THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, December 7, 1995 TAG: 9512070001
SECTION: FRONT PAGE: A16 EDITION: FINAL
TYPE: Editorial
LENGTH: Medium: 68 lines
At the 8th Annual Governor's Conference on Housing recently in Hampton, Gov. George F. Allen proposed a savings program to help as many as 10,000 low-income families accumulate up to $10,000 apiece over five years, with help from churches, businesses and individuals.
The money could be used to buy a house, launch a business or pay for education.
The program, if enacted by the legislature next year, would put Virginia at the forefront of a national trend toward encouraging savings by low-income people.
The National Congress of Black Churches and the national nonprofit Corporation for Enterprise Development both support Virginia's proposed plan, called the Family Savings Initiative.
In his speech at the housing conference, Governor Allen said, ``Our administration's strong support for home-ownership derives from our principled belief that assets and ownership are an effective way to build a better future for Virginia families and communities. By helping more citizens to have a stake in their communities, we can help revitalize neighborhoods, reduce crime, increase opportunities and strengthen families.'' He's right.
As David Caprara, director of the Virginia Department of Housing and Community Development, explained the program, a family with an annual income less than about $29,000 would be eligible. The family could save up to $1,200 a year for five years. That money and the interest it earned would not be taxed by the state. The U.S. Congress is considering bills that would also free the savings and interest from federal taxation.
An individual, business or nonprofit organization could donate up to $600 in matching contributions - bringing the total annual savings to $1,800. There would be a state tax credit for half of the matching contribution - not a deduction, a credit. So if a caring individual contributed $600, the individual's state taxes would be reduced by $300. A church, or a few members of its congregation, might adopt a low-income family and help it make financial headway in a tough world.
More good news was announced at the conference. The Virginia Housing Development Authority, the state agency that issues bonds for affordable housing, has a long record of good management. Its Standard & Poor's bond rating is Double A - higher than any other state housing authority's. Therefore the agency expects to be able to sell taxable bonds for single-family home ownership for the first time: $467.5 million in the 1997-98 biennium. Coupled with $899 million in housing-authority tax-exempt bonds for the same biennium, that money is expected to provide low-interest mortgage money for 15,000 homes for low-income first-time homebuyers and rental assistance in 8,000 affordable apartments. The rare ability to sell taxable bonds will increase by 40 percent the money available for affordable housing, Caprara said. The housing conference in Hampton was marked by a spirit of bipartisanship - something unusual these days. Allen praised a Democrat, saying, ``Del. Alan Diamonstein and members of the Virginia Housing Study Commission, your continued leadership and bipartisan commitment have made Virginia the national leader in affordable housing.'' If ever a cause deserved bipartisan support, it is affordable housing. A 1994 ``needs assessment'' conducted by The Planning Council for United Way of South Hampton Roads ranked affordable housing near the top of its list of residents' concerns. There is something about signing a 30-year mortgage that makes a person think, ``I better be responsible now.'' The more people who own homes, the better society will be. The Family Savings Initiative deserves strong legislative support and is expected to get it. by CNB