Attachment B

 

AFFORDABLE HOUSING POLICY ADVISORY COMMITTEE

Report on Implementation Strategies

October 2004

Revised November 11, 2004

 

Background

 

Upon the adoption of the Neighborhood Model by the Board of Supervisors, the Albemarle County Housing Committee was asked to develop policy recommendations to make affordable housing a part of new development in the County.  The first action taken was to request inclusion of Albemarle County in the enabling legislation providing the County more flexibility in creating affordable dwelling unit ordinances.  The legislation was approved by the General Assembly and reads as follows:

 

§ 15.2-2304. Affordable dwelling unit ordinances in certain localities.

In furtherance of the purpose of providing affordable shelter for all residents of the Commonwealth, the governing bodies of any county where the urban county executive form of government or the county manager plan of government is in effect, the Counties of Albemarle and Loudoun, and the City of Alexandria may by amendment to the zoning ordinances of such localities provide for an affordable housing dwelling unit program. The program shall address housing needs, promote a full range of housing choices, and encourage the construction and continued existence of moderately priced housing by providing for optional increases in density in order to reduce land costs for such moderately priced housing. Any project that is subject to an affordable housing dwelling unit program adopted pursuant to this section shall not be subject to an additional requirement outside of such program to contribute to a county or city housing fund.

Any local ordinance of any other locality providing optional increases in density for provision of low and moderate income housing adopted before December 31, 1988, shall continue in full force and effect.

(1989, cc. 634, 748, § 15.1-491.8; 1990, cc. 591, 834; 1991, c. 599; 1997, cc. 587, 607; 2001, cc. 18, 313; 2002, c. 151; 2004, c. 543.)

 

While legislative activity was underway, a subcommittee of the Albemarle County Housing Committee began working with staff to review options for developing a policy to promote affordable housing.  This review included researching information from other jurisdictions, both in and out of Virginia, which had affordable dwelling unit ordinances.  The research found that most programs in jurisdictions of other states had the ability to require affordable housing as a part of development although cities and counties in Virginia could not.  However, Virginia localities could develop policies and ordinances that would guide them if developers and builders voluntarily agreed to provide affordable housing. 

 

Without the ability to require affordable housing and with no clear policy in the County’s Comprehensive Plan, the subcommittee recommended an Affordable Housing Policy for adoption as a part of the Comprehensive Plan.  The policy defined affordable housing, stated the County’s policy with regard to target population groups, identified objectives, and recommended five strategies to address the objectives.  In late fall 2003, the Albemarle County Planning Commission conducted a public hearing on the proposed policy recommending forwarding the policy to the Board of Supervisors.  The Board held a work session and subsequently a public hearing after which they adopted an Amendment to the Comprehensive Plan for the Affordable Housing Policy which is included as Attachment 1.    Upon adoption, the Board requested that staff develop plans for implementing the policy with input from the real estate industry including those likely to be most affected – developers and builders.

 

Affordable Housing Policy Advisory Committee

 

The Committee held its first meeting in May 2004 to review the Committee’s charge and to discuss process for its work.  The next two meetings focused primarily on receiving and discussing information related to the affordable housing issues and to get an overview of the roles of Albemarle Housing Improvement Program (AHIP) and Piedmont Housing Alliance (PHA).  After this introduction, the Committee began work aimed at developing strategies to implement the Affordable Housing Policy by first identifying barriers for each of the five strategies.  Attachment 2 contains information on all barriers discussed for each strategy.   The following is a summation of those barriers, both real and perceived.

 

Who pays for the cost of affordable housing?  Members indicated their concern of bearing the costs of providing affordable units that may lead to increasing the sales price of other units in the development or builders/developers cutting their margin of profit to create affordable units.  The perception is that both scenarios are likely unless the cost of providing affordable housing is borne by the public.  Although there would likely be public aversion to higher taxes, the cost of providing affordable housing should be shared by the industry and the public.

 

Are resources insufficient to support affordable housing?  Localities that have had some successes in promoting affordable housing have done so using, in part, housing trust funds.  The typical housing trust fund has a source of dedicated funding not dependant on annual budget appropriations.  For those populations needing subsidy to afford rents, there is a lack of rental assistance from HUD.

 

Will County staff have standards that can be interpreted and implemented in a fair and equitable manner?  These standards would also include tracking compliance for equitable enforcement.  There is concern that some developers/builders may be encouraged to provide affordable housing and others will not. 

 

Can an implementation plan be developed that will be flexible enough to adjust to market needs/demands?  Will affordable target prices change with changes in variables that determine affordability (i.e. interest rates)?  The development community representatives on the Committee voiced a concern that they may be required to build units that if not sold to target populations would be more difficult to market to other populations.  They also indicated that this year affordability may be $175,000 but with rising interest rates affordability, as defined in the policy, will require a lower sales price.  Since affordable housing proffers are made well in advance of actual production, will the target population be able to afford the units when they are built?

 

If affordable housing is developed, how can the County control appreciation particularly when most purchasers expect to realize appreciation?  Any investment of public funding should be structured to be recaptured and reinvested in the original unit or provide assistance for another unit. 

