BY. Neil Williamson, President
As college basketball enters into their Final Four weekend (albeit without UVA), we see a clear lesson from the hardwood that could positively impact housing affordability in our community.
Earlier this week, in what has become an annual pilgrimage, Charlottesville and Albemarle County elected officials spoke at IMPACT’s Nehemiah Action conference. Ginny Bixby of the Daily Progress has the story:
Charlottesville and Albemarle County officials pledged support for affordable housing, climate and transportation initiatives this week but said planning and realistic expectations are important.
The officials made their comments at the IMPACT Nehemiah Action conference Tuesday evening. IMPACT is an interfaith social justice organization that pushes city and county officials to take action on social issues.
Close to 200 people gathered in person at the event at the Church of the Incarnation with about 450 people participating virtually.
“We’re all here because we care. The question is, are we turning that care into action?” said Jim Bleakley, co-president of IMPACT and pastor of Charlottesville Vineyard Church.
Specifically, IMPACT heard support for their requests of $3 million annually from the city in the Charlottesville Affordable Housing Fund (CAHF) and $5 million from Albemarle for affordable housing. In addition, Albemarle County is currently reviewing the proposed density incentives in their “Housing Albemarle” policy.
This is where localities can learn from the coaches working this weekend in the Final Four.
Kevin Weigand of Winning Hoops spells it out:
Legendary coach Mike Krzyzewski once stated “I have a plan of action, but the game is a game of adjustments. I believe all coaches go into a game with a well -thought out plan of attack. However, in order to win, they must adapt their strategy.
While halftime does not offer an excessive amount of time in terms of minutes, it is the time period most needed to help coaches bring about these adjustments. This time must also be used efficiently. During this time coaches want players to get some rest and water, be able to talk about changes, review the original game plan and goals, talk as a staff privately, and also give players the opportunity to warm -up and get in some additional shooting before the second half. Much to do in a short period of time
This is where Central Virginia’s affordable housing strategies are today – at a time for assessment and adjustment. Beyond throwing budget dollars at the issue, it is time to evaluate those programs that are generating lasting affordable housing and those that are not. By spending money where it is producing affordable units, local governments will be more effective stewards of their limited public resources and generate more units.
We believe both Charlottesville and Albemarle County see this is a time for important “Halftime” adjustments. The City’s Planning Consultant (Affordable Housing Plan, Comprehensive Plan, Future Land Use Map, and Zoning code rewrite) HR&A issued a report earlier this month including sixteen recommendations. Recommendation number six reads:
The City should set annual production goals for housing development and affordability, as well as ensure that housing policies and programs, and decision-making processes are intentionally designed to overcome the past history of racial segregation and ongoing inequities
First, thing to focus on is what is working.
Recently, the Free Enterprise Forum wrote to the Albemarle Board of Supervisors highlighting their successes generating long term affordable rental units. This has been achieved with increased density rezonings as well as a local synthetic Tax Increment Financing (TIF) program leveraged on top of Federal Low Income Tax Credits (LITC). This program works for both for profit and not for profit developers.
In discussing the TIF model (where for 15 years the local property taxes on improvements are rebated if the performance agreement is met. This phases out over the last 5 years of the 20 year agreement) with one of the landowners, I had an “AHA” moment. He explained during the first 15 years of the TIF, the lower tax burden allows the project to pay down the principle on the mortgage. In year 16, he will refinance the lower outstanding balance, the reduced debt service cost provides the project the ability to pay full property taxes AND keep the units affordable for AT LEAST another ten years (One of the LITC requirements).
We have also been impressed with the work of both the Piedmont Community Land Trust and Habitat for Humanity of Greater Charlottesville In these cases, each organization has leveraged limited local funding to develop home ownership units that contain an element of shared equity with the nonprofit.
Each of these successful programs have three commonalities:
- Significant Public Investment funded by the entire community
- Performance Agreements with measurable goals and transparent accountability
- Broad based community support
What is not working?
Inclusionary Zoning – Many years ago, over our objections, Albemarle’s Affordable Housing policy included a 15% inclusionary zoning mandate for affordable units – This policy created less than 50 units in 15 years— A FAILURE. Now the proposed plan is to expanded the mandated percentage to 20%. We have compared that proposal to the watermelon salesmen who lost money on every melon and decided they needed a bigger truck.
The answer to Exclusionary Zoning is NOT Inclusionary Zoning it is relaxation of overly restrictive zoning regulations that exist as a legacy of our nation’s segregationist past. The reality is inclusionary housing policies that require construction of 20% of new units as subsidized units, increases the price of 80% of the product produced, if it gets produced at all.
Here are nine regulatory reforms that could improving housing affordability:
1. Reduce parking and utilize alternative design standards that can help reduce infrastructure costs.
2. Tap Fee Relief – Localities can pay water and sewer fees on Affordable Housing as a part of their Affordable Housing investment.
3. Expedite permits and applications (beyond the current improvements underway)
4. Fee waivers on all affordable units.
5. Localities direct acquisition of land for development of affordable housing. They could then solicit proposals from for profit and non-profit developers.
6. Use of existing government owned land for affordable housing with non and for-profit affordable developers.
7. Allow for special use permits that would enable affordable housing to be constructed outside the established growth areas if suitable utilities and transportation infrastructure are available.
8. Reduce bonding requirements to reflect costs more accurately to complete infrastructure work and allow undrawn construction or development proceeds, with an acknowledgement from the lender, to be considered as partial or total surety.
9. Removing critical slope requirements.
Housing affordability is a community issue that deserves broad based community support and investment. Just as a coach may adjust their strategy to the action on the floor, Affordable Housing investments must be regularly assessed, evaluated, and adjusted.
In short, we believe localities should do more of those programs that are positively impacting housing affordability (rental and ownership) and less of those programs that fail to meet stated goals.
Neil Williamson, President
Since 2003, Neil Williamson has served as President of The Free Enterprise Forum, a privately funded non partisan public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna, Louisa and Nelson County. For more information visit the website www.freeenterpriseforum.org
Photo Credit: Tenor.com