Tag Archives: affordable housing

C-ville’s Height Slight Harms Affordable Housing

By. Neil Williamson, President

Adapted from comments presented to Charlottesville Planning Commission November 20, 2018

I want to be encouraged, but I don’t know that I should be.

Earlier this year, City Council received the Housing Needs Assessment.  This study indicated the City needed over 3,000 affordable units added to the inventory to meet the current need.   One might think the Comprehensive Plan that was being drafted by the Planning Commission would seek to address this need by increasing density.  One might be wrong – in fact you may have done the reverse.

Based on our reading of the proposed fuzzy line maps, before Saturday’s meeting, you are designing a City with significantly fewer by right residential units than your current comprehensive plan.  We do not know what the by right density of the new plan compared with your current plan.  We again ask for that data before you move this forward to City Council.

As we imagealerted you to back in January  [Cville PC Paradox — Build Less & Increase Affordability], the plan reduces ‘by right’ building height (and therefore capacity) across nine of the City’s thirteen zoning districts.

Considering the importance of the “Missing Middle” Housing that we discussed  back in August [ Affordable Housing Policy Makes Building Affordable Housing Impossible], the Free Enterprise Forum is disappointed at the dominance of yellow “Low Intensity” land use that dominates the proposed map.

Two days ago, you held your ill timed Saturday afternoon work session  – which was required because you were unable to plan and  complete your work on schedule in the previous work sessions.   – I understand in that meeting you recolored the map to allow increasing “intensity” by right.  I do not know because I had other plans on Saturday afternoon [William & Mary vs. Richmond Football] and I missed your matinee program.

Neither does the rest of the public because as of 4 pm today, the map has not been changed on the website.

Absent any information for the public to review, we can only be hopeful that the map of your plan for growing Charlottesville will see the yellow move to higher intensity.

I beg of you to be honest with the public and tell them exactly what this plan, as drafted, will allow is  fewer units to be constructed without a special use permit (SUP).

The political reality of the day is if an SUP is required the project is DOA because a vocal NIMBY minority, sometimes citing community values, will be empowered to show up at the public hearing and stand in the way of the additional density that could help the City meet its growing housing needs.

A Planning Commission, worthy of the name, should be planning for a future for all its future citizens not just preserving the status quo.  Failing to properly allow and plan for growth in a land locked City, will result in a failing “World Class” City.

I do hope the new map will have more purple and more intensity.

Thank you for the opportunity to speak.

Respectfully Submitted,

Neil Williamson, President

Neil Williamson is the President of The Free Enterprise Forum, a 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: www.missingmiddle.com 

 

 

 

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Affordable Housing Policy Makes Building Affordable Housing Impossible

By. Neil Williamson, President

Back in 2005, when Albemarle County instituted its 15% inclusionary housing regulation on all new residential rezonings, Overton McGee, then Charlottesville Habitat for Humanity CEO stated “It was a good first step”.  I was quoted in The Daily Progress “You just made housing less affordable to 85% of new home buyers”.    My larger economic point seemed to be lost on the reported but time has proven this paradoxical prognostication to be correct.

Please let me explain.

Considering the previous Habitat CEO’s position on mandated 15% affordable housing requirements, it is interesting what the current Charlottesville Habitat for Humanity CEO, Dan Rosensweig said at an Albemarle County work session last week.  From my Twitter feed:

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Recent news reports have highlighted the impact of inclusionary zoning.  The Economist Booming Seattle Struggles to Stay Affordable spoke of “the grand bargain”

Seattle’s proposed solution to this deadlock, unveiled in 2015, is known as the “grand bargain”. It would reduce restrictions and unleash building on big patches of city. In exchange, developers would have to reserve a few units for renting below the market rate or pay into an affordable-housing fund. Such schemes, known as “inclusionary zoning”, are increasingly common in progressive American cities. They can lead to more mixed districts and placate left-wing critics. But they are not without problems.

By reducing future earnings, inclusionary zoning acts as a tax on new development. If the affordability requirements are set too high, many new projects will not be built. Bill de Blasio, New York City’s progressive mayor, championed requirements that at least one-fifth of new units should be offered below the prevailing market rate. San Francisco sets the threshold as high as 30% and imposes a clutch of added “impact fees”. Developers complain that these fees suffocate all but the most lucrative projects—which then invite criticism as “luxury high-rises”.

Charlottesville and Albemarle County have heard the cry of building only high end product.  The perverse reality is that the affordable housing fees actually push against housing affordability.

Due to regulatory hurdles and outright prohibitions, there is a lack of price variety (and format) in the new products being constructed.  In Late July, Daniel Herriges of www.StrongTowns.org wrote of the oft mentioned ‘missing middle’ housing in his article “Why Are Developers Only Building Luxury Housing”.