 

How can density bonuses be structured to provide affordable housing?  The existing density bonus in the Zoning Ordinance has not been used to produce affordable housing and, if it had been used, there is no requirement on what population group is served. 

 

Can density bonuses be used to encourage increased density in redevelopment/ rehabilitation projects?  This may include in-fill opportunities.

 

Is focusing efforts on production of affordable housing the right approach?  Or, should efforts be focused on assisting families? Until demand is known it is difficult to determine the market for new affordable units.  Homebuyer counseling and other financial assistance programs may help create and identify the demand.

 

How would a partnership (public-private; for profit-nonprofit, etc.) work?  What benefit can a developer/builder get from a partnership?  Participants noted that each potential partner may have their own objectives that are not shared by other partners. 

 

Several barriers can be summed up as lack of communication.  This includes limited communication between groups including affordable housing advocates, builders/developers, and county staff.  Participants also noted the regional aspect of housing and the overall lack of regional coordination around the issue.  Some comments were made concerning the impact on communities that lack affordable housing.  These impacts include lack of diversity as well as inability of teachers, police officers, and others to live near those they teach or protect.

 

 

Recommended Actions to Address Barriers

 

The discussion of potential actions for implementing the Affordable Housing Policy was structured on the five strategies included in the Policy.  The Affordable Housing Policy Advisory Committee had access to the recommendations that were included as a part of the Housing Committee’s work and added some additional recommendations.  Both sets of recommendations are included in Attachment 2.  After all strategies were discussed and recommendations made, the Advisory Committee was asked to identify and discuss those recommendations that should be considered priorities and necessary in creating an initial plan for implementation.  The following identifies each of the priorities and provides a summary of the discussions for each.

 

Strategy # 1 - Develop and implement necessary regulatory and administrative functions for establishing affordable housing strategies in all applicable development review applications.

 

·         Create a tracking and monitoring system that displays critical affordable housing data in a visual, geographic format:   Several comments were made regarding the lack of current information and more specifically information on projected demand.  Data was provided based on 2000 U.S. Census data, 2003 property assessments, and 2003 sales of new and existing homes.  While this data provides some sense of trends and gives a snapshot in time, the Committee asked that more information be made available on needs and where those needs exist.

 

·        Reconsider density limits (bonuses), why they are not being utilized – look for housing opportunities, holes in the current market: The building/development communities want allowances for flexibility and creativity by the market, both new developments and existing stock, to meet affordable housing goals.  At the same time, they need some level of predictability in planning residential developments.  

 

·        Eliminate barriers and provide procedural incentives for those complying with the Affordable Housing Policy:  The development review process should be streamlined with expectations/requirements clearly identified and once those requirements are met, approval is assured. 

 

 

Strategy # 2 - Set specific targets for the development of affordable units for low- and moderate-income families with sufficient flexibility to allow for negotiation based on the development’s size, location, timeline, and nature of surrounding area.  At a minimum, 15% of all units developed under rezoning and special use permits should be affordable as defined by the County’s Office of Housing and Housing Committee or a comparable contribution should be made to achieve the affordable housing goals of the County.

 

·         Identify specific “proxies” for the 15% target that promote the County’s concept of affordable lifestyles:  Recognizing that housing cost is only one component in the cost of living, the Committee suggests that other elements of a development which lead to potential cost savings (limited need for vehicle use; low maintenance/increased efficiency of systems, etc.) be considered in review and negotiation of affordable housing proffers and be credited toward meeting the 15% target..

 

·        Allow a phased-in approach to the target that allows a close match between affordable housing created and families prepared to purchase:  This recommendation addresses two major concerns, the first of which is whether a market that has access to the resources exists for the affordable units.  The second is whether projects that have applications in process for development review should be subject to the affordable housing policy and, if so, to what extent.

 

·        Establish an “in lieu of” system that is simple and easy for developers to use in their initial planning and financial modeling:  If cash proffers or other comparable contributions are offered in lieu of affordable housing, a consistent formula should be established that allows developers and builders to calculate the cost of such proffers.  This allows for a comparison of the cost of proffers versus cost associated with providing affordable units.

 

·        Should there be a minimum number of units in a development before the policy is activated, or should the policy be applied at an appropriate scale in all developments?  Recognizing the potential cost to the developer/builder and the potential increase in the price of market-rate units to offset loss of profit in affordable units, the Advisory Committee suggests reviewing the impact of providing affordable housing in smaller developments.  In addition, the Board of Supervisors should consider administrative costs associated with creating and monitoring proffers.

 

Strategy # 3 – Develop strategies and mechanisms including security instruments for the initial sale of affordable units to promote long-term affordability and protect monetary investment from public resources.

 

·        Create a housing trust fund with dedicated source of funding (recapture investment and share equity on resale):  A housing trust fund would be the mechanism to hold notes and deeds of trust, receiving funds upon sale, and revolving those funds into other affordable projects.  Keep repayment terms simple – consider using deferred interest.

