Ways to mitigate effects of gentrification discussed
As Charlottesville officials, residents and developers wrestle with how to build more affordable homes for the city’s poorest residents, the local branch of a national land-use think tank held a forum last week to highlight one potential solution.
“One of the many tools at our disposal for helping address affordable housing is mixed-income development,” said Greg Powe, a Charlottesville architect who helped open a local chapter of the Urban Land Institute.
The concept of building mixed-income communities has been discussed for several years but only a handful of examples exist in the city and those are on privately held land.
The Charlottesville Redevelopment and Housing Authority and the Piedmont Housing Alliance both expect to redevelop land immediately south of the Downtown Mall. The city is currently studying potential zoning changes that will affect the future building possibilities.
“We’ve seen during the zoning workshops for the Strategic Investment Area that the subject of lower-income affordable housing is becoming important,” Powe said.
Proponents of the idea claim mixed-income communities can provide stability for children in low-income families.
“For kids who grow up in a very disadvantaged area, the chances of success later on in life are lower,” said Stockton Williams, executive director of the ULI’s Terwilliger Center for Housing. “We are also now seeing hard evidence that more equitable and more mixed-income communities are stronger economically.”
However, Williams acknowledged that the concept can be threatening to existing residents of subsidized housing and others who are concerned that redevelopment will lead to displacement.
“There is an understandable view among residents in lower-income areas that are gentrifying that redevelopment does not appear to benefit them and that new construction is pushing up prices and is part of the problem,” Williams said. “Those kinds of pressures can certainly increase rents and even push people out, but, overall, efforts to limit or stop development are only going to make housing affordability problems worse.”
Aakash Thakkar is senior vice president of development at EYA, a company that specializes in urban infill projects. He said the value of land has skyrocketed in urban areas due to rising demand, but those increases also can provide a stream of revenue to cover the costs of building units.
Thakkar said that when EYA was formed in 1992, the company only developed market-rate projects. That changed as housing authorities in the D.C. area sought partners to redevelop aging public housing sites and there was a market opportunity for private companies to participate.
Thakkar said federal grant programs such as Hope VI have been used to allow for redevelopment of public housing into mixed-income communities.
“The program was two-fold,” he said. “[It was] to deliver new high-quality public housing for public housing residents but also transforming communities into places again that would be more mixed-income, more diverse, more stable and that would encourage improvement in schools to help change the trajectories of some of these communities.”
Thakkar said local governments that want to redevelop low-income sites into mixed-income communities must build the political will first.
“If you have a developer and the developer is trying to run the community process, my view is that it’s not the best use of a developer’s resources and it’s not the best person to have in front of the room saying what should happen,” he said. “It should really be a community- and government- and nonprofit-driven process.”
One project, Chatham Square, took the former Samuel Madden Uptown public housing site owned by the Alexandria Redevelopment and Housing Authority and converted it to a mixed-income community. The process took a long time.
The ARHA began community discussions about the site’s future in 1988 and announced intentions to redevelop in 1993. After a request for proposals was issued in 1996, a residents committee sued for the right of first refusal to purchase new townhomes. ARHA received a Hope VI grant to redevelop the site but the project stalled when the original construction company pulled out. EYA was hired in 2002 and the project was completed in 2005.
In the case of Chatham Square, the request for proposals required a maximum of 170 units and required that all 100 public housing units would be retained at the site and distributed evenly throughout the site.
However, when the project was completed, 52 public housing units were replaced on site and another 48 ARHA units ended up being built nearby.
The $22 million project was funded through the sale of market-rate townhouses with prices ranging from $700,000 to over a $1 million. The Hope VI program kicked in another $6 million and the rest was financed through low-income housing tax credits.
“They sold us land and we paid $11 million for it,” Thakkar said. “That went into the kitty to build back the affordable housing units which we in turn built for the housing authority.”
The complicated funding mechanism was necessary to allow families living in low-income homes to remain on the site.
“A family of four at 30 percent of [average median income] might be able to afford $700 a month,” Thakkar said. “In economic terms, you have this home that costs $2,500 a month just to build in a market-rate setting. That is why you need a subsidy of this magnitude to buy down the cost of building those affordable units.”
The affordable units are distributed throughout the site and tend to be smaller, Thakkar said. For instance, six affordable units were created in a space where four market-rate townhomes would have gone. Elsewhere, affordable duplexes were built above garages.
“We had to be creative with regard to land planning and architecture,” Thakkar said.
Thakkar said some neighbors complained about returning public housing units to the site.
“We stood together with the political community and the housing authority and said, ‘this is the location where these folks have lived for many, many years and they should continue to get the right to live here,’” he said. “At the same time, we acknowledged [neighbors], and public housing residents wanted a community on this site that is in keeping with the surrounding community.”
Thakkar said successful projects also need an integration process.
“The folks who are living [at Chatham Square] are of different backgrounds and of different means, so there’s a very strong homeowners’ association here made up of public housing residents, market-rate residents and workforce residents,” he said.
The case study offers one example of how to build a mixed-income community at a time when both the Piedmont Housing Alliance and the Charlottesville Redevelopment and Housing Authority are planning the future of their downtown properties.
The PHA is planning to redevelop Friendship Court as a mixed-income and mixed-use community where the existing 150 units for extremely low-income households would be rebuilt but also would continue to be subsidized at their existing rents. They would be built alongside a yet-to-be determined number of units that would be rented at market rate.
A master plan adopted by the CRHA in 2010 for the organization’s sites also anticipated building affordable units alongside market-rate units, but implementation has stalled. A redevelopment committee has been established and is continuing to study how the process might begin.