000 square foot building replaces the old 62,000 square foot building, accommodates 850 students and is the first NetZero public building in Alexandria.

We are in the most significant era of new school construction in our City's history.

In March of last year, we broke ground on a rebuild of Minnie Howard campus of Alexandria City High School. This will be a new 350,000 square foot facility intended to house 1,600 students. The construction is expected to take 2.5 years and will open for the opening of the 2024-2025 school year.

In July of 2021, City Council approved a request from our School Board to provide funding to support the ACPS purchase of 1703 N. Beauregard Street to be swing space for future rebuilds as well as eventually a permanent school. This building, an office building next to Ferdinand Day Elementary School, will provide an opportunity for another adaptive reuse of an under-utilized building.

In May, City Council unanimously approved a 10-year capital improvement program for the Alexandria City Public Schools including $367.2 million over the next decade. This provides the funding for both new and renovated facilities, as well as non-capacity infrastructure investments. 

This 10-year Capital Program includes rebuilds or builds of:

• Cora Kelly Elementary School
• George Mason Elementary School
• Minnie Howard Campus of our High School
• Renovation of 1703 N. Beauregard

Five years ago, ACPS opened the first "net-new" school building in nearly two decades with the opening of Ferdinand T. Day Elementary School on the West End. Almost five years ago, ACPS opened the newly rebuilt Patrick Henry K-8 School. Both of these new buildings added badly needed capacity in areas of the City with rapidly growing enrollment. 

While capacity will remain the focus of the investments we must make in our school facilities, we have seen far too many examples of the dangers of systemic under-investment in our school facilities. Returning our school facilities to a state of good repair while sustaining a preventative maintenance cycle must be a priority of our collective investment. There can be no excuse for poorly maintained learning environments for our children. 

The Superintendent has now proposed her Capital Improvement Program covering Fiscal Year 2025 through 2034. The School Board is now working to consider this proposal before formalizing this request to the City Council.

While the pandemic paused a decade and a half of enrollment growth, it can be assumed that we are returning to our growth trend as our schools continue return to "normal." These long-term investments become critical to support the success of our students in the generations to come.

New City Attorney

There are only four employees that work directly for the Alexandria City Council, the City Manager, City Clerk, City Attorney, and our Independent Policing Auditor.

The remainder of our City staff report to one of those four individuals. When there is a vacancy in one of those positions, the Council leads a selection process as a body to choose the right person to help lead our City forward.

In June, our current City Attorney, Joanna Anderson, announced her intention to retire at the end of this year. While we are very disappointed to see Joanna leave the City, we wish her well as she enters this next phase of her life.

Last month, the City Council concluded our hiring process with the selection of Cheran Cordell Ivery as Alexandria's new City Attorney. Ms. Ivery is currently serving as the City Attorney for the City of Hampton, Virginia and she brings an impressive record of accomplishment in public and private sector roles.

We are excited to welcome her as our new City Attorney in the New Year.

Flood Mitigation Grant Program

In 2021 the City launched our "Flood Mitigation Pilot Grant Program." This new program provides matching reimbursement grants to property owners making flood resiliency improvements. This is one of the components of our comprehensive approach to addressing the flooding that has impacted our community for decades.

In October, the City Council made two significant changes to the program to expand its reach throughout our community:

1. We have removed the requirement that property owners document past flooding. Now, all properties at risk of flooding are eligible.
2. We have allowed residential common areas (for homeowners associations and condo owner associations) to apply for grants up to $25,000.

The program provides grants to cover up to 50% of the cost of flood mitigation measures up to a maximum of $5,000 for private properties and $25,000 for common areas.

I am pleased we are expanding this program to assist property owners in making flood resiliency improvements in our City.

Beginning in 1851, a manufactured gas plant operated in Old Town near the corner of North Lee and Oronoco Streets. Known as Alexandria Town Gas, the operation created coal-derived gas for both residential and commercial uses. In 1946, the operation ceased at the site.

In the mid-1970s, the City first noticed coal-tar discharges into the Potomac River adjacent to the area of the former gas plant. Despite that, in the late 1970s, the remains of the gas plant were redeveloped into a commercial townhouse complex, that remains today.

The release of gas continued through the years from the underground legacy of the plant. In 1999 the City received communication from the United States Environmental Protection Agency (EPA) and United States Coast Guard demanding that the City address this chronic pollution source. In response, the City enrolled the site in the Voluntary Remediation Program of the Virginia Department of Environmental Quality (VDEQ). This program allows for the Commonwealth to supervise the clean-up of these types of pollution sources.