 

·        Have buyers/renters ready when  affordable units  become available:

 

·        Keep balance between available units and buyers ready to purchase:

 

·        Connect the housing trust fund to the cash proffer option:  All cash proffers in lieu of affordable units will be appropriated to the trust fund to support affordable housing initiatives.

 

 

Strategy # 4 - Expand existing partnerships/programs and create new alliances with the private sector including nonprofit and for-profit housing providers and lenders.

 

·         Promote community development financial institutions (CDFI):  Piedmont Housing Alliance is a CDFI but is not seen as effective in creating financing programs and promoting those programs within the region.  This is partially due to lack of experienced staff for mortgage lending and accessing funds for mortgage lending.

 

·         Review models from other communities:  Lessons may be learned from other effective CDFIs in determining appropriate structure and roles.

 

Strategy # 5 – Seek additional resources including those through state and federal governments for the development and/or financing of affordable housing.

 

·         Consider dedication of real property tax (1 cent) or some other form of dedicated revenue stream from local funds for the housing trust fund to support affordable housing:   In order for a housing trust fund to commit to proposed developments, a steady source of dedicated funds is necessary.  It is difficult to project what is needed to meet anticipated demand since we are embarking on this policy.  Once demand can be documented and projected and we have a sense of when, how many, and the cost of future available units, annual projections of resources needed can be made.

·         Explore tax credit/tax abatement options and recommend actions necessary for seeking enabling legislation.

 

 

IMPLEMENTATION RECOMMENDATIONS

 

Staff reviewed the Affordable Housing Policy Advisory Committee’s priority recommendations and proposed the following actions to address the priorities.  It should be noted that some actions can be implemented immediately while others need to be further developed by Community Development, Housing, and the County Attorney’s Office.  The Affordable Housing Policy Advisory Committee further recommends that the County establish a target of June 30, 2005 to implement all other actions deemed feasible.  If it is determined that one or more actions cannot be implemented, staff will prepare a report to the Board addressing issues and/or problems encountered. 

 

Attachment 3 shows the priority recommendations from the Advisory Committee, a list of staff and/or department representation to further define implementation actions, and some initial questions that may be used to structure discussions.  Three work groups will be convened with a facilitator and develop a timeline for completing their assigned task(s) with the June 30, 2005 target date guiding their work.  The Albemarle County Housing Committee, with recommendations from the Chief of Housing, will review and approve the proposed timelines and implement recommended actionsThe work groups will identify resources necessary to complete their work that may include adding other members including members of the Advisory Committee and others from both the public and private sector.  In addition, the teams may convene one or more focus groups for additional input on their recommended actions. 

 

Staff and the Affordable Housing Policy Advisory Committee recommend the following administrative and programmatic actions to be taken immediately.

 

  1. Planning staff and the Office of Housing will formalize a process to discuss the County goals for affordable housing with all applicants for rezoning and special use permits where residential development is proposed.  This process will include a discussion of options, as they are identified and are determined appropriate for the development that contribute to affordable housing.

 

  1. The Office of Housing will develop a Homebuyer Assistance Program (outline in Attachment 4) and execute an administrative agreement with the Piedmont Housing Alliance (PHA) for implementation.  The Program will initially be funded with $240,000 of general funds and $50,000 in federal HOME funds.
  2. The Office of Housing will seek SPARC funds from the Virginia Housing Development Authority.  These funds provide primary mortgages to income-eligible, first-time homebuyers at reduced interest rates.  The Office of Housing and PHA may collaborate on a joint application with a portion earmarked for the County of Albemarle.
  3. The Office of Housing and PHA will develop marketing tools to advise potential eligible families of availability of resources.  Initial marketing will include informational inserts with County employee monthly pay stubs, press release from the County, posting on the County website, and providing information to other employers for distribution.
  4. The Office of Housing will restructure its homebuyer counseling programs to provide an appropriate level of counseling to prospective homebuyers.  Applicants for counseling will be prescreened to determine need for and extent of counseling to prepare them for homeownership.  Counseling activities will be coordinated with PHA’s proposed Regional Homeownership Center’s homebuyer education programs.  Applicants interested in homebuyer counseling but not demonstrating the financial means to purchase due to limited income will be provided information and referred, as appropriate, to others to assist in improving their employment and income.
  5. The Office of Housing will work with the trustees of the Crozet Crossings Trust Fund and staff from the Department of Housing and Community Development to transfer all program income and receivables from Community Development Block Grants into the Albemarle Housing Initiative Fund.

 

These actions recommended for immediate implementation will address the following issues related to the barriers and priorities:

 

a.      EQUITY – Formalizing a process for discussing affordable housing with applicants for the development review process will ensure that all applicants are receiving information on the County’s goals for affordable housing and options for contributing to those goals.

b.      POOL OF READY PURCHASERS – Expanding housing counseling and providing down payment and closing cost assistance is expected to provide a predictable demand for affordable housing units.  Predicting demand and having prequalified families ready with some level of assistance could result in the pre-sale of affordable units.  Marketing of available programs will also lead to a better understanding of demand.

c.       HOUSING TRUST FUND – Combining all current available resources will be a significant step toward creating a Housing Trust Fund with dedicated sources of revenue.  While program income may not be readily predictable on an annual basis, investing that income in a trust fund will provide for more immediate deployment of known resources to support affordable housing initiatives.

