When the Albemarle Board of Supervisors rezones land for a new residential development, county policy requires developers to designate a portion of the units as affordable.

Since 2000, the policy has created a potential of more than 1,200 homes that are restricted to families or individuals with an annual income less than 80 percent of the area’s median.

However, very few actually have been purchased by qualified buyers, nor have many been built.

“Developers don’t really like to build those units,” said Mark Watson, director of development for the Piedmont Housing Alliance.

Instead, builders have the option to pay cash to avoid the requirement, with the proceeds going to affordable housing programs, such as down payment assistance, run by the county.

Watson said many developers prefer to contribute cash because they cannot make as much of a profit for selling a smaller house.

However, one developer is working with Watson on a pilot project that could lead to more such units being built, increasing the county’s stock of affordable housing.

“Paying money to a fund doesn’t get people nice housing now,” said George Ray, president of Insignia Development. His firm worked with the alliance and Stanley Martin Homes to make sure that six new units near Hollymead Town Center were within the county’s definition of “affordable.”

In October 2007, supervisors approved a rezoning for the 234-unit Willow Glen development near Hollymead Town Center. Ray agreed to designate 15 percent of the units as affordable.

The project lay dormant during the economic downturn, but phase one is currently under construction.

“The idea was to bring those three entities together and create a superior affordable housing product,” Ray said. “My part was to reduce the sale price of the land they are built on well below fair market value in order to help keep the final sale price as low as possible.”

The six affordable units are configured in a block of three-story townhouses that measure 1,728 square feet each.

Under the terms of the pilot, the housing alliance has agreed to purchase the units for $182,500 and is selling them at $211,250, the maximum allowed under county code. The purchase by the nonprofit alliance keeps the unit below market rate, which Watson estimates would be $243,000. The agency will use the difference in the purchase and sale price to cover administrative overhead.

Watson said developers have a hard time finding qualified buyers, and the pilot project is a chance to see if his agency can play a role.

“Since PHA is the housing counseling entity in this area, we actually have a pipeline of potential buyers that might be able to facilitate the sale of these units,” Watson said.

Watson said cost is an obstacle to the goal of providing affordable housing because strict financing rules require applicants to use no more than 30 percent of their monthly housing on a mortgage.

“By pricing any affordable unit at $211,250, since we’re tied to selling them below 80 percent annual median income, the only people that qualify are people at 78 percent and above,” Watson said. “The pool for potential buyers gets very small at that number.”

Watson said he will try to get the next round of affordable homes built at 1,200 square feet to bring the costs down and increase the number of qualified applicants.

One of the six units already has been sold, to an administrative assistant for a local pharmaceutical company. Watson said he hopes the rest will sell within six months.

Units elsewhere in the first phase of Willow Glen are selling for as much as $473,000.

Watson said the pilot represents a shift in the direction for the alliance back to being more involved with development of new units. He said the group has been pursuing other ways to advance affordable housing during the past several years of economic downturn.

“It was important that we still start to refocus on development of new housing because we had been away from it for a while,” Watson said.

“As we saw the whole housing market start to ramp back up in 2012, we started to look at the number of proffered units that were already built in Albemarle County.”

Watson said the alliance is permitted to sell each unit on the open market if no qualified buyer is found within 90 days of it being put up for sale. However, he said he doubted his board of directors would ever authorize that outcome.