Missing Middle housing—buildings containing anywhere from 2 to 19 units—can be a sweet spot when it comes to construction cost. Duplexes through fourplexes in particular are built in much the same way as single-family homes, but the cost of the land is distributed across multiple households. Even cheaper to build than a duplex or fourplex is an accessory dwelling unit (ADU). It’s no accident that a disproportionate share of America’s existing “naturally occurring” (i.e. without subsidy) affordable housing takes Missing Middle forms.

Unfortunately, we’ve pretty systematically outlawed the Missing Middle in many neighborhoods. Single-family homes are the only thing that can be built on 80% of residentially-zoned land in Seattle, 53% even in renter-friendly San Francisco, and 50% in Philadelphia, to name just a few cities. In suburbs, it’s common for over 90% of land to be zoned for single-family residences exclusively.

Robert Steuteville writing on www.CNU.org highlights the work of Dr. Arthur C. “Chris” Nelson of the University of Arizona regarding the market demand for the ‘Missing Middle’ housing:

This supply and demand mismatch is behind the need for “missing middle” housing, often built by small developers and builders. Meanwhile, the demand for large-lot single-family housing, the mainstay of the US building industry from the 1960s through 2008, is declining. Nelson’s research comes up again and again in discussions with thoughts leaders in small-scale urbanism. . .

. . .Nelson has been saying much the same thing for more than 10 years—yes, even before the housing crash—and he has been right so far. His numbers are based on demographics, demographic trends, market trends, and housing supply and construction data.

 

If we accept that the majority of the land available for development is designated to single family residential, and that there is a market demand for a different, more intense form of development, can regulations be relaxed to allow such increased density and perhaps increase the supply of missing middle (affordable) housing?

Over the last few years we have seen significantly more multifamily housing units come into Albemarle County Development Area housing mix:

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According to Adam Beltz of the Star Tribune, Minneapolis is now considering fourplexes as part of their affordable housing solution:

In a cityscape dominated by single-family homes, a proposal to allow four-unit residential buildings virtually everywhere in Minneapolis is stirring strong and conflicting feelings among neighborhood leaders.

A draft of the city’s updated comprehensive plan won’t be published until March 22 or completed until December, but the City Council and Mayor Jacob Frey were recently briefed on the high-level concepts, one of which is a historic rewriting of the zoning rules that would allow property owners to build fourplexes on any residential property in the city.

Middle Housing www.missingmiddle.com describes the fourplex as a medium structure that consists of four units typically two on the ground floor and two above with shared entry.  Typical unit size is between 500 – 1,200 square feet with a net density of between 15 to 35 dwelling units per acre.

How might such a proposal be received in the City of Charlottesville or Albemarle’s development areas?

  • How could reducing the regulatory requirements increase housing affordability?
  • Would increasing the developable area of Albemarle positively impact affordability?
  • Would relaxing Charlottesville’s Accessory Dwelling Unit (ADU) regulations assist in providing a bulwark against gentrification and revenue for the existing homeowner?

We find ourselves agree with Albemarle Planning Commissioner Pam Reilly who last week said, “We are lacking an affordable housing policy to guide our decision making”.

If the community wants to address the market need for affordable, accessible housing, policies and regulations should permit, but not require, the market to respond to consumer demand for denser development AND redevelopment without mandated affordable units.

Ironically, getting rid of the affordable housing mandate will make housing more affordable.

Respectfully submitted,

 

Neil Williamson, President

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Neil Williamson is the President of The Free Enterprise Forum, a 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: www.missingmiddle.com

Is Charlottesville ready for Collins’ Affordable Housing “Marshall Plan”?

By Neil Williamson, President

Former Charlottesville City Council candidate and Public Housing Advocate Brandon Collins is energetic and passionate, but he is rarely described as optimistic or even jubilant.

Late in Monday night’s (6/18) City Council meeting he was both as he called for Charlottesville to give up on developer incentives that produce precious few affordable housing units and instead launch a “Marshall Plan” for affordable housing to meet the current shortfall of 3,318 units.

Please let me explain.

Council received two important, somewhat disconcerting,  housing reports.  Prepared by Partners for Economic Solutions, the housing needs assessment was blunt in its analysis of current and projected market conditions.  It concluded that the city had a current need for 3,318 affordable units, growing to 4,020 units in 2040. The reasons for these conditions were summarized:

The forces creating this affordability crisis and impeding fair and affordable housing include:

• The city’s constrained supply of developable land supply limits the potential for new residential construction.

• More than 200 year-round housing units have been diverted to short-term transient rentals through Airbnb and other leasing services.

• High land and development costs limit the market’s ability to build new units that could rent at levels affordable to households at less than 60 to 80 percent of AMI.

• Federal funding for construction of new affordable housing and for Housing Choice Vouchers has not kept pace with the growing need. Public housing funding to the Charlottesville Redevelopment and Housing Authority includes almost no support for renovating existing public housing.