 

 

The recommendations proposed for immediate implementation should be viewed as interim steps to address the County’s affordable housing goals.  They are also actions that can be undertaken administratively with existing resources.  Actions related to details in the development review process and options for proffers will require further development and, in some cases, may require changes in legislation and/or local ordinances.  Such actions will be brought forward with the appropriate steps including, but not necessarily limited to, any requirement for public hearings.

 

This report and recommended actions were developed and reviewed by the following

 

Albemarle County Housing Committee        Affordable Housing Policy Advisory Committee

David Paulson, Chairman                                  Leigh Middleditch, Chairman

Karen Lilleleht                                                  Frank Stoner

Joy Matthews                    Carol Clarke

Ida Lee Wootten                   Peter Thompson

Vito Cetta                       Thomas Boyd

Joshua Goldschmidt                 Ty Smith

David Schmidt                    Jamie Spence

Nat Perkins                      Jeff Gaffney

Leonard Winslow III                                        David Neuman

                                                                        Dean Wenger

                                                                        David Paulson

                                                                        Karen Lilleleht

 

Staff

Roxanne White

Mark Graham

Wayne Cilimberg

Greg Kamptner

Lauren Sandy

Ron White

 

 

 

 

 

 

 

 

 

 

 

 

 

Attachment 1

AFFORDABLE HOUSING POLICY

 

Approved by the Albemarle County Housing Committee

March 2003

Format Revised July 30 and August 8, 2003

Revised 10/17/03, 1/27/04

Adopted by Board of Supervisors

February 4, 2004

 

PREFACE

 

With the adoption of the Neighborhood Model by the Albemarle County Board of Supervisors and the charge given to address the inclusion of affordable housing in future developments, the Albemarle County Housing Committee created a Housing Policy Subcommittee to draft an affordable housing policy.  The subcommittee, staffed by the County’s Chief of Housing, drafted an outline of options to be considered in developing the policy.  In December 2002, the Housing Committee and Office of Housing convened three focus groups consisting of housing providers (nonprofits, lenders, and realtors), developers, and neighborhood representatives to discuss the needs, issues, and recommendations regarding affordable housing and public policy.  The result of this work and input is the following proposal offered as an affordable housing policy for Albemarle County.

 

Some previous work had been done leading up to the development of the policy.  The Housing Committee and Board of Supervisors first defined affordable housing in July and September of 1998, respectively.  The definition proposed in this policy maintains the intent of the previously-adopted general definition.  The Board, at the request of the Housing Committee, adopted a Resolution of Intent to Amend the Comprehensive Plan in November 2002.  Finally, although not

required for the adoption of this policy, the Board approved a request by staff to seek legislation allowing Albemarle County flexibility in creating and Affordable Dwelling Unit Ordinance.  This enabling legislation was approved in the 2002 session of the General Assembly.

 

OVERVIEW/BACKGROUND

 

Albemarle County’s population has grown from 68,000 in 1990 to 84,000 in 2000 (23.5%).  The number of occupied housing units in Albemarle County also grew with owner-occupied units increasing from 11,562 to 20,991 and rental units from 7,361 to 10,885 representing an 81.5% growth in owner-occupied units and 47.8% growth in rental units.

 

While the overall growth in occupied units appears to be consistent with population growth based on an average of 2.5 persons per unit, the trends support the concern that cost of housing for low- to moderate-income households is increasing.  These trends include cost burden and fewer affordable units being developed.  It should be noted that, according to 1999 income data from the U.S. Census, of 31,916 households, 15, 689 (49.1%) had incomes below $50,000.  Approximately 5,500 (17.3%) have incomes between $35,000 and $50,000.  These income levels would be equivalent to sixty- to eighty-percent of the area median income.   

 

Cost Burden - According to the 2000 U.S. Census over 2000 owner-occupied households (12.4%) had housing costs that exceed 35% of their household income, while 3100 renters (30.7%) had housing costs exceeding 35% of household income. 

 

 

Affordable Unit Development – According to County assessment records 11,632 houses in the County would be considered affordable based on affordability defined as a maximum sales price of approximately $175,000.  This represents 43.6% of all houses (26,668).  However in 2001 there were only 510 affordable resales dropping to 399 affordable resales in 2002.  There were 1404 total sales 2002 including 426 units (28%) defined as affordable (under $175,000).  Of the total sales, 318 were new homes of which only 27 of those units (8%) were considered affordable.  

 

Rental Housing – Most of the County’s affordable rental housing (maximum 2-bedroom rent of $725.00) was developed prior to 1998.  Four of these are multifamily properties totaling 539 units that have rents restricted by federal low-income housing tax credits.  Since 1998, three properties have been developed as unrestricted or family units.  While the properties have added over 450 new units only 20 units offer affordable rents.  In addition to these units, 97 units of elderly housing were developed with rents restricted by funding sources (bonds and tax credits).

