Tag: Real Estate Weekly

The draft zoning map for Charlottesville points the way to a dense future for the city, all in the name of providing affordable housing. But the existing zoning still provides opportunities for additional residential density for those who can pay for it. Sometimes that means removing houses.  

For example, a house built in 1893 at 704 Bolling Ave. in Belmont was demolished to make way for two new structures. Construction on the first, an accessory dwelling unit allowed under existing zoning at a cost of $195,000, began before the 19th-century building was torn down. 

The work description for the demolition permit, issued on December 22, stated asbestos in the home would be removed prior to demolition. The toxic material was commonly used in construction for fire protection before its carcinogenic properties were realized, and all demolition or renovation requires a certificate describing whether the material is being handled correctly. 

The cost to tear down 704 Bolling is listed in the application as $43,815. The property was last purchased in June 2021 for $400,000. 

While the property does not have any historic protections, it was built by the Belmont Land Company as part of one of the first expansions of Charlottesville in the last decade of the 19th century. The name Bolling comes from one of the vice presidents of that firm.

Another house at 615 Bolling Ave. sold on January 30 for $760,000, after extensive renovations, for $180,000 over the 2023 assessed value. The original house was built in 1920 and last purchased in January 2021 for $165,000, or about $50,000 under the assessed value that year. That purchaser began work, but was told to stop because the asbestos certificate had not been turned in. Only then did the owner apply for building permits for renovations of the existing house, as well as construction of a one-bedroom accessory dwelling unit. 

A third house on the street that was also built in 1920 will meet the same fate as 704 Bolling. A firm with the name Antsy Me LLC purchased 922 Bolling Ave. for $322,000 on June 30, 2022, and was issued a demolition permit this month.  

Under the draft zoning code, all three properties on Bolling Avenue would be zoned as Residential-A. That would allow three units on the property if the existing structure is torn down, but four if the existing structure is kept. 

The current president of Preservation Piedmont says those new rules will likely result in more demolition because there are no incentives. 

“There is such a desire here, as elsewhere, for upscale residential single-family construction despite the ordinance‘s stated intention to increase other types of housing,” says Genevieve Keller. “Those who can afford to buy or build right now appear to be favoring single family dwellings.”

The change could make demolitions more common, but it’s not cheap to take down a house. In the past year, the demolition of 707 Forest St. cost $10,000. The takedown of 128 Harmon St. was $25,000. 

Teardowns and renovations are nothing new in Charlottesville. In November 2021, a firm called Daddy Rabbit bought a house at 903 Charlton Ave. in the Rose Hill neighborhood for $160,000, and more or less gutted the structure to make way for new residents. The house sold last November for $525,000. The previous occupant had lived there since 1950, until her death in April 2021. 

That particular property is also zoned Residential-A, but the Future Land Use Map classifies it as “Sensitive Communities.” That means additional rules are supposed to be written to stop displacement. 

There are many who state with certainty what will happen under those new rules. The reality is, the future of Charlottesville will be built parcel by parcel, including continued removal of structures people have called home for generations. 

“Our last affordable houses such as 922 Bolling are the low-hanging fruit for teardowns,” Keller says. “But even so, the loss of embodied carbon and human toil is surprising when a buyer decides to demolish a house with a brand new roof, fresh paint, and new appliances.”

Twenty years ago, Charlottesville City Council upzoned West Main Street to clear the way for taller buildings that would allow for more people to live close to the Downtown Mall and the University of Virginia. 

That vision began to be realized 10 years later with the construction of the Flats at West Village, a development that prompted council to spend millions to develop streetscape guidelines for West Main Street to make it a more enticing place. 

The price tag to implement the project grew to over $50 million, and was discarded by City Council last year in favor of spending local infrastructure dollars to renovate Buford Middle School. 

The Flats was followed by two other luxury apartments targeted at students, as well as two hotels. Another developer transformed the vacant property behind the Blue Moon Diner into another high-end residence. The former University Tire next door will also soon be developed. 

While the multimillion dollar streetscape won’t be built, that exercise did result in a rezoning that lowered maximum building heights. The maximum east of the bridge is now 52 feet tall and 75 feet to the west. But that’s about to change. 

Last week the city released the first module of the draft zoning code, and the draft map would restore the ability of developers to build high. The roadway east of the Drewary Brown Bridge would be zoned as the futuristic sounding CX-8, which stands for Corridor Mixed-Use 8. 