• Zoning policies such as minimum lot sizes, height restrictions, setback requirements and maximum residential densities can prevent more intensive development of the city’s limited land resources. Community resistance to change leads to policies that prioritize preserving existing single-family neighborhoods over the development of new affordable housing.

• The lack of predictability in the City’s development approval process has a chilling effect on developers considering projects that require City Council and Planning Commission approval. A last-minute decision can scuttle or significantly delay projects in which the developer has proceeded in good faith, investing hundreds of thousands of dollars.

• The approval process is expensive and time-consuming, adding directly to the total development costs and ultimate housing prices.

• The tight housing market allows landlords to discriminate against low-income households with limited financial resources, spotty or no credit histories, arrest records, children, housing choice vouchers or other perceived risk factors.

• Housing affordability for many households is an income problem. Low levels of education, limited skills training, inadequate public transit and difficulty finding quality affordable child care can prevent individuals ability to reach financial self-sufficiency.

With this report in hand, the folks at Partners for Economic Solutions examined the height bonuses currently under consideration in both the Strategic Investment Area and the Comprehensive Plan.  The concept explored was how many units could be provided and at what level of affordability.

The very detailed report included carrying costs, a 7% profit margin as well as other development costs.  This profit margin was explained as necessary or the project would not gain investors – they would instead put their money into other projects with a better return on investment.

Development costs are impacted by several factors, but most significant are the style of construction and the type of parking. Height has a direct impact on costs with lower-cost wood-frame construction limited to four stories. A fifth story can be added if the first floor is constructed in concrete rather than wood. Above five stories, most apartment buildings are constructed on concrete or steel and concrete at a much higher cost per square foot.

Parking is a major cost factor, averaging $5,000 per surface space, $20,000 per space in an above-ground parking structure and $32,000 per space in a below-ground structure. Surface parking is the least expensive option, by far, but it consumes a great deal of land.

The model assumed up to four stories of development would be served by surface parking with taller buildings requiring structured parking.

The analysis also suggests a limited ability for height bonuses to secure committed affordable housing units. Generally speaking, Charlottesville rents do not support the construction of mid-to high-rise residential buildings with the exception of student housing adjacent to the University of Virginia grounds, high-end condominiums and possible niche products such as luxury senior housing. Five-story structures are feasible only at the higher rents achievable in Downtown neighborhoods.

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In conclusion, the report found that if density is the only incentive, based on market conditions, it does not work.   Providing perhaps 15% of the incremental increase in units @ 60% AMI or 10% of the incremental increase @ 50% AMI.   The consultant went so far as to say, “some of the Planning Commission concepts have no value to the developer; it is NOT an incentive”.

After this well presented and documented report was presented, Councilor Kathy Galvin said,

This would depress a hyena

Mayor Nikuyah Walker said, “This is bad”, and continued to express concern that the economic analysis included a profit margin for the developer.  She contended that until we change that conversation we are never going to fix this.  She said that if you are willing to house just a few people at a time – that’s not a direction I support.

Councilor Mike Signer called out Albemarle County’s role in the housing affordability issue.  He indicated the politics of increasing density is very tough highlighting his affirmative vote in the 3-2 decision to rezone 10th and Jefferson.  He also pushed back on the contention that a profit margin did not matter.

Vice Mayor Heather Hill called out the Air BnB taking up some of the Accessory Dwelling Units are being pulled out of affordable housing stock.

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Brandon Collins

At the end of the meeting, Collins presented a different perspective on the reports.  He admonished City Council to think big.  If they are really serious about fixing the housing affordability issue, they should stop depending on developers; they should do it themselves with their existing Charlottesville Redevelopment and Housing Authority.  Collins’ “Marshall Plan” might include $140 million dollar bond issuance dedicated simply to the creation of new affordable units that will stay perpetually affordable. When pressed by Councilor Wes Bellamy how the city might pay for that debt service, Collins admitted he had not figured that out yet but thought it could be resolved.

Beyond the ironic title “Marshall Plan”, the Free Enterprise Forum has several questions.

  • If providing significant affordable units was not economically feasible with a 7% profit margin does the loss of that 7% make the economics work?
  • Considering the current political climate in Charlottesville, could a $140 million bond be supported by the citizens?
  • Would this council support the tax increases needed to service the debt issuance?
  • Does addressing Affordable Housing head on start to address some of the other socioeconomic challenges in the City?
  • Could this program actually increase the demand for affordable housing?

As usual, we have more questions than answers.  Stay tuned.

Respectfully Submitted,

Neil Williamson, President

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Neil Williamson is the President of The Free Enterprise Forum, a 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: TV10

Greene Supervisors Decline US 29 Residential Rezone

By. Brent Wilson, Field Officer

Significant public policy issues including affordable housing, economic development and commercial capacity were all part of Tuesday night’s Greene County Board of Supervisors’ rezoning public hearing. A standing room only crowd as well as several media outlets were on hand to hear an unsuccessful rezoning request and, then if rezoing were approved, a request for a Special Use Permit.