 

Data indicates that the current trends will continue to add pressures on housing affordability that will impact 40% of the County’s population.  This Comprehensive Plan Amendment has been developed to outline objectives and recommendations that may be used to support the County’s desire to increase the number of newly developed units that may be affordable for all rezoning and special use permit applications. 

 

DEFINITION

 

Affordable Housing, in general terms means safe, decent housing where housing costs do not exceed 30% of the gross household income.  Housing costs for homeowners shall include principal, interest, real estate taxes, and homeowner’s insurance (PITI).  Housing costs for tenants shall be tenant-paid rent and tenant-paid utilities with maximum allowances for utilities to be those adopted by the Housing Office for the Housing Choice Voucher Program.

 

Affordable Housing is defined, for the purpose of this policy, as those houses affordable to the forty percent of the County population that have household incomes at or below 80% of the area median income.  For 2003, the maximum affordable home for purchase (80% median income) would be $172,000 and maximum housing costs (rent and utilities) for tenants would be $787 (50% median income). 

 

OBJECTIVES

 

It shall be the policy of Albemarle County to support affordable housing for

those who live and/or work in the County. In particular, the County will provide

guidance, resources, and incentives to the nonprofit and for-profit development

and financing communities to increase the supply of affordable housing (both

rental and homeownership) for households with incomes between 0 and 80% of area

median income by

                        

·        Promoting safe, decent, and affordable housing options for low- to moderate-income residents of Albemarle County and those working in and desiring to reside in Albemarle County;

·        Insuring variety/choice in housing and equal housing opportunities;

·        Creating and preserving safe, high quality and sustainable neighborhoods;

·        Understanding diverse housing needs and special needs of various populations; and,

·        Directing assistance to those populations least able to attain safe, affordable housing through the private sector alone.

 

The County should encourage the preservation of all existing affordable housing units County wide and the development of new housing in a manner consistent with the County’s Growth Management Policy.  The provision of affordable housing should be focused on the designated Development Areas to be consistent with the Growth Management Policy and to provide homes where a higher level of services and facilities (both public and private) are available to support residents.  Affordable housing may be provided in the designated Rural Area consistent with rural area policy and regulations.

 

 

STRATEGIES AND RECOMMENDATIONS

 

Strategy:

q          Develop and implement necessary regulatory and administrative functions for establishing affordable housing strategies in all applicable development review applications.

 

Recommendations

·        Develop process to measure and track existing affordable housing stock.

·        Update annual affordability figures for sales prices and rentals based on median income figures provided by the U.S. Department of Housing and Urban Development.

·        Assess and prioritize housing needs and associated supportive services required throughout the housing continuum.

·        Develop affordable housing production goals based on documented need/demand to address identified housing priorities and to insure that low- and moderate-income households have access to a sufficient supply of new and redeveloped housing units.

·        Promote the use of the existing density bonus ordinance as a tool to achieve affordable housing.

·        Work with other County departments and outside agencies to promote a streamlined and timely process for plan approvals.

·        Implement the adopted affordable policy to the greatest extent possible for all rezoning and special use permit applications.

 

 

Strategy:

q          Set specific targets for the development of affordable units for low-and moderate-income families with sufficient flexibility to allow for negotiation based on the development’s size, location, timeline, and nature of surrounding area.  At a minimum, 15% of all units developed under rezoning and special use permits should be affordable as defined by the County’s Office of Housing and Housing Committee or a comparable contribution should be made to achieve the affordable housing goals of the County

 

 

Recommendations

·        Develop procedures to work with developers to phase in affordable units within a neighborhood as described in the Neighborhood Model including the use of regulatory and monetary incentives available through the County, its partners and state and federal programs.

·        Work with the developers and nonprofit housing organizations to create procedures to phase in affordable units in a development and ensuring that such units are compatible with other homes in the development. Affordable units should include both units for sale and units for rent.

·        Promote a design criterion that disperses affordable homes throughout a development and encourages a variety of housing types. Use Master Plans developed in designated development areas as guidance for the creation of affordable units that are scattered throughout the development.

 

Strategy:

q          Develop strategies and mechanisms including security instruments for the initial sale of affordable units to promote long-term affordability and protect direct monetary investments from public resources.

 

Recommendations

·        Develop procedures for monitoring and enforcing occupancy and resale restrictions required by law and/or funding sources.

·        Establish a first right-of-refusal for the purchase of affordable units for rent or sale by the County and/or its nonprofit partners.

·        Develop deed restrictions and other mechanisms to insure affordable units developed with County incentives remain affordable for a specific period of time (control period).

 

Strategy:

q          Expand existing partnerships/programs and create new alliances with the private sector including nonprofit and for-profit housing providers and lenders.

 

Recommendations

·        Develop methods for reviewing the processes and effectiveness of prequalifying and certifying families for purchase or rental units produced. Utilize the nonprofit housing agencies and County’s Homebuyer Clubs to identify and prequalify purchasers and renters for affordable housing units.

·        Increase access to counseling by expanding the County’s homeownership education programs and utilizing similar services provided by others.