That would allow 114 foot-tall buildings with an option to go as high as 142 feet if there are enough units reserved for households making less than 60 percent of the area median income.  The details will be further fleshed out this spring, but in the new zoning, developers will have to designate one unit in 10 as affordable. 

That changes the perspective on properties that sell along the street. Earlier this month, a firm called GH Charlottesville VA purchased the former Greyhound station on West Main Street for $2.42 million. In December, Twenty Lakes Management LLC acquired similar properties all across the country for $140 million from a British transportation company. In the same city block, a former church built in 1867 that has housed the Music Resource Center remains up for sale.

But not all properties that are purchased are torn down for redevelopment. In February 2020, an individual bought 320 West Main St. for $750,000 from the Pregnancy Centers of Central Virginia, and the two-story building was converted to office use. 

Most of the properties to the west of the Drewary Brown Bridge are zoned for CX-5, which would very closely retain the existing height limits. That would technically make the Flats and the Standard non-conforming structures that could not be built in the future unless they had affordable units on site. 

One area real estate broker said he’s hopeful more people will be able to live on West Main or elsewhere throughout the city. “The growing companies that are currently based in Charlottesville have a difficult time recruiting and retaining talent, in large part because there are not enough housing options,” said John Pritzlaff of Thalhimer | Cushman Wakefield.

For the second year in a row, the average real estate assessment has increased by double digits. 

Residential parcels increased by an average of 11.52 percent, based on 15,148 taxable properties. Commercial properties went up an average of 12.16 percent, and that includes apartment complexes, retail, and office space. When you throw in new construction, the overall average increase comes to 12.33 percent. 

Nearly 98 percent of all properties in Charlottesville went up in value, with just over 1 percent declining. 

As we wait for more details on how those assessments shook up, it’s a good time to look at the December numbers for property sales in the region. 

“The median sales price in December was $422,450, up 5.7 percent from the previous year, a price increase of $22,950,” reads the latest report from the Charlottesville Area Association of Realtors. 

Those numbers are also based on lower sales volumes. There were 29.6 percent fewer homes sold in the last month than in December 2021. 

Drilling into the city, only 39 homes were sold in Charlottesville compared to 55 in 2022. The median sales price increased from $406,000 to $468,000. One prominent example of the increase in valuation is the $270,000 sale of a duplex in the Orangedale neighborhood on December 19. That unit had been flipped by an entity called Aspiring Developments, which had purchased it for $140,000 in June. 

December also saw other sales that were well over the 2022 assessment. A condominium on Douglas Avenue sold for $950,000, or nearly 19 percent over the 2022 figure of $441,000. A house on York-town Drive sold for $715,000, 62.13 percent over. The 2023 assessment, however, is at $646,700. 

As for new construction, a recently built house on Lochlyn Hill Drive sold for $843,804. The 2023 assessment on that home is $834,900. 

At the end of December, Charlottesville had the fewest active listings with 61. 

Sales were down sharply in Albemarle with 115 sales compared to 189 the previous year. However, the median price increased 21 percent to $547,459. Earlier this month, the county announced an average assessment increase of 13.46 percent. 

One change over December 2021 is a higher number of homes available. There were 740 active listings at the end of the month compared with 436 a year previously. 

But not all communities had the same trends. Median prices went down in Greene County by 10 percent, dropping from $350,000 to $315,000. That’s based on 14 sales in 2022 compared to 27 in 2021. There were 66 active listings at the end of the month. 

The number of homes sold in Fluvanna County increased by six with 44 purchases. The median sales price increased from $305,504 to $359,995 with 99 active listings on December 31. Louisa County had 57 sales, a 23 percent decrease over 2021. The median went up from $335,000 to $375,000 year-to-year. Nelson County also saw a decline in median sales price with a 6.6 percent decrease from $417,500 to $390,000. 

Charlottesville is completely surrounded by Albemarle County, which means there are bound to be several areas where land-use decisions made in one place affect the other—or vice versa. 

One of the places in the new Future Land Use Map where this comes into play is the conversion of around three dozen parcels in the city’s Greenbrier neighborhood from low-density residential to urban mixed use corridor, something that’s intended to encourage higher-intensity mixed use development. 

Some of these properties are the only ones in the city that front Rio Road, where 35,000 vehicles pass a day according to 2021 estimates from VDOT.  In all, that stretch is about 0.15 miles long. 