Back in December the Greene County Planning Commission voted 4-1 (Morris opposed) to recommend approval of the Mark-Dana Corporation request to rezone of a tract of 8 acres in Ruckersville from B-2, Business to R-2 , Residential.  The current owners of the property are John and Wanda Melone of the Melone Family Trust who plan on selling the property to the Mark-Dana Corporation to be developed.

Greene County Planner Stephanie Golon presented the rezoning application identifying the property as just south of the Blue Ridge Café and the Ruckersville Antiques Gallery on Route 29 South. The 8 acres requesting to be rezoned sits to the west of 7 acres (farther away from Route 29), both parcels owned by the Melone Family Trust.

Golon mentioned that the parcel is located at the south end of the area identified as mixed use in the Comprehensive Plan. The feedback from the departments in Greene County did not have any concerns other than the school system – Schools Superintendent Andrea Whitmarsh responded that the Ruckersville Elementary School was at capacity already and the addition of 105 apartments would add to the overcrowding.

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Andrea Whitmarsh

Projected residential growth of the county is expected and is part of the schools justification for expanding the school system. However, the development could generate up to $1.2 million in tap fees to access the public water system.

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David Koogler

Next David Koogler, chairman of the Mark-Dana Corporation,  gave the Supervisors some background of his company. His mother, father and Sister – Dana – operate the company that was started in the 1980’s when President Reagan signed low income housing into law. They have done similar projects in Virginia and Texas and they live in Grottoes, VA.

Jack Melone, one of the owners of the property, then addressed the Board. He explained that the parcel was originally zoned Agricultural, the front part then was rezoned to B-2 and later the county changed all of the zoning to B-2.  Melone stated that this rezone to B-2 has brought about a significant tax increase for him and his family.

The hearing then was open to the public with 12 people commenting and all but two asked that the Supervisors decline the rezoning with the major reason being that it would be take away from business property along Route 29. However, Simon Fiscus Director of Skyline CAP spoke in favor of the project as a way to provide more low income housing for the county.

Several of those opposed to the project agreed that low income housing in Greene County is needed, but not in this location – a prime business location. Others opposed the rezone since the county has already signed up for large expenditures for a water supply and school expansion. The consensus was that adding more people would aggravate both of these issues.

The other issue made by Bill Gentry a realtor with Jefferson Land & Realty in Madison in favor of the rezone was that commercial development looks at rooftops to determine if there is enough demand to support their business. He cited the Lamb property that has set vacant for decades and other parcels that have similar situations. The rezone and the proposed development would help attract more development.

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Bill Gentry

The meeting then shifted to a discussion amongst the Board members. Supervisor Bill Martin asked Golon if the access to the parcel being considered would be through the frontage rather than by some connector in the rear. Golon indicated it is planned to access through the front of the property. Martin further stated that he supports affordable housing and Greene County needs it. However, this property is better suited as B-2, Business.

Supervisor Dale Herring agreed that the property should stay B-2 and that in the long run – 20 to 30 years – the property will better serve the county as currently zoned. Greene needs affordable house, but somewhere else.

Supervisor David Cox brought up another issue that he is not in favor of split zoning and that this would go against developing a business district. The Supervisors unanimously agreed to not approve the zoning request.

At this point Chairperson Michelle Flynn asked Koogler if he wanted to pursue the Special Use Permit.  Koogler said no but he asked to address the Board. He stated that this is the third parcel he has brought before the Supervisors in Greene and all have been disapproved. He stated that his company’s projects do attract businesses. His final request was – would the county please point him to a parcel that would meet the approval of the Supervisors so that his company can bring affordable housing to Greene County

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Alan Yost

Hopefully Greene County can have Economic Development Director Alan Yost and the EDA help identify a viable parcel for this development. As for the specific parcel of Melone, he has previously stated that the tax burden of the property is not sustainable for him. While the county may want commercial development on the parcel – Melone he has tried for years to develop it with business developers, unsuccessfully – he may have to find another way to dispose of the property.

Brent Wilson is the Greene County Field Officer for the Free Enterprise Forum a privately funded public policy organization.  The Free Enterprise Forum Field Officer program is funded by a generous grant from the Charlottesville Area Association of REALTORS® (CAAR) and by readers like you.  To support this important work please donate online at http://www.freeenterpriseforum.org

Greene Planning Commission Approves 105 Apartments

By. Brent Wilson, Field Officer

A proposed affordable housing apartment project on US 29 in Ruckersville took a step forward Wednesday night.