·        Continue to support nonprofit housing organizations and help clarify roles and responsibilities for each including, but not limited to, community development, housing development, affordable lending, and housing counseling.

·        Develop formal and informal procedures for dialogue with and among the private sector (for-profit and nonprofit) development community to increase production of affordable housing during the rezoning and special use permitting processes. 

·        Foster arrangements between for-profit developers and the nonprofit organizations to facilitate the purchase of lots and/or units and insure occupancy of units by eligible households.

·        Promote affordable housing by increasing participation with the real estate community including representative organizations (mortgage bankers, apartment council, and homebuilders).

·        Provide encouragement and incentives to nonprofit housing providers for the purchase, construction, rehabilitation and/or management of affordable owner-occupied and rental units.

·        Promote understanding of the regional nature of affordable housing issues and participate with neighboring jurisdictions in addressing these issues.

 

Strategy:

q          Seek additional resources including those through the state and federal governments for the development and/or financing of affordable housing.

 

Recommendations

·        Support tax credit applications for properties that preserve or create affordable rental units.

·        Develop strategies for effectively leveraging public and private funds to maximize resources for affordable housing including options for capitalizing a housing trust fund.

 

 

 

 

 

 


 

Attachment 2

Strategy:

q          Develop and implement necessary regulatory and administrative functions for establishing affordable housing strategies in all applicable development review applications.

 

BARRIERS

 

 

RECOMMENDATIONS

 

Housing Policy

Affordable Housing Committee

·         Develop process to measure and track existing affordable housing stock.

·         Update annual affordability figures for sales prices and rentals based on median income figures provided by the U.S. Department of Housing and Urban Development.

·         Assess and prioritize housing needs and associated supportive services required throughout the housing continuum.

·         Develop affordable housing production goals based on documented need/demand to address identified housing priorities and to insure that low- and moderate-income households have access to a sufficient supply of new and redeveloped housing units.

·         Promote the use of the existing density bonus ordinance as a tool to achieve affordable housing.

·         Work with other County departments and outside agencies to promote a streamlined and timely process for plan approvals.

·         Implement the adopted affordable policy to the greatest extent possible for all rezoning and special use permit applications.

 

  • Create a tracking and monitoring system that displays critical affordable housing data in a visual, geographic format
  • Determine appropriate target goals for home ownership in Albemarle County
  • Reconsider density limits, why they are not being utilized – look for housing opportunities, holes in the current market
  • Make it easy for non-profit housing organizations such as Habitat for Humanity, AHIP, PHA, etc.
  • Develop more defined levels of affordability and translate those into specific housing needs
  • Eliminate barriers, provide procedural incentives for those in compliance with the standards

 


 

Strategy:

q          Set specific targets for the development of affordable units for low-and moderate-income families with sufficient flexibility to allow for negotiation based on the development’s size, location, timeline, and nature of surrounding area.  At a minimum, 15% of all units developed under rezoning and special use permits should be affordable as defined by the County’s Office of Housing and Housing Committee or a comparable contribution should be made to achieve the affordable housing goals of the County

 

BARRIERS

 

 

RECOMMENDATIONS

 

General Comments:

 

Housing Policy

Affordable Housing Committee

·         Develop procedures to work with developers to phase in affordable units within a neighborhood as described in the Neighborhood Model including the use of regulatory and monetary incentives available through the County, its partners and state and federal programs.

·         Work with the developers and nonprofit housing organizations to create procedures to phase in affordable units in a development and ensuring that such units are compatible with other homes in the development. Affordable units should include both units for sale and units for rent.

·         Promote a design criterion that disperses affordable homes throughout a development and encourages a variety of housing types. Use Master Plans developed in designated development areas as guidance for the creation of affordable units that are scattered throughout the development.

 

  • Identify specific “proxies” for the 15% target that promote the county’s concept of affordable lifestyles
  • Allow a phased-in approach to the target that allows a close match between affordable housing created and families prepared to purchase
  • Create a continuum of affordable units so that not all units come in at the exact affordability level
  • Establish an “in lieu of” system that is simple and easy for developers to use in their initial planning and financial modeling
  • Should there be a  minimum number of units in a development before the policy is activated, or should the policy be applied at an appropriate scale to all development
  • Establish a firm time frame for placing people in the affordable units
  • Put some definition/guidelines to the size, location, timeline and nature of surrounding area categories

 


 

Strategy:

q          Develop strategies and mechanisms including security instruments for the initial sale of affordable units to promote long-term affordability and protect direct monetary investments from public resources.

 

BARRIERS

 

 

RECOMMENDATIONS

 

Housing Policy

Affordable Housing Committee

·         Develop procedures for monitoring and enforcing occupancy and resale restrictions required by law and/or funding sources.

·         Establish a first right-of-refusal for the purchase of affordable units for rent or sale by the County and/or its nonprofit partners.

·         Develop deed restrictions and other mechanisms to insure affordable units developed with County incentives remain affordable for a specific period of time (control period).

