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Developers describe constructing affordable housing units in Charlottesville
Julie Anderson from Virginia Supportive Housing at Housing Summit, Feb. 16, 2018
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Credit: Emily Hays, Charlottesville Tomorrow
Julie Anderson, director of housing development at Virginia Supportive Housing, speaks about solving homelessness at the 2018 Charlottesville Housing Summit.
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Sean Tubbs | Saturday, February 17, 2018 at 9:35 p.m.

Two developers of affordable housing complexes in Charlottesville had the chance Friday to explain how their projects went from idea to reality.

“To be a developer, for-profit or nonprofit, your only job is to manage chaos,” said Rick Gregory, one of the cofounders of Richmond-based Fountainhead Properties.

The for-profit company built the recently constructed Carlton Views, a 54-unit apartment building on Carlton Avenue whose units can be rented only to people with disabilities whose income is less than 60 percent of the area’s annual median.

Gregory appeared at a panel at Friday's Charlottesville Housing Summit that featured two case studies for how affordable housing units can be built in Charlottesville. The other example was the Crossings at Fourth and Preston.

“It is 60 studio units for homeless and low-income adults from Charlottesville and Albemarle,” said Julie Anderson of Virginia Supportive Housing, a Richmond nonprofit that developed the project. “Currently, 35 of the units have rental subsidies for homeless individuals, so those remaining units are affordable to individuals making 50 percent or less of the area median income.”

VSH was founded in 1988 and has facilities in Richmond and the Tidewater area. Anderson said the group’s mission is to end homelessness by providing places to live for people who need them.

“The Housing First model has the idea that if someone is homeless, there are other barriers to housing such as disability, mental illness and substance abuse,” Anderson said. “They’re not going to necessarily be able to address those other compounding factors until they deal with the housing piece and are stably housed.”

Anderson said 98 percent of people who enter VSH housing do not return to homelessness. Residents can receive help getting health insurance, job training and help dealing with substance use,  as well as other services.

Carlton Views was built on the site of the former H.T. Ferron concrete factory directly next to Blue Ridge PACE, a health care institution aimed at elder care services. The program is operated by the Newport News-based Riverside Health System, the Jefferson Area Board for Aging and the University of Virginia Health System.

“It is a Medicaid and Medicare program that provides medical services for low-income persons over the age of 55 with disabilities,” Gregory said.

Gregory said Riverside asked his company to find a location for both Blue Ridge PACE and low-income housing units.

“Guess what? Charlottesville is pretty expensive,” Gregory said. “It took us a long time and we kept looking and looking to find a site that would be feasible for the amount of rent they wanted to be able to provide.”

“Affordable housing is expensive, especially affordable housing for persons with a disability, because lot of space is used up in making units wheelchair accessible,” Gregory said. “Both of these projects together cost just short of $20 million.”

The Crossings was built on the site of a former Region Ten Community Service Board building that the city of Charlottesville purchased in 2010 for $1.55 million. It then donated the land to VSH. Construction was completed in March 2012 and cost around $8.5 million, Anderson said.

Anderson said VSH finances projects through a variety of sources, including low-income housing tax credits, local community development block grants and funds from private foundations.

“Our most recent project in Richmond has 17 sources of funding which all have their own compliance rules,” Anderson said. “We are also looking for regional partnerships.”

In Richmond, Gregory said, Fountainhead has been able to combine low-income housing tax credits with tax credits to preserve historic buildings. That can allow for lower rents. But he insisted that low-income housing tax credits are essential to building a project that can have below-market rents for a lengthy period.

“Without them, [low-income housing tax credits are] really the only federal program out there that really makes a dent in new housing,” Gregory said, adding that lowering federal tax rates has lowered the value of those tax credits going forward.

“We all have a gap in our financing and now I’ve got a bigger gap,” he said. “Who could have predicted this six months ago? That’s the chaos.”

Gregory said a quarter of the units at Carlton Views are reserved for households that are at 40 percent of the area median income. Part of that amount is subsidized by PACE. U.S. Department of Housing and Urban Development estimates the median family income in the region to be $76,580 for fiscal year 2017, the latest numbers available.

Developers whose projects are funded through tax credits must agree to a use agreement stating the units will be affordable for a period of usually 15 years. Violators are required to pay fees to recapture the lost value.

In Charlottesville, 867 units of housing are under such agreements, including 150 at Friendship Court, 200 at Hearthwood and 167 at Greenstone on 5th. In Albemarle County, 1,173 units are subsidized through tax credits, including 96 units under construction off Fifth Street Extended in a complex called Brookdale.

Nancy Carpenter, the president of the Rose Hill Neighborhood Association, said local governments should step up with funding of affordable housing projects.

“We cannot equate people with numbers,” Carpenter said. “Sometimes we just have to swallow what we have to swallow and move on.”

A member of the crowd asked for the panelists to weigh in on a hypothetical situation where the city would purchase the skeleton of the Landmark Hotel and give the structure to an entity.

“Is that a developable place for affordable housing?” the woman asked.

In response, Gregory told a story about when he bought a car in what he thought was a good deal.

“I went home and went on the Internet and looked up that car and reports on it,” he said. “It said, ‘A great car and one of the best ever made, but if you got it for free, you paid too much.’ That is all I have to say about that.”
 

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