Lessons on county housing policy

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In 2004, Albemarle County adopted an affordable housing policy requiring that any future development make 15 percent of its units available to those with household incomes at or below 80 percent of the area median income. This year, that policy was finally put to the test with the completion of the Avon Park development. Located on Avon Street Extended near Route 20S, the community is made up of 44 attached townhomes, and to meet the county’s requirement, developer Church Hill Homes made nine of its units available at lower prices.

“Our approach was, we would find the buyers as best we could and then go through that process just like we do with anybody else,” Jamie Spence, C.O.O. for Church Hill, told the Board of Supervisors during an October 3 presentation. Their first challenge was to find buyers that met the income requirement. Adjusted for this year, that meant that Church Hill could only sell to a household of two or fewer persons whose maximum income was approximately $48,000, or to three or more with an income of approximately $58,000.

Avon Park was the first new development to comply with the county’s affordable housing policy. Developer Church Hill Homes was able to get buyers for its nine “affordable” houses, but it took some wrangling.

With incomes that low, the county initially set a maximum purchase price of $172,000. Adjusted for this year, that price jumped to $190,000. But as Greg Slater, director of sales and marketing for Church Hill, revealed to the Board, the developers were forced to keep the price at $175,000. “If we would have sold these at [$190,000], none of the nine [purchasers] would have been able to buy,” he said.

That was due largely to the difficulty in obtaining the down payment necessary to purchase the homes encountered by the nine buyers, eight of whom were single individuals. The difficulties came despite the fact that the nine, weeded out from a pool of 50, had 700-plus credit scores. “Every single person was maxed out in the debt-to-income ratio,” said Bill Hamrick, a mortgage planner with C&F mortgage and a partner with Church Hill in finding buyers for the nine units. “If you went even $5,000 to $10,000 higher, they’re no longer homeowners.”

According to Hamrick, obtaining enough money required extensive wrangling, with a majority of the nine receiving the $16,500 the county provides for down payment assistance. Four of the buyers also received down payment assistance from the Association of Realtors, and all got at least a half a percent shaved off their mortgage rate from the Piedmont Housing Alliance.

While the developers stressed the need for more down payment assistance, they also revealed the satisfaction they got from assisting the nine buyers to purchase homes they normally could not have acquired. “I got to stand with them at their walk through before they were going to sign their loan documents,” said Slater. “I’ve never worked with more appreciative people.” Hamrick described buyers crying from happiness in his office. He paused to ask, “Why aren’t we doing more of this?”

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