Other properties with this designation are along Tarleton Drive, where other lots are among several dozen more that have been converted to medium-intensity residential. All of these properties are currently single-family. 

The Zoning Diagnostic + Approach report released last summer envisions buildings up to five stories for some areas with this designation, though this is a rare example of land going from the lowest density allowed to one of the highest. 

Some had suggested more density in this area during the Comprehensive Plan rewrite back in 2013, because of the existence of businesses directly across the street in Albemarle County in what’s known as Gasoline Alley. The Places 29 Master Plan adopted in 2011 describes the county properties as being a future “neighborhood service center.” Other county properties to the northwest are “neighborhood residential density.” 

The city retained the lower density 10 years ago, but went much bigger in the new plan. 

“One of the important concepts of the Comprehensive Plan is to promote walkability and the opportunity for the incremental growth of new commercial spaces,” says James Freas, the city’s director of Neighborhood Development Services. “To that end, the plan sought to identify locations where the land use map could show potential new commercial spaces that would be in a close/walkable proximity to existing neighborhoods with good overall transportation access.” 

Someone walking from the intersection of Rio Road and Greenbrier Drive would have a half-mile journey to the Center at Belvedere. CATEC is a third of a mile away. Transit currently runs along the roadway. Albemarle County is likely to receive funding for improvements at Belvedere and Rio roads.

According to Freas, how development in this location actually occurs will depend on how the city’s new zoning code works. That process is underway now with the release of more detailed information happening later this month. 

“As we work on the zoning ordinance to implement this plan, one of our objectives is a set of rules that help to manage the interface between neighborhoods and new mixed use and commercial use,” Freas says. 

Only a few homes in the section up-zoned for urban mixed use have sold since the new plan was adopted in late 2021. All of those sales have been to couples or individuals, and not to private companies. None of the homes are currently on the market. 

Other areas of the city designated as urban mixed use corridor include East High Street, West Main Street, Jefferson Park Avenue, Ivy Road, Preston Avenue, and Fontaine Avenue Extended. 

There’s a long way to go until the end of 2023, but key metrics are coming in on how the real estate market fared in the last 12 months. But what impact will this new information have on transactions between now and December?  

“Assessed values are a number that people look at, and while by law they are supposed to be 100 percent of market value, they are a backwards-looking valuation, rather than a value that reflects today’s market,” says local realtor Jim Duncan. 

But those numbers will have an effect on property taxes for this year, and local governments will have to decide what they’ll do with the millions of dollars in additional revenue. 

Albemarle County set a record this year with average assessments up 13.64 percent over 2022. Last year’s assessments in Albemarle were up 8.4 percent. 

In Fluvanna, property values are up 13 percent for 2023. Figures for Louisa County will come out later this spring, as will assessments for Nelson and Greene. 

Charlottesville’s assessor has not released the figures for the city. The average increase in 2022 was 11.67 percent. Currently Charlottesville is expecting a $5 million surplus in the current fiscal year, but that figure will increase if the trend extends to the city. 

But even if the numbers are backward looking, they still inform understanding about how things have worked. Perhaps the large increase in Albemarle will fuel more appeals, but County Assessor Peter Lynch told the Board of Supervisors on January 11 that there were not many challenges in Albemarle last year. 

“They understood what was going on with the market,” Lynch said. “They knew people were bidding up the sales on houses and that the assessments would be higher.” 

Lynch also said he is aware that the increase may not be easily understood, given a general sense that recession is on the horizon. Yet, the assessment increases can be explained by a closer look at last year. 

The number of home sales was down in 2022, but sales prices continued to increase. Data compiled by the Charlottesville Area Association of Realtors shows that sales volume decreased 19.9 percent from November 2021 to November 2022 for the whole region, but the median sales price increased 9.6 percent over the same period to $399,000. 

If the bubble does burst this year, assessments in future years could be lower. In 2009, the average assessment was down in Albemarle 2.59 percent, beginning a decline that lasted several years until property values began to increase. 

There’s also the potential impact on rents. Lynch told Albemarle Supervisors that the assessments of apartment buildings went up 28.2 percent.

“Apartments are a hot commodity in the real estate market and its really the difference between that’s an income stream that is sought after,” Lynch said.

While every property’s case is unique, the more expensive the house, the larger the assessment increase is likely to be. Homes over $2 million have an average increase of 15.29 percent compared to 9.13 percent for properties under $150,000.