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City Council approves $480,000 to support Habitat for Humanity
Dan Rosensweig and Kathy McHugh present before City Council
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Habitat CEO and president Dan Rosensweig answered questions alongside Kathy McHugh from the Department of Neighborhood Development Services
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Noah Zeidman | Tuesday, August 16, 2016 at 9:21 p.m.

Charlottesville City Council has voted to allocate $480,000 from the Charlottesville Affordable Housing Fund to Habitat for Humanity of Greater Charlottesville. The investment will support the purchase of 16 lots in mixed-income neighborhoods.

In July 2015, Habitat requested $450,000 to support their then-new Project 20 initiative to build 20 affordable homes per year, but council funded only half of the request.

The unanimous vote by council on Monday will provide funding to supplement Habitat’s private fundraising for costs associated with purchasing lots scattered throughout the city.

“[Habitat] would be building these homes in character with the existing neighborhood and the environment,” said Kathy McHugh, a housing specialist in the Department of Neighborhood Development Services. “In some cases, that would involve additional landscaping and hardscaping, perhaps not really required in other current builds, so that all adds to the cost and is part of the justification for coming to you tonight.”

McHugh explained that other programs, including the Low-Income Housing Tax Credit, often have the unintended consequence of concentrating poverty in a single location. She emphasized that Habitat’s proposal would be in line with the city’s goal of achieving 15 percent supported affordable housing, as well as Housing Policy 1.

The policy states that a funding application for an affordable housing project is enhanced if it “provides for a wide variation of income towards the creation of mixed-income neighborhoods.” It also says highest priority will be given to those projects that target very low- and extremely low-income populations.

“Beneficiary families would be selected from among Habitat’s partner family waiting list and would have incomes between 25 percent and 60 percent of average median income,” said McHugh. “[This is] definitely on the lower end, benefiting those we would classify as extremely low- or verylow-income.”

As indicated in Habitat’s proposal, participating families will be required to contribute 100 hours of sweat equity plus an additional 100 hours per adult who will live in the home. The families will be given a no-interest mortgage with a lifespan of about 30 years, the final payment of which diminishes based on the timeliness of initial payments.

If a home later sells at market rate before it is fully paid off, McHugh explained, proceeds will be reinvested to support more affordable housing units.

“I understand the existing zoning is going to be ruling over these lots. If it’s possible to do more than one unit on a lot, will this program do that?” asked Councilor Kathy Galvin.

Habitat president and CEO Dan Rosensweig explained that while such an approach is not necessarily prohibited, Habitat has not considered it in Charlottesville. He suggested that the idea be reviewed in the upcoming city code audit.

Galvin also asked about ways in which the city’s investment in Habitat projects could be publicized at the construction sites, suggesting that the city logo might be prominently placed on signs.

“One caution about that, when you’re trying to get market-rate momentum in mixed-income communities, we’re pretty purposeful in a situation like that, we downplay the Habitat logo because you need that market-rate energy,” said Rosensweig. “You don’t want to spook the market.”

Galvin said she understood Rosensweig’s desire to remain “under the radar” but added that she would still like the city to work with Habitat to explore ways in which the collaboration could be appropriately publicized.

Looking beyond the funding in question, Mayor Mike Signer asked Rosensweig to comment on how council might be more proactive in pursuing the goal of 15 percent affordable housing in the city.

“One of the biggest challenges in the affordable housing sector is that there tends to be money looking for projects, rather than projects looking for money,” Rosensweig responded. “[Projects] end up with so many rules because they’re trying to satisfy a vision of what should happen, and it often doesn’t end up being context-sensitive.”

“The idea was that [the housing fund] was supposed to be flexible money with a high leverage factor. You’ll never get that if you flip the equation and say, ‘We’re looking for [a certain] project,’” Rosensweig explained. “Where you’ll get that is if you’re very strategic about the funding and [it] can flow out almost in the nature of stimulus money, quickly.”

Signer noted that funds also had been allocated to the Albemarle Housing Improvement Program, using this as an example of the fund’s flexibility.

Prior to voting, council commended McHugh for her work in Neighborhood Development Services. McHugh will leave that role Friday and be replaced by Stacy Pethia, who briefly introduced herself to council.

A member of a Habitat partner family, Shymora Cooper, also spoke during the public comment period to express her gratitude to the city for supporting Habitat.

“Thank you for supporting the mission to eliminate poverty housing and empower families by helping provide decent, safe, affordable housing in the city of Charlottesville,” said Cooper. “Because of the city’s support, families like mine are able to become homeowners.”

 

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