The cost of housing continues to rise, but there is a large desire in the community for steps to be taken to preserve housing for those with lower incomes. That is translating into several large capital expenses throughout the area.
This week, Charlottesville City Council held the first reading of a plan to award the Charlottesville Redevelopment and Housing Authority $5 million for half the cost to purchase 86 affordable units across the city.
“It is a very strong likelihood that this portfolio will exit affordability if sold on the open market due to the current property values and increased land speculation around the rezoning plan,” said Deputy City Manager Sam Sanders in the staff report.
The units range from a $700-a-month efficiency on West Street to a three-bedroom apartment on Ridge Street that goes for $1,325. To give a sense of scale, the Department of Housing and Urban Development identifies the 2022 fair-market value rent for a studio at $1,024 a month and a three bedroom at $1,562.
The exact details are not yet known, such as where the $5 million will come from and what form it will take. A loan? A grant? But many of the properties will be within areas with more development potential under the future zoning.
The new funding would be on top of the $3 million in the next fiscal year for public housing redevelopment, with more projected in the future. The five-year capital plan also anticipates over $13 million for various subsidized units the Piedmont Housing Alliance is building at Friendship Court and two projects on Park Street.
Albemarle County has invested $3.2 million in Habitat for Humanity’s redevelopment of Southwood Mobile Home Park, and also helped secure $2.25 million in federal funds for site work in the first phase.
Government funding is not the only way to keep homes affordable to people. There’s also the land trust model, where one entity purchases the underlying property and a household purchases the improved structure.
The Piedmont Community Land Trust has worked on several projects in the community and had a portfolio of 30 properties at the end of 2022, according to its annual report.
“The community land trust model is the only permanently affordable homeownership model in the region, and we are able to sustain the affordability of our homes by retaining ownership of the land and our re-sale formula, which includes an appreciation share with our homeowners,” said PCLT Executive Director Shekinah Mitchell.
In late January, the entity purchased a newly constructed three-bedroom house in Avon Park for $243,750. On the same day, an individual paid the land trust $225,000 to become the resident.
The townhouse has a 2023 assessment of $370,500. The Albemarle County Assessor’s office does not consider this a valid sale, so it won’t have an effect on next year’s reassessment.
The land trust has five duplexes on Prospect Avenue that will come on the market this spring and summer.
The land trust model can also benefit from government funding for seed money. The entity received $240,000 from Charlottesville to purchase four lots on Nassau Street for new construction. One of the single-family attached houses has now sold twice with price points of $215,000 in February 2020 and $236,500 in March 2022. The latter transaction was 2.67 percent below the 2022 assessment. The 2023 assessment, however, climbed to $319,000.