The Mark-Dana Corporation came before Greene County’s Planning Commission on December 20th seeking  a two-step approval – 1) rezone a tract of 8 acres in Ruckersville from B-2, Business to R-2 , Residential and 2) a Special Use Permit (SUP) to increase the density to allow 105 apartments to be built on the 8 acres.  The current owners of the property are John and Wanda Melone of the Melone Family Trust.  If the rezoning and SUP of the property are approved, the Melones plan on selling the property to the Mark-Dana Corporation to be developed.

Greene County Planner Stephanie Golon presented the rezoning application identifying the property as just south of the Blue Ridge Café and the Ruckersville Gallery antique store on Route 29 South.  The 8 acres requesting to be rezoned sits to the west of 7 acres, both parcels owned by Melone Family Trust.

Golon mentioned that the parcel is located at the south end of the area identified as mixed use in the Comprehensive Plan.  The feedback from the departments in Greene County did not have any concerns other than the school system – Superintendent Andrea Whitmarsh responded that the Ruckersville Elementary School was at capacity already and the addition of 105 apartments would add to the overcrowding.  This is part of the school’s justification for expanding the school system.

The other main issue of the presentation is the Mark-Dana Corporation will be applying for financing through the Low-Income Housing Tax Credit Progam  which will help provide affordable housing in Greene County.   Under this financing program, units constructed must remain affordable for forty years past the date of occupancy.

David Koogler

David Koogler, chairman of the Mark-Dana Corporation, reviewed the project for the commission stating that the units will have a brick frontage, they will be three stories in height and there will be one, two and three bedroom apartments.  Koogler explained that his parents started the business and they now have 23 properties with 15 of them in Virginia and the balance in Texas.

The hearing then moved to comments from the public which brought up several concerns – the project is barely cash positive with only 30 students estimated, another 2 students would cause the project to be cash negative.  The other issue brought up was the demand on the water supply.   The White Run project won’t be completed for five years after the apartment project is completed (2019 vs. 2024).   However, Simon Fiscus Director of Skyline CAP  spoke in favor of the project as a way to provide more low income housing for the county.

Commissioner Frank Morris brought up the question of how many housing units this parcel would allow by right.  Planning Director Bart Svoboda answered that based on 8 acres it would accommodate 48 units.  Commissioner William Saunders asked if the possible lack of water can be a reason to reject the rezoning request.  Svoboda answered no, since there are EDU’s available.

Chairman Jay Willer brought up the fact that if this rezone to R-2 is approved it would be the first residential rezoning in the growth area of Ruckersville.  The vote was then taken and was approved 4-1 with Commissioner Morris voting against the rezone.

With the rezoning approved, the commission turned to the Special Use Permit request to allow 105 apartment units on the eight acres, up from the 48 units allowed by right in R-2.   Koogler added to Golon’s presentation about the number of new residents in the apartments.  Koogler stated that historically some of the apartments are rented by residents already living within the county the apartments are constructed.  Therefore the net increase which generates a need for additional resources from the county is less than the total number moving into the apartments.

In the SUP public hearing, again, the input from the pubic focused on the pressure on the school system.  Inversely, Fiscus again stated the need for more affordable rental units.  Morris brought up his concern about setting a precedent of going above the “by right” number of units per acre.  McCloskey asked Svoboda if a condition of the SUP could be that it restricted the property to affordable housing.  Svoboda answered that no, under state code, that type of restriction could not be applied to the property.

Willer asked Mr. Koogler one last question – how long does the restriction of the property last?.  Koogler answered that the restriction lasts 40 years and stays even if the property is sold.

At that point the commission voted 4-1 to recommend approval of the Special Use Permit to the Board of Supervisors.

Brent Wilson is the Greene County Field Officer for the Free Enterprise Forum a privately funded public policy organization.  The Free Enterprise Forum Field Officer program is funded by a generous grant from the Charlottesville Area Association of REALTORS® (CAAR) and by readers like you.  To support this important work please donate online at http://www.freeenterpriseforum.org

Charlottesville Mistaken & Mistimed Mandate

Adapted from comments to the Charlottesville Planning Commission May 9, 2017

By.  Neil Williamson, President

unintended-consequencesThe Free Enterprise Forum often speaks of unintended consequences of proposed legislation. We believe staff’s current recommendation regarding regulations around forgiving developer fees heads Charlottesville in the wrong direction.

Please let me explain.

In 2003, fourteen years ago, the US Department of Housing and Urban Development said:

Most housing professionals agree that concentrating assisted-housing for low- and very low-income Americans in dense, urban areas is not an effective use of scarce affordable housing resources. Over the past decade, professionals in the affordable housing industry have turned increasingly to mixed-income housing as an alternative to traditional assisted-housing initiatives. Mixed-income housing is an attractive option because, in addition to creating housing units for occupancy by low-income households, it also contributes to the diversity and stability of American communities.

