City Council is forging ahead with a multi-pronged attempt to stymie the affordable housing crisis in Charlottesville. The moves call for building new affordable housing, while also creating incentives for existing landlords to rent at rates affordable for lower-income families, and developing a city-funded rental assistance program for residents who are most in need.
“The affordable housing problem in Charlottesville is not going to be solved by simply building new housing, so I’m trying to find different ways to attack the issue,” says Stacy Pethia, the city’s housing program coordinator, who presented the recommendations from the Housing Advisory Committee last week to Council. “We’re looking at every tool that we have. What can we do to build new units while preserving the affordable housing we already have? And then, find ways to encourage existing landlords to help out. I’m trying to attack it on every front.”
In 2010, the city set a goal to have 15 percent of its housing by 2025 be affordable, which for two-person families means earning at least $52,650 a year. In Charlottesville, 1,800 families—25 percent—make less than $35,000 a year, according to the Orange Dot report released in 2015. City Councilor Kathy Galvin said recently that only 20 percent of the 944 people who work for the city actually lives in Charlottesville.
Over the last seven years, the percentage of affordable units in Charlottesville has declined from 10.5 percent six years ago to 10.06 percent. During that time, 1,530 new housing units were created, but only 73 of those—fewer than 5 percent—were priced as affordable. And of the roughly 1,200 future units that have either been approved or are seeking approval from the city for construction, only 40 of them—fewer than 4 percent—are slated to be affordable.
Last week, councilors voted to move forward with several steps to combat the waning amount of affordable housing, beginning with creating a list of vacant city-owned pieces of land in residential areas. Because Charlottesville is landlocked and just 10 square miles, land is scarce. City Manager Maurice Jones has been tasked with identifying what city-owned land could be sold or leased to developers on which to build affordable housing. Jones was also asked to look into other possible land purchases for affordable housing sites.
Last week Council also approved the creation of a $900,000 rental assistance program. Under the current federal housing assistance program, the Charlottesville Redevelopment and Housing Authority is authorized to fund 533 rental vouchers. But because rental rates are so expensive in Charlottesville, the CRHA can only afford to fund about 400 of those. Funding for this new rental assistance program would come out of the Charlottesville Affordable Housing Fund, which Pethia oversees, and which received an additional $800,000 in the city’s budget for the next fiscal year, for a total of $2.3 million. (Over the next four fiscal years the CAHF budget will increase to $3.4 million per year, for a total of $16 million over the next five years, which is more than double the amount the city has funded in the past five years.)
This new city-funded rental assistance program is expected to pay for the monthly rent of about 120 people—at a rental rate of about $600 per month, per person. Still at question, however, is who would be prioritized to receive the funds—people who are homeless, living with disabilities, on the CRHA wait list, etc. Also, would housing in Albemarle County be possible if city rentals proved too expensive? How long would the funding last? And does CRHA have the capacity to run such a program? Council delayed the actual implementation of the program until September 16, when the HAC is expected to report back with a set of guidelines and a structure.
The third measure Council approved was the creation of a Landlord Risk Reduction Fund. A significant hurdle to creating affordable housing, says Pethia, is convincing landlords they won’t lose money by renting to people who earn low incomes. This new fund would be used to reimburse landlords for repairs if a rental unit is damaged, with the agreement that they continue to rent the unit at an affordable rate. The fund would also serve as a security deposit for some lower-income residents who can afford to pay the monthly rent on a new unit, but can’t afford the security deposit.
The final component included in the approved proposals was aimed at incentivizing developers to build more affordable units. The proposal would waive preliminary and final site-plan review fees, as well as building permit fees, for projects that constructed at least 15 percent of their total units as affordable. It’s expected to save developers approximately $5,000 per unit, which would in theory allow landlords to price their rents lower for those units.