The Charlottesville City Council held a work session on April 22, 2008 to how to prioritize money it has designated to help lower the cost of housing for people who cannot afford it. Council set aside $1.4 million in the FY2009 budget for new housing initiatives and spent two hours debating the best ways to maximize that investment.
“Back when we were working on the budget for this coming year, we had some discussions about the City’s affordable housing initiatives and there was a desire on the part of Council to bring a little more strategic focus to our affordable housing work,” said Mayor Dave Norris.
Download the podcast: Download 20080422-CC-AffordableHousing.mp3
Council also agreed in principle to use $1 million from the City’s Strategic Investment Fund to create a revolving loan fund that would go to developers to build new affordable units.
Norris said the work session was not an opportunity to discuss the details of the City’s initiatives, but was a chance for the Council to take a look at the big picture. To guide their discussion on affordable housing, staff developed the following questions:
Jim Tolbert, Director of the City’s Neighborhood Development Services, gave an overview of the City’s efforts to date to try to bridge the gap between the rising cost of housing and the inability of low-income residents to pay. He began by reminding Council’s vision statement includes language that addresses the issue:
“Our neighborhoods retain a core historic fabric while offering housing that is affordable and attainable for people of all income levels, life stages, and abilities.”
However, Tolbert sought guidance on how to turn that objective into material fact. He said the City has been working on the issue since the mid-1990’s, when Councilor Satyendra Huja held a position similar to Tolbert’s – Director of Planning and Community Development. The focus then was to invest in infrastructure, such as at Burnett Commons, as a way of jump-starting development in the City.
Tolbert said the City has helped keep 342 housing units “affordable”, either as rentals or as new units, by working with three key non-governmental agencies. The Piedmont Housing Alliance has received about $2.1 million to help low-income residents quality for loans. Tolbert said PHA has contributed about $30 million from its own sources. Habitat for Humanity received $844,000 from the City and contributed $3.9 million. The City has also worked with the Albemarle Housing Improvement Program (AHIP) to rehabilitate and preserve about 80 houses.
In the last year, the City has begun investing in a new program called the Charlottesville Affordable Housing Investment Program, which was initiated by Dave Norris soon after he was elected to Council in 2006. The City has paid $2 million into the fund further supporting these three agencies as well as Region 10, the Jefferson Area Board for Aging and the Dogwood Housing Limited Partnership. Norris said many of these organizations are also providing in-kind support.
Tolbert reviews “The Housing Continuum”
Tolbert said his staff needed direction from Council on what the criteria should be for the additional $1.4 million set aside in the FY2009 budget. To facilitate the conversation, Tolbert gave a top-to-bottom overview of the Charlottesville housing market by going through something called the “housing continuum.” That’s a framework that describes the gamut of people who need housing – from the person in an emergency homeless shelter all the way up to the person who can afford a house that costs over half a million dollars.
Tolbert said looking at the continuum can help staff and other parties figure out what the barriers are to
helping find other solutions.
In Charlottesville, groups like PACEM and the Salvation Army help provide temporary shelter to both the emergency homeless and the working homeless. However, the Salvation Army’s shelters are consistently full, and a new strategy is required.
“A lot of the group is in the working homeless and could go to some kind of subsidized rental ,” Tolbert said. “But we just don’t have enough of those.” The City has 376 public housing units, but there is a waiting list of 875 families seeking access.
The next step on the housing continuum would be an affordable rental at market value, followed by a subsidized rental backed up by Section 8 vouchers. However, Tolbert warned that many of these are run-down and pushing the limits of City code. There are also waiting lists for these opportunities as well, which poses a dilemma.
“If you’re down on [the lower end of the housing continuum] and you want to move up, public housing is not available to you because there aren’t enough units available, or you probably can’t find a Section 8 voucher because there’s just not enough of the Section 8 vouchers out there,” Tolbert. “The problem is as you start moving up the chain, [there is a] lack of availability.”
On the subject of home ownership, Tolbert referred to a Daily Progess article that recently reported a glut of homes priced in the $250,000 range. He said they were still out of the reach of many people who earn less than $40,000 a year, and the City might be able to do more to help out with down payment assistance to qualified homebuyers.
Council begins discussion
After Tolbert’s presentation, Councilor David Brown asked about the regional housing picture. Norris said surrounding counties have historically not had a lot of government subsidized housing.
