City Council funds affordable housing projects

The Charlottesville City Council voted Monday to fully fund requests for two affordable housing projects but also agreed to partially fund two other projects that had not been recommended by staff for funding.

“We usually have $4 million to $6 million in surplus at the end of every year,” said Councilor Kathy Galvin. “I want to find a way to do all four.”

The Charlottesville Affordable Housing Fund was created in 2007 to provide leverage for development projects geared toward low-income households. The city has allocated more than $16 million to the fund since then to help satisfy a Comprehensive Plan goal of having 15 percent of the city’s housing stock be guaranteed affordable to households that make less than 80 percent of the area annual median income of $77,800.

The city received a total of four requests from the fund.

“While all of those projects are very important and very worthy of city support, unfortunately, there’s just simply not enough money within the affordable housing fund to fund all of them,” said Stacy Pethia, the city’s housing coordinator.

Coming into the meeting, Pethia said the fund had a balance of nearly $4.5 million but the council has indicated support for several projects that may have not yet been finalized.

The council has agreed to set aside $250,000 for the Charlottesville Redevelopment and Housing Authority, another $900,000 toward a rental assistance program, $240,000 to the Thomas Jefferson Community Land Trust as well as other expenditures.

That has left a balance of $2.9 million for the council to spend this year on projects. Pethia said the total request for all four projects was more than $3.4 million.

Pethia made her recommendations based on a series of criteria that included cost per affordable unit, levels of affordability and the duration that each unit will be guaranteed to be affordable.

Based on that assessment, Pethia recommended $612,500 for the Carlton Neighborhood Housing project operated by Community Services Housing. The organization would use the money to rehabilitate 35 existing units that are restricted to households that earn less than 60 percent of the area’s annual median income.

The project is funded through low-income housing tax credits, as well as housing subsidies from the Region Ten Community Services Board that further make the units affordable for those with incomes less than 30 percent of the AMI.

“Many of the families that live in those units now earn an average of less than $9,000 per year,” Pethia said. “That is an income level that the community is really trying to push the city to help support.”

Community Services Housing has never sought city funding before so the units would be counted toward the goal of supporting more units.

City funding would translate to $17,500 per unit and would help cover the cost of improvements to the energy and water efficiency of the units.

“They’ve been in operation for quite some time and need some upgrades,” Pethia said. “This will also ensure that those units remain affordable for families for the next 30 years.”

Pethia’s second recommendation was to fund $ million on the third phase of Carlton Views, a mixed-income and mixed-use development that follows construction of the Blue Ridge Pace Center and an existing 54-unit apartment complex that provides affordable housing to families between 40 percent and 60 percent of AMI.

“This [new] phase of the project would include the construction of 48 income-restricted units again targeting households earning between 40 and 60 percent of the area median income,” Pethia said. The cost per unit to the city would be $30,000. Carlton Views also is seeking low-income housing tax credits for the project.

Pethia said funding these two projects would create about 90 new units of supported housing, helping the city come a little closer to meeting its affordable housing goals.

Before the meeting, several speakers had asked the council to support the two other applications.

The local Habitat for Humanity sought $480,000 to purchase land for future homes at an estimated cost to the city of $30,000 per unit. The Albemarle Housing Improvement Program asked for $905,656 to help between 60 and 70 existing homeowners preserve their homes through rehabilitation.

Pethia said there wasn’t enough funding to cover all four projects, but she offered to go back and review before returning to the council next month for its approval on rental assistance, creation of a landlord risk reduction fund and renewal of city support for the Dogwood Housing Limited Partnership.

“Given the outcome of those three presentation, as well as tonight’s decision, that will give me a better idea of exactly how much money is left in the fund,” Pethia said.

However, councilors wanted to find a way to allow the AHIP and Habitat projects to move forward.

Galvin said she calculated there would be $838,733 left if the council followed Pethia’s recommendations. She said the balance would fund at least half of Habitat and AHIP’s needs, but also said the city likely could find other money.

Galvin said the AHIP and Habitat programs can help fight gentrification by bringing more low-income housing into the community. She also said it was important for more low-income housing to be spread throughout the city.

“We’ve got to start getting more affordable housing in our higher-income Census tracts,” Galvin said.

Councilor Kristin Szakos expressed appreciation for Pethia’s recommendations because of their inclusion of supported rental housing.

“Nobody wants to build that, and here we have two developers who are building it and it would be foolish of us to not make that happen,” she said.

Szakos said staff should do what it can to find funding to move the AHIP and Habitat projects forward, even if the full requested funding is not made at this time.

The council approved a motion to allocate half of the funding requested by AHIP and Habitat with the provision that staff come up with the rest from elsewhere in the city budget. That will come before Council at a later date.