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Council set to adopt SIA action plan

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An action plan the Charlottesville City Council is expected to adopt Monday could be a solution to a housing crisis some in the community have been calling on the city and developers to resolve for years.

After the council amended the city’s Comprehensive Plan more than two years ago to include the 330-acre Strategic Investment Area south of downtown as a guide for redevelopment, staff will give the council an action plan to implement the recommendations from a 2013 study conducted by consultants in conjunction with community stakeholders.

The action plan, developed by the city’s Neighborhood Development Services department, includes dozens of recommendations for zoning code changes, economic development and capital projects.

A major component among the recommendations, however, calls for a significant build-out that will concentrate density and add units to the city’s housing stock.

According to Councilor Kathy Galvin, who has been championing the plan since before it was adopted as city policy, implementation could be a boon for residents from a variety of socio-economic levels.

“I’m glad we have more robust recommendations for this plan now,” she said. “I’m thrilled about it.”

A recent report to the City Council said there’s a “barbell effect” in the city’s housing market. According to experts, the market for middle-tier housing is constrained while the supply of housing for many low-income and high-income families and individuals is not meeting demand.

The 2015 Orange Dot Project, an economic and housing report sponsored by the Greater Charlottesville Area Development Corporation, says the median family income in the city is $63,934. The report states that most of the city’s low-income residents live south of downtown, which is where the SIA is focused.

According to real estate consulting firm RCLCO, 54 percent of the city’s non-student households are earning less than 80 percent of the average median income.

Interpretation of the average median income varies. According to RCLCO, $65,800 is 80 percent of AMI for a family of four. Per city housing specialist Kathy McHugh’s report to the city earlier this year, the average median income for a family of four is $84,100.

In her presentation of the city’s annual housing report earlier this year, McHugh told the council that the city is not on track to meets it affordable-housing goal of increasing the ratio of supported affordable units to 15 percent of the city’s housing stock by 2025.

Affordable housing is defined as any housing for which total costs are no more than 30 percent of household income.

When the policy objective was approved by the council in 2010, there were fewer than 18,500 total housing units in the city. Now closing in on 20,000 units, the rate of supported affordable housing has dropped from 10.5 to less than 10.1 percent.

McHugh said the addition of new market-rate housing has made it difficult for the city to move the needle on its policy goal. She added that much of the funding that’s been allocated to the city’s affordable housing fund is often used to maintain the number of existing affordable units.

“I think aspirational goals are very important, but we need to be realistic about what we’re shooting for and where we want to be,” McHugh said in an interview. “We need to temper our expectations of that — not to say we should let off or not keep trying, but we need to be aware.”

“As our housing stock grows, our affordable housing stock needs to grow at least 15 percent along with it or else we are behind the new market-rate units being built,” she said.

While nearly 1,500 units have been added since 2010, the average $450,000 price tag on a new home is only affordable for those making more than 120 percent of median income, according to the RCLCO report.

The report says a family making little more than 80 percent of the median income can live in a house worth $250,000 and have it deemed affordable.

The Charlottesville Area Association of Realtors reported in January that the median sale price for a home in Charlottesville was $270,000 in 2015.

Lee Sobel, of RCLCO, told the council earlier this year there is an undersupply of housing for residents at the top and bottom of the economic spectrum.

Even with more market-rate housing the last few years, Sobel said many wealthy residents are purchasing or renting homes below their price range.

The RCLCO report says 28 percent of households in Charlottesville are making over 120 percent AMI, while 19 percent is in the 80 to 120 range.

“If you provide housing at a higher price point, high-income families could release the supply of housing for people in that 50 to 80 percent AMI band,” he said. “Once those people have a little more breathing room, it’d help those below the 50 percent level.”

Galvin has suggested the city could pursue and track goals for other tiers of housing to avoid the barbell effect that’s constrained the mid-tier housing market.

“It could be easier to reach our goal because we’d be building more units,” she said, noting that she does back the city’s existing policy goal of having 15 percent of affordable units in the city supported at some level, either by public, private or nonprofit assistance.

The city’s Housing Advisory Commission is expected in August to provide the council with a full report of recommendations based on RCLCO’s report. Those recommendations are expected to guide some of the actions in the updated Strategic Investment Area plan.

New developments

Several of the sites envisioned for residential and mixed-use development in the original SIA document already have started to gain momentum.

The Piedmont Housing Alliance, a nonprofit that owns a minority share of the 12-acre, 150-unit Friendship Court apartment complex, announced last fall that it intends to acquire the property in 2018. Since the announcement, the PHA has been using a $350,000 grant from the city to begin planning for redevelopment of the site.

PHA executives have stated 150 affordable units will remain, but there has been no word whether more supported units will be added if the site is redeveloped as a mixed-income community that includes market-rate housing.

Farther south in the SIA, on Elliott Avenue, nearly 50 units are being built in the Burnett Commons III development. Construction of 18 of those units is being supported through a partnership between Southern Development and Habitat for Humanity of Greater Charlottesville.

Nonprofit and private-sector partnerships such as those could continue to be sought. Among the recommendations in the SIA action plan is the development of “market rate and affordable units in order to ensure the long-term financial viability for affordable housing.”

 “We need to figure out how to do that. We need to move in that direction,” Galvin said. “Government isn’t doing this kind of thing anymore. We don’t get the resources from the federal government that we used to.”

“Partnerships will make a big difference,” said Alex Ikefuna, director of the Neighborhood Development Services department. “No city can reach any kind of goal like that without that help.”

Also recommended in the action plan is the development of a Charlottesville Redevelopment and Housing Authority-owned property at the corner of Garrett and Avon streets into a mixed-income, mixed-use building. Known as the Levy Site, or Walker Garage, the project is reportedly contingent on CRHA, which is an entity autonomous of the city.

Ikefuna said a plan for the project has yet to be developed, but will be soon.

Public housing

Recommendations for immediate action include revitalizing Friendship Court, as well as the Strategic Investment Area’s three public housing sites — Crescent Hall, Sixth Street and South First Street — and implementing development- and growth-friendly zoning code changes.

Among the plan’s recommendations are that the metal fence at Friendship Court be removed. The plan also calls for utilities and other infrastructure — such as playground fences and heating and air conditioning units — at the public housing sites be repaired as soon as possible, if broken.

Residents of public housing in recent weeks have said conditions at the sites have stayed in poor shape as there’s a dearth in maintenance and property management staff. Julie Jones, CRHA board chairwoman, said the authority is working to improve the situation.

“Frankly, those issues are always ongoing for our properties,” Jones said. “While we have had recent staff turnover, management has prioritized the most immediate needs and is implementing a plan to address them.”

Among the staff vacancies is the executive director position. The action plan says hiring a director will be a catalytic component of the plan, as the new director’s leadership is expected to propel the authority forward.

“As noted in the report, many of the objectives require a broader community conversation and input from CRHA,” Jones said. “We look forward to being part of these discussions and anticipate our executive director will play an active leadership role in creating and carrying out plans.”

There is $1.25 million for the SIA in the city’s proposed five-year capital improvement program for fiscal years 2017-21. Furthermore, the council decided last week to fully fund the $1.7 million the Planning Commission recommended it allocate for the Charlottesville Affordable Housing Fund. 

Galvin said she expects the council will discuss a staff recommendation that a housing and community revitalization specialist, meant to coordinate the implementation of the SIA plan, be included in the city’s budget.

The council is expected to adopt a budget for the coming fiscal year April 12.

Chris Suarez is a reporter for The Daily Progress. Contact him at (434) 978-7274, csuarez@dailyprogress.com or @Suarez_CM  on Twitter.

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