“They’ve had a lot of affordable housing which often times takes the form of trailer parks, in Louisa and Fluvanna County for instance and rural Albemarle County,” Norris said. He gave credit to Albemarle County for creating a “robust” Section 8 voucher program, preserving affordable rental units such as Park’s Edge, and the recent approval of the Treesdale Park complex which will create 90 affordable rental units. But the Mayor also said the County’s strategy on homeownership could use a new direction.
“In their Neighborhood Model, they require developers to have a certain percentage [of units] that are affordable. For families under 80% of area Annual Median Income that translates to roughly a $190,000 townhouse in many cases, and so [the County] has sort of been flooded with proffers for $190,000 townhouses but not a whole lot below that.”
Tolbert said that strategy can also backfire when the time limits on proffers either run out or developers find a way to sell the units on the open market. He said in a community such as Charlottesville, student housing can drive up the rents higher when market conditions are a certain way.
After Tolbert’s presentation on the housing continuum, the discussion moved to consideration of six possible programs suggested by Neighborhood Development staff:
Councilor David Brown wanted more information on SRO units. Tolbert said they are units smaller than studio apartments, generally about 300 square feet or less without a stand-alone bathroom.
“Richmond is doing a lot of them, Norfolk is doing them, they’re doing them in old warehouses,” Tolbert said. Norris said that a group called Virginia Supportive Housing has expressed an interest in building one in Charlottesville.
Councilor Huja said he would like to strengthen the City’s down payment assistance program, and wanted the City to also invest in new construction.
“My worry is that we’re spending a lot of money in the market, and the net units [of affordable housing] are not increasing too much,” Huja said. He also said he wanted the University to build new on-Grounds housing to bring down the rental costs throughout the marketplace. That prompted City Manager Gary O’Connell to ask Tolbert for his assessment on whether the market for student rentals was over-saturated.
Tolbert said developers are still submitting new projects, but they tended to be closer to the Grounds.
“What we’ve seen is quite a few units that were rented to students in the past are converting to family rentals and actually some of them are being sold,” Tolbert said. He added a lot of recently built complexes in the County are “four bedroom ghettoes” that would be hard to re-purpose for families. These days, Tolbert said occupancy is pretty low.
How will Council measure success?
As the session wound down, Mayor Norris raised the final question: How would success be measured? Councilors Huja and Julian Taliaferro said they would like to measure it by the number of affordable units actually produced.
Brown said that would need to be further defined, but also said Council also needs to know when programs fail. For example, if a unit built to be an affordable rental were sold to a homeowner, would that be a failure? Taliaferro said he was interested in measuring how people are moving up the housing continuum. Councilor Holly Edwards said City needed to be able to gauge whether it were providing for financially stable and strong communities.
“The reality is, the only affordable housing we have is public housing, and one of our goals should be to start there and see where we can develop and move forward,” Edwards said.
Edwards also wondered if the City failed if it helped place someone into an affordable unit in the County.
“What resources are we willing to use and still count that as valuable, or is success measured by how many people we can keep in the City?” she asked.
“My answer to that would be yes, that is a failure if that’s their only option, and if we’re at a point where there’s no housing, and I think we are at a point where there’s virtually no housing in the City that a low-income working family can afford to buy, and so they’re having to move out to Louisa County, strictly from a smart-growth perspective, promoting sprawl and increasing reliance on single-occupancy vehicles, clogging our roads because they’re still coming back into town to work, and it’s increasing their budgets because they’re paying all the gas bills, from a smart growth perspective we need to have a housing stock here in our community that people can afford to buy,” Norris said.
Brown said he agreed, and wanted to have a discussion with other jurisdictions to plot out a unified strategy.
“As we take on more of the responsibility for affordable housing, low-income affordable housing, but because it’s green and more sustainable and because as the model of ‘drive-til-you-qualify’ is going to get harder and harder to do as gas becomes five dollars a gallon, why can’t we get other jurisdictions involved in recognizing that we’re taking on the responsibility?” asked Brown.
Council reached no firm conclusion at the meeting, but did agree to spend $1 million from the Strategic Investment Fund on a revolving loan fund to partner with developers for construction of new affordable units.
Staff will come back with a proposal with more details.
TIMELINE FOR PODCAST