Since entering the Voluntary Remediation program, the City has spent $12 million to reduce the pollution and address the concerns cited by our environmental regulators. The urban context and modern uses of the area have made it challenging to fully remediate the pollutants.

Last month, the City entered into a settlement agreement with the Potomac Riverkeeper Network (PRKN) to further remediate the coal tar pollution into the Potomac River.

This new settlement makes new commitments in the upland area to remove the source of the pollution from the ground, upgrades the sewer pipes to prevent flow into the Potomac River, new testing to detect further pollution and a new deployment of 20,000 freshwater mussels to the river.

I am pleased that we were able to agree to this settlement agreement to address this legacy pollution source and its impact on the Potomac River.

Labor & Trades Labor Agreement

Last month, the City Council voted to commit funding to support our third public-sector collective-bargaining agreement. This new agreement is with the American Federation of State, County and Municipal Employees (AFSCME) who represents over 200 Labor and Trades employees.

The Labor and Trades employees are drawn from six different departments. These are the individuals that make our government work, including laborers, mechanics, refuse collectors and more! This new agreement provides wage increases, a bonus, and new tool and clothing allowances.

This agreement is in addition to the City's pact with the International Association of Fire Fighters (IAFF) Local 2141, who represent the firefighters, paramedics and fire marshals of the Alexandria Fire Department and our agreement with the Southern States Police Benevolent Association (SSPBA), who represent the sworn personnel of the Alexandria Police Department.

Nearly 47 years ago, the Virginia Supreme Court invalidated the collective bargaining rights of public sector employees in Virginia. At that time, 19 Virginia jurisdictions, including the City of Alexandria, had some form of collective bargaining with public sector employees.

Under legislation adopted by the Virginia General Assembly during the 2020 session, localities in Virginia can again allow their employees to collectively bargain on the conditions of their employment. Alexandria led the Commonwealth with the first and second agreements under this new authority.

While both sides did not get everything they wanted in in all of these agreements, I believe we have set a solid foundation for cooperation over the coming years.

I look forward to similarly constructive relationships with the organizations that our remaining public-sector employees have or will select to represent them.

Cut-Through Traffic

Next week, the City is hosting a public meeting on Thursday night to discuss potential configurations at Duke Street and West Taylor Run Parkway. Our staff has prepared five different options for the community to provide feedback on.

Two years ago, the City Council finalized the latest update of our Alexandria Mobility Plan. During the outreach phase of that update, one of the most consistent areas of input we received were concerns about the impacts of congestion on quality of life. 

The data collection that was performed for the Central Alexandria Traffic Study revealed that relatively small number of residential streets were carrying inordinate amounts of "cut-through" traffic, mostly using those streets to access the Telegraph interchange with the Beltway. 

In response to input from the Central Alexandria Study, the City implemented a variety of mitigation efforts to reduce neighborhood cut-through and work to keep heavy volumes of traffic on the highways and arterial roads.

As traffic volumes returned in the wake of the pandemic, it was clear that more was necessary.

After work with civic associations, our staff proposed new mitigation efforts to reduce some neighborhood cut-through traffic.

The first pilot was implemented in the first quarter of 2022 and changed light timings on Quaker and Duke, as well as on side streets, to focus traffic volumes on the arterial roads.

The second pilot began in August of last year and limited access from West Taylor Run Parkway to Telegraph Road.

Our commitment during this pilot was to assess the impact, collect data and engage with the community to ensure these changes achieve the results they are designed to create.

Analysis of the traffic data proved compelling:

• Quaker Lane volume increased by 39%
• West Taylor Run Parkway volume decreased by 54%
• Cambridge Road volume decreased by 48%
• Yale Drive volume decreased by 76%
• Fort Williams Parkway volume decreased by 47%

With this success, our staff returned to our Traffic and Parking Board earlier this year with a recommendation that this pilot become permanent.

I'm pleased to continue this successful effort at improving the quality of life of our neighborhoods by focusing commuting traffic on the arterial roads of our City. I am looking forward to further discussion as we work to configure the intersections in the corridor.

Alexandria's annual leaf collection began last month and will continue into January! Crews are now on the second pass for most streets in the City. Check online to learn your collection date.

Leaf vacuuming will proceed to each of the designated zones beginning on the scheduled dates. Each zone will take several days to complete.

Additionally, the City is making up to 15 leaf bags available for each residential household. The bags can be picked up at City Hall, the City's self-service shed at the corner of Roth and Business Center Drive or at Charles Houston, Chinquapin, Patrick Henry or Mount Vernon Recreation Centers.

These leaf bags can be placed out for collection on your regulation collection day.