City Council briefed on housing options report

A shortage of housing options for well-off families in the city of Charlottesville has reduced the supply of homes for people with moderate incomes, according to a report from a national real estate firm.

“There’s an undersupply for those people earning over 120 percent of the median income,” said Lee Sobel, of the firm RCLCO. “They have high demand for housing within their income bracket, but they’re not being supplied, so what’s happening is that they’re moving into cheaper housing and crowding out the supply of homes.”

The city commissioned RCLCO to perform an analysis of the housing market in order to inform possible policy changes.

The estimated annual area median income is $84,100 for a family of four.

The report states that there are almost no new single-family homes being built at a price point of $250,000 or below.

“The average new home in the city is about $450,000 and that’s only affordable to households above 120 percent of the area median income,” Sobel told City Council on Monday.

Councilors wanted to know what could be done to create more affordable homes.

“A lot of people are thinking that when we do build new housing, it’s only for the higher tier of the 120 percent,” said Councilor Wes Bellamy. “How do we build housing for those on the other end of the spectrum?”

Sobel said communities can incentivize construction of more affordable options through planning.

“Gentrification is when people go and decide to build in a lower income neighborhood that does not have political strength to prevent it and it happens so quickly that planning has to catch up,” Sobel said.

In January, the council was briefed on efforts to meet a goal to increase the number of supported affordable housing units to 15 percent of the total housing stock. However, only 10.1 percent of the city’s total 19,937 housing units are available to people who qualify for assistance.

“It seems that the private sector is probably going to leap in to meet the high-end demand, but do you see that your report tells us we should be doubling down on our 15-percent goal?” asked Councilor Kristin Szakos.

Sobel said he was not asked to look at the goal, but said it was a great benchmark.

“It would not be a detriment to continue to focus on the goal,” Sobel said.

Sobel said the city could create policies to incentivize developers to pursue lower price points, but it will not be easy.

“There’s always a market for developers to work on affordable housing,” Sobel said. “The incentives sometimes have to be there and the infrastructure has to be there physically and politi-cally. There may sometimes have to be subsidies and a lot of nudging.”

Councilor Kathy Galvin said she thinks the city needs a similar goal for new units built to in-crease the supply of workforce housing targeted at people making between 80 and 120 of area median income.

“It’s important to maintain a healthy mix of housing and the fact that perhaps we’ve only been looking at one sliver of the housing pie is one reason why our housing market is out of whack, and we’ve not been producing the variety of housing that the full spectrum needs,” Galvin said.

However, the president of Habitat for Humanity of Greater Charlottesville said he disagreed with creating a separate category for workforce housing.

“The focus should be on policy changes and market interventions that increase the supply of affordable housing to lower-wage earners and promote housing types that meet the demands of upper-income individuals,” said Dan Rosensweig.

Attorney and activist Jeffrey Fogel said he found the study lacking and told councilors the city should be using its own resources to create more housing.

“Your reliance on the private sector to produce affordable housing is just pie-in-the-sky, and it’s not going to happen,” Fogel said.

The Charlottesville Redevelopment & Housing Authority owns and operates 376 supported units. A master plan to redevelop the properties was adopted in 2010 but has not been implemented. The agency is seeking a new executive director.

The RCLCO report will be sent to the Housing Advisory Committee for its input on what recommendations should become policy.