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Monetary concerns are altering plans for the redevelopment of an affordable neighborhood in downtown Charlottesville, but not in the way one might expect.

When the Piedmont Housing Alliance began applying for low-income housing tax credits to redevelop Friendship Court, it realized that its application would be more likely to get tax credits if all future families met the federal definition of low income. That would require lowering the highest rents in their redevelopment plan.

“So, we put the question to the residents,” said PHA Executive Director Sunshine Mathon.

Friendship Court currently includes 150 homes supported by the U.S. Department of Housing and Urban Development’s Section 8 voucher program. The redevelopment plan would add 300 households at two tiers of likely higher incomes than current residents, whose incomes are $14,000 a year on average.

After discussing the tax credit application options, residents decided to lower the highest income tier from between 80 and 90 percent of the area median income to 80 percent of AMI and below — a maximum annual income of $68,250 for a family of four. PHA could charge that family approximately $1,525 per month to rent a three-bedroom apartment or townhome, not including utilities.

“Our goal is to build housing that people can feel pride in, that is beautiful, that is well-designed — but not luxury — so the rents that we can charge in that context were relatively close to that 80 percent rent level,” Mathon said.

Conversations about redevelopment have been going on for years at Friendship Court. Since 2017, the planning has been guided by an advisory council of nine elected residents and six members of the larger community.

Residents have advocated for redeveloping Friendship Court into a mixed-income neighborhood, but finding the right mix has been an ongoing conversation.

One of the residents’ goals for the future mixed-income neighborhood is to eliminate the separation and stigmatization current residents face.

“Our front doors all face each other. Our back doors face the outside, so it almost separates us from the rest of the community — as if we’re not there or we’re not allowed to mix,” said Tamara Wright, one of the elected members of the Friendship Court Advisory Committee.

Not all affordable housing advocates think mixed-income neighborhoods work. Charlottesville Mayor Nikuyah Walker has advocated for an income limit of 60 percent AMI, or $51,180 for a family of four.

“I am concerned about what happens when you put a market-rate family next to a lower-income family and the power dynamics of that,” Walker said at a City Council work session in November. “To say that the only way this community goes from what is perceived to be segregated and stigmatized, without addressing the larger issues of the community that has been created up until this point and that we are trying to undo, [is wrong].”

Wright said that the advisory council plans to create a board of residents to address friction between lower- and higher-income neighbors.

“Maybe individuals with higher incomes are complaining and doing things to push the lower-income residents out of the community. … That is definitely a fear, but we here at Friendship Court plan on having something in place to try to avoid that,” Wright said.

Wright said that she hopes their model will inspire other neighborhoods to become mixed-income. That change would not be necessary, she said, if low-income families had equal educational and career access.

“If you get those things worked out, then there really won’t be this huge division with class,” Wright said.

Applications for the tax credit program, the main federal subsidy available for building affordable housing nationwide, were due on March 14. Local applicants for tax credits, which also include Thomas Papa, the developer of Carlton Views, and the Charlottesville Redevelopment and Housing Authority, learned on March 19 how their applications stacked up against competitors’ claims.

According to the LIHTC self-scoring system, Friendship Court is the most competitive application in the north central Virginia pool. CRHA’s South First Street Phase One and Crescent Halls projects, which are competing in Virginia’s local housing authority pool, also scored high against other projects. Accessible housing projects like Carlton Views are ranked and funded differently, and less information is available about whether the project is likely to receive funding.

The Virginia Housing Development Authority, which oversees the LIHTC program for Virginia, will re-score the applications in May. PHA, CRHA, and the Carlton Views developers will know whether they have received tax credits by May 31.

Read the full debate about mixed-income housing at Friendship Court at cvilletomorrow.org/specials/friendship-court/story/mixed-income-housing.

This article has been updated to clarify expected rents for families making 80 percent of the area median income.