Hundreds of Charlottesville households earning less than half of the area’s median income are severely cost-burdened, spending more than half of their income on housing costs, according to a long-awaited housing needs assessment.
The 114-page report compiled by Partners for Economic Solutions says there is a need for about 3,300 new affordable rental housing units to alleviate costs burdens, replace the city’s aging public housing stock and shelter homeless families and individuals.
On Monday, the Charlottesville City Council will receive a presentation on the report and an analysis on whether it is feasible for the city to incentivize the development of affordable units in taller buildings.
Stacy Pethia, the city’s housing program coordinator, says the city needs to shift its focus and invest more strategically in the development of affordable rental housing. “We need to think about how to invest in rental housing more so than homeownership,” she said.
Though the city has a robust affordable housing fund that has been used to support various housing nonprofits and other programs, Pethia said it’s mostly supported homeownership programs and projects.
“There’s nothing wrong with homeownership, but it can take a while for families at 30 percent or 40 percent AMI to reach a level where they can become homeowners. In the meantime, they need somewhere they can afford to live so they can put money aside for a modest down payment.”
According to the new report, the area median income, or AMI, is $53,600 for a single person and $76,600 for a family of four.
The report says households making less than 60 percent AMI are being forced to spend too much of their income on housing. As a result, those families and individuals are living in “overcrowded or substandard housing conditions, moving outside of the city to find less expensive housing or face homelessness.”
Of those making the median income or less, more than half of the need for rental housing is concentrated in households making less than 30 percent AMI, or 1,738 households. At 30 percent to 50 percent, there’s a need for 810 new rental units and households making 50 percent to 80 percent need 350 units.
The executive summary of the report identifies 25 points that describe the complexities of development costs, local demographics and the trend of increasing housing costs and demand for housing.
Among the highlights are the area’s recent population growth, the disparity between minimum wage income and the average rental cost in local apartments, the cost of single-family homes (which increased by 18 percent from 2013 and 2017), disproportionate housing cost burdens for African-American and Hispanic households and the 1,651 names on the waiting list for either public housing or federal Housing Choice Vouchers.
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On Friday afternoon, Legal Aid Justice Center attorney and Charlottesville Low-Income Housing Coalition associate Elaine Poon said the new housing advocacy group has yet to create a formal statement about the report, but she said she is pleased to see it finally released.
She said a representative of CLIHC will speak at Monday’s meeting to share their thoughts about the report.
Poon said one of her immediate takeaways after a cursory review of the report is the projection of an even greater affordable housing need.
“The need far exceeds the supply,” she said. “It shows the urgency of the problem. The city needs to act quickly.”
On Friday, Charlottesville Area Development Roundtable co-chairman Gregory Powe said he has not read the housing needs assessment report, but he commented on it and the “bonus height” analysis that also will be presented to the council on Monday.
The analysis found there’s only a limited ability for height bonuses to secure committed affordable housing units because local rent revenues “do not support the construction of mid- to high-rise residential buildings” unless they are high-end condominiums or student housing near the University of Virginia.
“There isn’t an effective way to incentivize the private sector to use that tool,” Powe said.
Though it might not seem useful now, he said it might be a useful concept to add to the city’s arsenal of supplemental assistance for development if land values continue to go up.
Noting that previous housing reports for the city have said that higher-income households own a considerable numbers of properties that would be affordable to lower-wage earners, Powe said there is also a need for more market-rate development in the city.
“The fact that market-rate housing is in short supply and high demand right now is driving up cost and gentrifying the market, which is actually further impacting affordability,” Powe said.
“We’re working to get through the development of the city’s Comprehensive Plan and then zoning changes to get rid of impediments to development of market-rate housing” he said. “That will alleviate the downward pressure.”
Powe said he’s now eager for the city to develop a new housing policy that will be informed by the report.
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With the report completed, the city’s Housing Advisory Committee is now working on the development of a housing development strategy. A public outreach process is expected to begin within the next few months.
In the meantime, Pethia said she and other city officials are working to develop more ideas for addressing affordable housing needs in the community.
She noted that the Charlottesville Redevelopment and Housing Authority is currently working on plans to redevelop properties at South First Street and South Sixth Street, as well as at Crescent Halls and Westhaven.
Stressing that the city needs to do more to support the creation of more affordable housing, she also noted that the Piedmont Housing Alliance is mulling how it will request support for the planned mixed-use redevelopment of the Friendship Court apartments, which could lead to a net gain of 150 new affordable housing units.
And Stony Point Design Build, which is planning to redevelop the historic Monticello Dairy building on Grady Avenue, also is considering a request for either a direct subsidy or a tax break to a support deeper reduction in cost for 15 of the 20 affordable housing units they plan to include in the project.
“It’s easiest for developers to provide affordable units at 80 percent AMI,” Pethia said. “If we could provide additional subsidies to bring that level of affordability down, I think we need to be looking at those options more often.”