 

  • to Promote housing close to work/infrastructure and housing with lower maintenance costs to reduce overall living expenses
  • Maintain adequate supply of land for development – consider use of land trusts/land leases
  • Consider rehab of older stock as mechanism for affordable housing – maintain affordable housing stock
  • Create Housing Trust Fund with dedicated source of funding (recapture investment and share equity on resale)
  • Have buyers/renters ready when affordable units become available
  • Support investment in mixed-income, rental housing that requires a specified period for units remain affordable 
  • Provide second mortgages and deeds of trust with deferred interest
  • Connect the housing trust fund to the cash proffer option
  • Keep a balance between available units and buyers ready to purchase – dependence on data for this

 


 

Strategy:

q          Expand existing partnerships/programs and create new alliances with the private sector including nonprofit and for-profit housing providers and lenders.

 

BARRIERS

 

 

RECOMMENDATIONS

 

Housing Policy

Housing Advisory Committee

·         Develop methods for reviewing the processes and effectiveness of prequalifying and certifying families for purchase or rental units produced. Utilize the nonprofit housing agencies and County’s Homebuyer Clubs to identify and prequalify purchasers and renters for affordable housing units.

·         Increase access to counseling by expanding the County’s homeownership education programs and utilizing similar services provided by others.

·         Continue to support nonprofit housing organizations and help clarify roles and responsibilities for each including, but not limited to, community development, housing development, affordable lending, and housing counseling.

·         Develop formal and informal procedures for dialogue with and among the private sector (for-profit and nonprofit) development community to increase production of affordable housing during the rezoning and special use permitting processes. 

·         Foster arrangements between for-profit developers and the nonprofit organizations to facilitate the purchase of lots and/or units and insure occupancy of units by eligible households.

·         Promote affordable housing by increasing participation with the real estate community including representative organizations (mortgage bankers, apartment council, and homebuilders).

·         Provide encouragement and incentives to nonprofit housing providers for the purchase, construction, rehabilitation and/or management of affordable owner-occupied and rental units.

  • Promote understanding of the regional nature of affordable housing issues and participate with neighboring jurisdictions in addressing these issues
  • Promote existing partnerships and seek new alliances with the following:
    1. BRAC
    2. PHA
    3. UVA
    4. CAAR
    5. Outside entities like the Arlington Housing Corp.
    6. AHIP
    7. Habitat for Humanity
  • Create effective alliances with the private sector including financial institutions
  • Create meaningful communication opportunities, including informal opportunities for dialogue
  • Encourage regional information exchange
  • Promote community development financial institutions
  • Review models from other communities

 

 

 

 

Strategy:

Seek additional resources including those through the state and federal governments for the development and/or financing of affordable housing.

 

BARRIERS

 

 

 

RECOMMENDATIONS

 

Housing Policy

Housing Policy Committee

·         Support tax credit applications for properties that preserve or create affordable rental units.

·         Develop strategies for effectively leveraging public and private funds to maximize resources for affordable housing including options for capitalizing a housing trust fund.

 

  • Use cash proffers, or a percentage, to match contributions to a Housing Trust Fund
  • Consider dedication of property tax (1 cent) or some other form of dedicated revenue stream from local funds  for Housing Trust Fund to support workforce housing
  • Combine affordable housing initiative with matching dollars/leveraging
  • Develop funding mechanism and use to seek challenge grants from foundations, corporations, and individuals.  Public commitment has to come first.

 


 

Attachment 3

 


 

Strategy # 1 - Develop and implement necessary regulatory and administrative functions for establishing affordable housing strategies in all applicable development review applications.

 

 

Priority Recommendation

Staff Participants

 Completion Date

Elements/Resources

Create a tracking and monitoring system that displays critical affordable housing data in a visual, geographic format:

 

Lauren Sandy, Housing

GIS mapping

Assessment office

IT

 

 

Current sales data

Current assessment data

Integrated software

Reconsider density limits (bonuses), why they are not being utilized – look for housing opportunities, holes in the current market:

 

Community Development - Planning

Housing – Ron White

County Attorney

 

Keep existing ordinance language adopted in mid-80s.  Develop new approach to increasing density specifically for development of affordable housing for target population.

Eliminate barriers and provide procedural incentives for those complying with the Affordable Housing Policy:

Community Development (zoning, current development, planning, development area, transportation and inspections

Legal

 

What can be done differently?

Can a checklist be used that once all items are completed a developer can be assured of approval?

 

Questions

 

Density bonus

 

 

Eliminate barriers

·         What can be done differently in development review process?

·         Should normal process include discussion with all applicants for rezoning & SUP regardless of number of units?


 

 

Strategy # 2 - Set specific targets for the development of affordable units for low- and moderate-income families with sufficient flexibility to allow for negotiation based on the development’s size, location, timeline, and nature of surrounding area.  At a minimum, 15% of all units developed under rezoning and special use permits should be affordable as defined by the County’s Office of Housing and Housing Committee or a comparable contribution should be made to achieve the affordable housing goals of the County.