There have been numerous successful mixed-income developments nationwide. State and local governments have developed incentive programs and initiatives to promote mixed-income housing. In the past decade, the U.S. Department of Housing and Urban Development (HUD) has provided support for public housing authorities to de-concentrate traditional public housing in favor of the development of mixed-income housing. In addition, HUD funding from the HOME Investment Partnerships Program can also be a valuable resource for states and local jurisdictions to finance mixed-income housing initiatives, or to develop, design and implement new mixed-income housing programs that address local housing needs. HOME funds are specifically designed to be flexible in order to meet local housing needs.

In practice, I have seen Charlottesville intentionally moving toward more mixed income neighborhoods as a tapestry of price points for the communities being developed.

Why then would staff recommend the following:

To ensure the affordable units are actually provided in new developments, staff recommends no Certificates of Occupancy be issued until the City confirms the affordable units have been developed and the developer has entered into an agreement with the City that these units will remain affordable for a specified period of time.

While this may look good on paper, the reality is that by DEMANDING the developer build the affordable units prior to receiving certificates of occupancy for the market rate units virtually guarantees the affordable units will not be mixed with market rate rather will be concentrated in one portion of the project. Further, by positioning the affordable units first in the pipeline this well intentioned requirement would create significant financing challenges for the development project as a whole.

If the Planning Commission is committed to mixed income communities that are truly mixed, the Free Enterprise Forum requests that you strike this language and move forward with the concept of development fee forgiveness as a small step to address the larger housing affordability crisis in our region.

Respectfully Submitted,

Neil Williamson, President

Neil Williamson is the President of The Free Enterprise Forum, a privately funded public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna, Louisa and  Nelson County.

Photo Credit: http://theadvocates.org/tag/liberator-online-2

 

Fluvanna Approves New Townhouses

By. Bryan Rothamel, Field Officer

The Fluvanna County Board of Supervisors approved a 40-unit townhouse community near Lake Monticello at its last meeting of 2016.

Rivanna Heights, approved on a 4-1 vote, is situated on land on South Boston Road (Route 600). The development is up the hill on South Boston, up the hill from the intersection with Lake Monticello Road (Route 618).

Patricia Eager (Palmyra District) raised concerns about where the community sits on the road. “My primary concern is of the people that will live there,” said Eager.

The road’s speed limit is 45 mph and will now add a community in between the intersection with Lake Monticello Road and the Riverside section of Lake Monticello.

Tony O’Brien (Rivanna District) said, “I’d rather see this further up the road than it is right now.” He also mentioned the county might have to lobby the Virginia Department of Transportation (VDOT) to lower the speed limit of the windy road in the future.

The community will have a separate entrance and exit. The homes will form a triangle with two way traffic allowed on two sides but all traffic will have to funnel through the entire community. VDOT required to have one way traffic for a certain distance from entrances and exits.

Developers are giving the public safety officers an area to run radar and will also have emergency entrance.

Rivanna Heights is expected to have townhouses with 1,300 square feet, priced between $180,000 to $240,000. Representatives of the applicant repeatedly called the development “affordable housing.”

“You can get a free standing house for $200,000,” said Eager.

Eager was the lone vote against the development.

In the first meeting of 2017, the supervisors are keeping status quo of board leadership with chairman Mike Sheridan (Columbia District) as chairman for 2017.

In an primer to the FY18 budget season, supervisors were updated by staff. The reassessment equalized real estate rate will be $0.882 per $100 assessed. The current tax rate is $0.917 per $100.

The county’s savings account, known as the “Fund Balance”, has an unrestricted balance of $8.4 million. In June the unrestricted balance was $9.1 million. The county also keeps an additional 12 percent of the budget ($8.1 million) as a reserve.

County administrator Steve Nichols will formally present his FY18 budget on February 1.

The next supervisors meeting is January 18 at 7 p.m.


https://freeenterpriseforum.files.wordpress.com/2015/10/bryan-rothamel.jpg?w=151&h=151The Free Enterprise Forum’s coverage of Fluvanna County is provided by a grant from the Charlottesville Area Association of REALTORS®and by the support of readers like you.

Bryan Rothamel covers Fluvanna County for the Free Enterprise Forum

Restrictions in Charlottesville’s West Main Down Zoning May Further Gentrify the Neighborhood

By Neil Williamson, President

Tonight, Charlottesville City Council will hold their last meeting of the year and have the first reading of the West Main Street Downzoning.  This will be the final meeting for DedeHujaMayor Satyendra Huja and Vice Mayor Dede Smith.

There have been rumors that this Council may dispense of a second reading and enact the ordinance – the Free Enterprise Forum believes that would be a huge mistake and remains hopeful that the new council will have the opportunity to vote down this ordinance in the name of affordable housing.

Please let me explain.

