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Council briefed on new ideas for affordable housing development
Alexander Ikefuna before City Council, July 17, 2017
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Credit: Sean Tubbs, Charlottesville Tomorrow
Alexander Ikefuna (right) briefs Council as Kathy Galvin (left) and Deputy City Attorney Lisa Robertson (middle) look on
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Sean Tubbs | Wednesday, July 19, 2017 at 9:17 p.m.

The Charlottesville City Council soon may have more ways to increase the number of homes that are affordable for people with low and moderate incomes.

The city’s planning director briefed councilors on Monday about how land banks, zoning changes and new community organizations could be used to help reach the goal of having 15 percent of the total housing stock deemed affordable by 2025.

“I support this broader portfolio, and it is going to give us a lot more tools to produce affordable housing,” said City Councilor Kathy Galvin.

Galvin had requested that city staff investigate if Charlottesville could create a nonprofit corporation with the ability to build its own affordable units, separate from the Charlottesville Redevelopment Housing Authority.

The CRHA oversees 376 existing public housing units and several hundred rental assistance vouchers. The agency adopted a master plan for redevelopment of its properties in July 2010, but it has not been implemented.

Staff in the city’s Department of Neighborhood Development Services reviewed Virginia law with the city attorney’s office and concluded that the city does not have the enabling authority to create a redevelopment corporation.

“However, there are certain alternative options that are available for the City Council to pursue,” said Alexander Ikefuna, the NDS director.

One of these options would be for the city to create a land bank corporation, an ability granted by the General Assembly in 2016.

“Under a land bank corporation, I think the city could accomplish a lot in terms of property acquisition and resale,” Ikefuna said.

The city could lower local real estate taxes by up to 50 percent for properties owned by the land bank for up to 10 years. The savings could be used to keep the price of rent down.

Mayor Mike Signer suggested the city could create a land bank corporation with Albemarle County.

“Populations do move around a lot, and as we grow and press our boundaries, the communities are growing closer together,” Signer said. He also noted that supervisors and councilors signed a memorandum of agreement in 2016 to work on affordable housing issues.

City Manager Maurice Jones said the idea could be on the agenda for a joint meeting with the Board of Supervisors scheduled for Sept. 19.

The Housing Advisory Committee also has recommended that the city consider selling off its vacant or unused properties. Stacy Pethia, the city’s housing coordinator, is currently working to compile a list of city-owned properties that could become part of the land bank.

Earlier in the evening, the city agreed to sell a surplus property on Baylor Lane to Southern Development for $80,000. No restrictions to require affordable housing were placed on the purchase of that land.

Under another alternative, city code could be changed to allow private developers to tap into the Charlottesville Affordable Housing Fund. Currently, only nonprofit organizations can receive money from the fund, but state law gives Charlottesville the ability to make a change.

“Owners assisted in this manner must provide a minimum of 20 percent of the units for low- and moderate-income persons as defined by the locality for a minimum of 10 years,” reads a section of Virginia’s code.

Ikefuna said the fund would not be used as subsidy but instead would help leverage private investment. That could take the form of low-interest loans, gap financing or other mechanisms to encourage developments to rent at lower than market value.

Virginia law also allows for “housing rehabilitation zones” that can provide incentives, as well as regulatory flexibility. Housings costs might be reduced by waiving tax liens on delinquent properties to facilitate sales or by reducing permit fees.

“One of the benefits of this particular designation is that it provides opportunities to improve the housing inventory by taking on unproductive and vacant lots, as well as abandoned buildings, and turning them into productive properties,” Ikefuna said. Developers in these areas could be eligible for funding from the Virginia Housing and Development Authority.

Another alternative would be to add stronger incentives to build affordable housing into the city’s zoning code. This could take the form of increasing the number of “bonus” residential units.

Ikefuna said the city also could direct its federal Community Development Block Grant funding to a designated “community-based development organization” within a targeted area of the city, such as the Strategic Investment Area.

“The most important thing is to have a delineated low-income neighborhood that meets the criteria and, secondly, to have a viable nonprofit organization within that neighborhood or people in that neighborhood willing to come together to create one,” Ikefuna said.

This would be different from an organization such as the Piedmont Housing Alliance, which serves as a Community Housing Development Organization under federal law.

Galvin said she felt some of the options could help provide incentives for minority contractors.

“That could really be an engine for them to get more robust and be competitive,” Galvin said. “How do you spur the construction industry with minority representation? This could be one of those tools that the government could actively participate in.”

Galvin said the information gave her the sense that the city can create affordable housing units, independent of other agencies.

“We’d not be waiting on the CRHA or Piedmont Housing Alliance,” she said. The PHA is currently redeveloping Friendship Court as a mixed-income development.

Staff members will come back to City Council in October with more information.

Brandon Collins, of the Public Housing Association of Residents, said it was not news to him that the city cannot create a redevelopment corporation, but he was interested by the city’s research.

“It sounds to me like you guys are not really interested in partnering with CRHA on these efforts or seeing how this can help with the redevelopment of public housing,” Collins said, adding that he felt many of the ideas could help the CRHA become a developer of new affordable units.

“A conversation with CRHA is greatly needed about this,” Collins said. “They are searching for ideas and they need the help, and I think you guys should be in the business of helping them.”
 

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