The Charlottesville City Council is committed to funding redevelopment of the city’s public and publicly supported housing, potentially even if that commitment requires raising taxes or altering the city’s bond rating.
During a work session Monday, the council directed staff to present a “litany of options” available to ensure the first phases of redevelopment of the Charlottesville Redevelopment and Housing Authority’s properties and the Piedmont Housing Alliance’s Friendship Court apartments can occur.
“No option is, essentially, off the table,” said Councilor Wes Bellamy. “We have to look at [increasing] tax revenue, even if that’s a lodging tax. … There’s different ways we could do it, but we have to look at different funding streams.”
A recent assessment by Partners for Economic Solutions and the Form-Based Codes Institute found 3,318 families struggling with the costs of housing in the area. PES counted within that number 439 units that need to be replaced at three public housing sites — Crescent Halls, Westhaven and South First Street — and at Friendship Court.
“When this housing was constructed, it was never constructed to be long-term housing. Public housing was constructed to be a short-term solution. Social programs would kick in and we would eliminate poverty,” said CRHA Executive Director Grant Duffield.
The phases under discussion would replace a combined 313 units at Crescent Halls, South First Street and Friendship Court. The redevelopment teams are planning to build approximately 347 new affordable homes at South First Street, Friendship Court and the CRHA-owned property on the corner of Levy Avenue and Sixth Street Southeast.
City staff has begun to prepare the fiscal year 2020 budget, to be reviewed by the council in March. However, both CRHA and PHA are applying for federal Low-Income Housing Tax Credits in March to finance the projects, and they need assurance of local support before they apply.
“The money doesn’t need to be allocated, but the commitment needs to be in place,” said PHA Executive Director Sunshine Mathon.
The LIHTC program helps fund affordable housing projects by decreasing a private investor’s taxes by the amount they invest in the project. Applying for tax credits is a competitive process, but public and private housing sites compete in different categories.
PHA has asked the city for $17.2 million to $23.7 million to renovate Friendship Court, calculated based on the different types of tax credits the nonprofit could receive. CRHA has asked for $16.5 million to $26.1 million to redevelop Crescent Halls, South First Street and Levy Avenue, as well as an additional $300,000 to rehabilitate 12 units in need of urgent repairs at other sites.
Both projects were led by advisory committees with resident representatives. The committees chose the developer teams, learned about financing and models for affordable housing and defined what kinds of buildings they wanted for their future homes.
“Initially, I was thinking we would give a little bit of input here and there. … However, once we dove in, it was a tremendous amount of work,” said Tamara Wright, one of the nine resident representatives on the 15-person Friendship Court Advisory Committee.
Before the work session, city staff had planned to divert funds from the Charlottesville Affordable Housing Fund as well as funding from other buckets to CRHA and Friendship Court. That would leave the CAHF with $1.9 million per year and CRHA and Friendship Court with $15 million and $6 million respectively over five years.
“We need to stay within the debt limits in order to maintain our bond rating. To date, I have no instruction that new revenues are in play,” interim City Manager Mike Murphy said towards the end of the work session. “We’re pretty close to tapped out with the numbers that are in there today.”
Bellamy, Mayor Nikuyah Walker and Councilor Kathy Galvin promptly said that they were committed to the redevelopment projects and wanted to see the solutions that would allow them to completely fulfill the requests from the two projects.
Councilor Heather Hill cautioned that increasing property taxes could price other low-income residents out of Charlottesville.
“I think we need to understand what options we have … and what impact that has on the communities that we don’t want to be taxing out any further from the city,” Hill said.
Councilor Mike Signer left the meeting before he could comment on the conversation, which was occurring after the meeting’s stated end time of 9 p.m.
Walker and Galvin said that the work session should affect how the council does business outside of budget season as well.
“When funding requests come towards us for a variety of community needs, what are we going to prioritize? Because, again, you cannot do everything, and we have to do a better job at making sure that we are clear on what we are attempting to do in this time,” Walker said.
“It also shows to me the importance of making sure we have pretty robust revenue generation going on,” Galvin said. “We have to keep building things that generate revenue for us, so we have the revenue to pay for the debt service to cover the bonds. When we do approve a commercial project, it actually does wind up helping our affordable housing challenges.”
The City Council plans to hold its next work session on the fiscal year 2020 budget on Dec. 6.