Over the last few weeks, I have been reading a great deal about rental housing economics.  A recent Harvard study showed that the homeownership rates dropping while the renter households increased.  The media has been very interested in the increase in the cost of rental units and its impact on the middle class.  Considering the proposed downzoning on Charlottesville’s West Main Street, one only needs to look to the larger cities to see how land use restrictions can impact the fabric of the community.

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Interestingly, the Harvard study did not go into the reasons for the increases in rental costs.  Fortunately, The Washington Post’s Emily Badger wrote recently about Why it’s so hard to afford a rental even if you make a decent salary

This chart, from a report on America’s rental housing from the Harvard Joint Center for Housing Studies published today, illustrates that only about 10 percent of our recently added rental apartments would be affordable to the nearly half of renter households in America who make less than $35,000 a year:


Note: Rents based on 30% of income affordability standard. Sources: US Census Bureau, 2015 Survey of Market Absorption, 2015 CPS. Harvard JCHS.

Badger’s article, unlike the Harvard study does speak to the reasons the rent for new apartment housing is increasing:

The number of renter households in the top 10th of the income spectrum rose 61 percent over that decade, more than for any other group. So developers are not simply building luxe apartments no one wants to rent.

But they’re also responding to the worrisome dynamic that we’ve made it very, very difficult in many cities to construct market-rate housing that would be affordable to the middle class or modest renters. It’s economically challenging for developers to create new apartments the median renter could afford — at about $875 a month — while covering the costs of constructing them.

Height limits, parking requirements and zoning restrictions all push up the cost of construction. So do lengthy design reviews and legal battles with neighborhoods opposed to new development. Developers must also build at the densities communities allow, and in the limited places where they allow higher density. And if a given parcel of land is only zoned for about five stories of apartments, those apartments may have to command $2,500 a month each to make the project profitable. Emphasis added-nw

Nobel Prize winning economist Paul Krugman’s New York Times column entitled  “Inequality in the City” also identifies New York’s land use regulations as a major factor in increasing rents.

And this is part of a broader national story. As Jason Furman, the chairman of the White House Council of Economic Advisers, recently pointed out, national housing prices have risen much faster than construction costs since the 1990s, and land-use restrictions are the most likely culprit. Yes, this is an issue on which you don’t have to be a conservative to believe that we have too much regulation.

The good news is that this is an issue over which local governments have a lot of influence. New York City can’t do much if anything about soaring inequality of incomes, but it could do a lot to increase the supply of housing, and thereby ensure that the inward migration of the elite doesn’t drive out everyone else. And its current mayor understands that.

But will that understanding lead to any action? That’s a subject I’ll have to return to another day. For now, let’s just say that in this age of gentrification, housing policy has become much more important than most people realize.

For all the lip service paid to affordable housing, it will be most interesting if this last meeting of this Charlottesville City Council will addresses this question before they exacerbate the situation with even more costly regulations.

Respectfully Submitted,

Neil Williamson

Neil Williamson December 2 2015 Albemarle BOS meeting Photo Credit Charlottesville TomorrowNeil Williamson is the President of The Free Enterprise Forum, a privately funded public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna, Louisa and  Nelson County.

Photo Credits:  City of CharlottesvilleCharlottesville Tomorrow

John Lennon and Albemarle Affordable Housing

By Neil Williamson, President

Adapted from testimony given to the Albemarle County Planning Commission December 15, 2015

While I appreciate this Lame Duck Planning Commission’s interest in focusing on affordable housing, I am concerned that this discussion is misplaced; it should be the focus of the elected Board of Supervisors.  Many of the tougher questions are far outside the mission of the Planning Commission.

Thirty-five years ago this month we lost a generational poet and talent, John Lennon, who asked us to “Imagine”.

Opening the affordable housing lens far beyond the scope of the Planning Commission, I too am asking you to use your imagination.

Imagine if Albemarle County actually followed State Law and reduced their cash proffer policy from more than $20K per unit to under $5K, or better yet eliminated this unreliable, unfair “welcome stranger” tax – how would that impact housing affordability?

Imagine if Albemarle County considered affordable rental units, apartments, condos and homes as a part of their affordable housing stock – how might this reflect the reality of affordable housing (not home ownership)?

Imagine if Albemarle County, perhaps working with Albemarle Housing Improvement Program, invested in keeping the existing affordable housing stock in good repair – how might this small investment impact the amount of affordable housing?

Imagine if Albemarle County loosened their restrictive grip on 95% of their land mass and expanded their development area and increased the supply of buildable lots – how would that impact the cost of lots?

Imagine if Albemarle County encouraged transitional areas on the edges of the development areas for modular housing – how would this impact affordable housing supply?

TJCLTImagine if Albemarle County invested in Community Land Trusts that keep housing stock affordable for generations rather than the current unsustainable inclusionary zoning model makes 85% of new homes less affordable.  This misguided policy rewards the affordable housing proffer lottery winner with all of the appreciation gains. How would this change in strategy impact how long a home stays affordable?