 

Priority Recommendation

Staff Participants

Completion Date

Elements/Resources

Identify specific “proxies” for the 15% target that promote the County’s concept of affordable lifestyles:

 

Housing

Community Development (planning and zoning)

Legal

 

Identify compensatory factors

Allow a phased-in approach to the target that allows a close match between affordable housing created and families prepared to purchase:

 

Housing

Community Development

Legal

 

Quantifying demand

Have buyers/renters ready when  affordable units  become available

Keep balance between available units and buyers ready to purchase:

 

Establish an “in lieu of” system that is simple and easy for developers to use in their initial planning and financial modeling:

 

Housing

Community Development

Legal

 

Formula for cash or other contributions

Establish a policy on size of project subject to affordable housing goals

 

Housing

Community Development

Legal

 

 

 

 

Questions

 

“Proxies” that promote affordable lifestyles

·         What are compensating factors that we could legally use in review of applications?  I know we would like to assess transportation costs but can we do that?  The only thing that comes to my mind is energy-efficient houses.

 

Phasing In

·         Should we consider development size at least initially?  Ex. Less than 50 units – different percentage.

Do we limit the number of affordable units in any one development on an annual basis?  Ex.  Northpointe is proposed as multi-year development (7-8 year build-out).  If they proposed 40 units, could we say “not more than x in any one year”?

 

 

 

 

 

 

 

 

 

 

Strategy # 3 – Develop strategies and mechanisms including security instruments for the initial sale of affordable units to promote long-term affordability and protect monetary investment from public resources.

 

 

Priority Recommendation

Staff Participants

Completion Date

Resources Needed

Create homeownership assistance program with available funds:

 

Ron White, Housing

December 2004

Approvals from Crozet Crossings Trust Fund trustees and DHCD

Seek dedicated funding to create a housing trust fund

 

 

 

 

 

 

 

Connect the housing trust fund to the cash proffer option: cash proffers are appropriated to trust fund

Ron White, Housing

Community Development

Legal

 

This will be added to the team working on Strategy #2.

 

Questions

 

Cash proffers

 

 

Strategy # 4 - Expand existing partnerships/programs and create new alliances with the private sector including nonprofit and for-profit housing providers and lenders.

 

 Priority Recommendations

Staff Participants

Completion Date

Resources Needed

Promote community development financial institutions (CDFI):

 

Housing

PHA

Legal

April 2004

 

Review models from other communities:  look for public/private partnerships and non-profit/for-profit partnerships

 

Housing

PHA

Legal

ongoing

 

 

 

Strategy # 5 – Seek additional resources including those through state and federal governments for the development and/or financing of affordable housing.

 

Priority Recommendation

Staff Participants

Completion Date

Resources Needed

Consider dedication of property tax (1 cent) or some other form of dedicated revenue stream from local funds for the Housing Trust Fund to support workforce housing:

 

County Executive

OMB

Leadership Council

September 2005 for FY06 budget – public hearing March 2006

 

 

Attachment 4

 

 

ALBEMARLE COUNTY HOMEOWNERSHIP ASSISTANCE PROGRAM

Draft Proposal

 

Source of Funds

$240,000 County of Albemarle:  $50,000 federal HOME funds

Eligible Use of Funds

Down payment and Closing Cost Assistance – Albemarle County properties only.  Purchaser must occupy the property as their primary residence.

Eligible Recipients

First-time homebuyers with gross household incomes not exceeding 80% of the area median income adjusted by family size as defined by HUD (AMI) that reside and/or work in Albemarle County (employees of UVa or its contractors are also eligible).  Residency and/or employment must be established for at least six months prior to application for assistance.

Eligible Properties

Albemarle County properties only with sales price and appraised value not exceeding limits set by VHDA’s 1st time homebuyer programs.

Loan Terms

All loans funded with County funds shall carry a 6% interest rate compounded annually with principal and interest payable upon sale of property or refinancing of debt.

All HOME funds will be deferred for ten (10) years and forgiven at the rate of 20% per year beginning at the end of the eleventh year – fully forgiven after fifteen years.

Loan Security

Generally 2nd deed of trust; may approve 3rd based on funding sources

Loan-to-Value

Determined by primary mortgage lender

Maximum Assistance - 

NOTE:  also see minimum housing debt ratios below               

For household with gross household income not exceeding 60% AMI, borrowers may receive up to 20% of purchase price or appraised value, whichever is less, in a deferred interest loan and up to $5000 additional in HOME funds.

For households with gross household incomes above 60% AMI and not exceeding 80% AMI, borrowers may receive up to 10% of purchase price or appraised value, whichever is less.

Minimum Housing Debt Ratios

Deferred payment loans will be structured to ensure that subsidies are appropriate for homebuyer’s needs.

For households with gross household income not exceeding 60% AMI, the minimum housing debt ratio shall be twenty-one percent (21%).

For households with gross household income above 60% AMI and not exceeding 80% AMI, the minimum housing debt ratio shall be 24%.

Homebuyer Contribution

All homebuyers must contribute at least one percent (1%) of purchase price.  Items paid at time of application (credit report and appraisal fees) and earnest money deposits may count toward the minimum contribution provided that these items are not included in the financing with cash back to the borrower.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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