Imagine if Albemarle County reduced the bureaucratic red tape and regulatory hurdles to streamline rezoning approvals.  If a project could be approved in 6 months instead of 24, thus reducing the carrying costs – how might that impact affordable housing?

Imagine if Albemarle County had a large amount of appropriately located and designated Light Industrial Land that could provide good paying career ladder jobs – how might that impact the demand for affordable housing?

Yes, there are imaginative ways to improve Albemarle County’s situation.  Regulatory reform and proffer elimination are within the scope of the planning commission purview.

Larger issues of increased economic vitality and job creation are better suited for the new Albemarle County Board of Supervisors sworn in earlier today.

I must admit I remain cautiously pessimistic that an aggressive economic development plan is a major plank of the new Board’s agenda.  I can’t tell you how much I hope I am wrong.

Perhaps, I am the one who needs a little more imagination.

Respectfully Submitted,

Neil Williamson, President

Neil Williamson December 2 2015 Albemarle BOS meeting Photo Credit Charlottesville TomorrowNeil Williamson is the President of The Free Enterprise Forum, a privately funded public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna, Louisa and  Nelson County.

Photo Credits:  pixgood.com,  sodahead.com, Charlottesville Tomorrow

Only in Albemarle, Do You Make Housing Affordable by Making It More Expensive

Adapted from Comments to the Albemarle County Board of Supervisors regarding Housing Chapter of the Comprehensive Plan September 9, 2014.

My name is Neil Williamson and I serve as the President of the Free Enterprise Forum  a privately funded public policy organization covering local government in Charlottesville and the surrounding localities.

Tonight you might be discussing the Housing Chapter of the Comprehensive Plan. Internal to this chapter is one of the most baffling policies of Albemarle County – the affordable housing proffer. I have passed out a recent Richmond Times Dispatch article questioning the rationale and nexus of cash proffers Are Proffers on Shaky Ground?.

For all residential rezonings, Albemarle currently requires 15% of the new units be affordable. This is on top of the $20,000+ per Single Family Unit Cash Proffer.

The affordable housing proffer ultimately results in 85% of all new units to be less affordable. By making the majority of the new houses more expensive, you have harmed overall housing affordability. Only in Albemarle do you make things more affordable by making them more expensive.

According to the Draft Chapter:

Albemarle County’s Affordable Housing is defined as houses affordable to households not exceeding 80% of the area median income.  At present an “affordable” sales price for a home is $211,250 for a family of four paying 30% of their income for housing costs.  Approximately 40% of the households in Albemarle have incomes at 80% of the median or lower.

Those buyers who acquire the “affordable” units are effectively lottery winners. Their neighbors have subsidized their purchase and when they choose to sell, there is nothing that keeps that home affordable and the buyers gain the windfall. As noted on Page 9.13 “If Albemarle County is to have affordable housing stock, it must find a way to make sure the affordable units stay affordable.

Why does it fall on new home buyers to “solve” the affordable housing inventory issue?

To date as a result of rezonings,  approximately 1,200 affordable units have been “voluntarily” proffered (100 have been built).  In addition, approximately $1.6 Million Dollars have been “voluntarily” proffered as cash-in-lieu of units.

If this is a community issue, why isn’t the community equally invested?

The reality is due to the myriad of regulations, codes of development, $20,000 per single family home cash proffers, mandated sidewalks, street trees, water and sewer hookup fees – new housing stock is perhaps the worst place to try and create (and maintain) affordable housing.

The Free Enterprise Forum believes adaptive reuse and refurbishment of existing housing stock would be a much more cost effective method to increase affordable housing. Further study should be done regarding financial vehicles that allow the property to remain at market value and the loan to be modified – such work might go a long way in keeping housing affordable – The Housing Trust model is one such vehicle.

In addition, we do not believe this chapter adequately addresses the significant impact of rental units on the market. Affordable housing does not have to be affordable housing ownership.

We encourage you to pursue code changes to allow more flexibility for accessory units in the development areas and to allow residential dependencies in the rural areas. While the latter may seem to contradict your goal of moving development into the development areas, it is a reality that eliminating the land cost for a second residence on a 21+ acre parcel dramatically impacts the cost of the home.

We applaud the attention paid to reducing or eliminating minimum lot sizes in the development areas.  We encourage the continued review of setbacks to further maximize land in the development area for development.

Finally, we would be remiss if we did not raise issue with Strategy 6d regarding increased staffing. Just as in the other chapters, staffing levels should be an operational decision by the Board of Supervisors and not a line item in a Comprehensive Plan.

Thank you for the opportunity to comment

Respectfully Submitted,

Neil Williamson

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20070731williamson Neil Williamson is the President of The Free Enterprise Forum, a 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