Annual Housing Report
2007
and
Office of Housing
June 2008
On behalf of the Albemarle
County Housing Committee as well as the County’s community partners providing
affordable housing options to the citizens of
This report provides specific
data and information related to addressing housing issues in the county during
the past year, including increasing affordable housing opportunities as
directed by our Strategic Plan, preserving the existing stock of affordable
units, providing resources to make emergency repairs at homes throughout the
County and educating potential homebuyers in the process of securing financing
for home ownership. While there is much
progress that needs to be made in addressing housing needs in our community, efforts
over the past year have resulted in significant advances in proffered
affordable housing units on the market, availability of down payment
assistance, and construction of affordable rental units, among other successes.
In introducing this report,
it is important to take an environmental scan of what is currently occurring in
the real estate market, particularly as it relates to affordable housing. On the positive side, an analysis of MLS data
for property sales indicates a significant number of housing units on the
market priced at or below $200,000. A
recent review of multifamily rental properties also indicates a healthy
inventory of units (over 2000) which are deemed affordable to households with
incomes at or above fifty percent (50%) of the area median income (AMI) which
equates to households earning approximately $30,000 per year. There are,
however, opposing forces that temper the positive news. For those purchasing homes, obtaining a
mortgage is becoming increasingly more difficult. The recent credit problems plaguing the
housing industry have resulted in almost daily changes in the mortgage
market. Mortgage lenders are becoming
more diligent in their underwriting often seeking higher credit scores and
increased equity through higher down payment requirements. Unfortunately, this often does not represent
the typical client seeking affordable housing.
While the unit inventory may have improved, there are fewer options for
affordable mortgages.
With regard to rental units,
there is currently little vacancy in those deemed as affordable. One recent market study completed for a
proposed development indicated that the occupancy rate on affordable units was
approximately 98%. The limited supply of
affordable rental housing can result in competition for available units between
lower-income households and those who could afford more. In addition, according to The
State of Housing Report commissioned by the Thomas Jefferson HOME
Consortium and conducted by the Center for Housing Research at Virginia Tech, “college students help drive up rents in the
area" by combining financial resources of their parents who are
willing to pay a high rent per bedroom. The report estimates that 53% of the
rental stock in
Given the opportunities as
well as the challenges of our current environment, it is important to assess
our progress in 2007 and to note areas of accomplishment as well as places
where additional investment of resources, energy and attention are
warranted. The following report
summarizes our status at this point in time, serves as a springboard for
evaluating potential future directions, and is divided into the following three
sections:
- A review of production in housing programs
including
- Housing Rehabilitation
- Down Payment Assistance to Homebuyers
- Homebuyer Counseling
- Housing Choice Vouchers
- An analysis of outside capital leveraged as a
percentage of total funding for housing programs; and
- Recommendations/next steps to consider in further
developing and implementing the County’s Affordable Housing Policy.
HOUSING PROGRAMS PERFORMANCE REPORTS
The Albemarle County Office
of Housing directly administers the U.S. Department of Housing and Urban
Development’s (HUD) Housing Choice Voucher Program providing rental assistance
to very-low income households. The
Office also offers homebuyer education through its Homebuyer Clubs and
implements the County’s Affordable Housing Policy.
The following tables show
production activities for each respective housing program or initiative. All activities reflect calendar year 2007
with the exception of programs administered by AHIP which reflect the fiscal
year ending June 30, 2007.
Housing Rehabilitation & Emergency Home Repair
|
|
Housing
Rehab |
Emergency
Repair |
|
Completed Jobs |
31 |
49 |
|
# Persons Assisted |
69 |
54 |
|
|
$7,476 - $53,370 |
$0 - $39,780 |
|
Average Income |
$23,095 |
$17,309 |
|
Average % Area Median |
35% |
26% |
|
|
$3,350 - $102,148
(1) |
$8 - $4,445 |
|
Average Project Cost |
$18,314 |
$744 |
|
Total Project Costs |
$567,743 |
$40,932 |
(1)
Rehab also includes replacement housing when repair is
not feasible.
AHIP has generally completed
twenty-five to thirty-five rehabilitation projects a year primarily depending
on the amount and source of funding.
Their goal for FY2007 was twenty-five.
In fiscal year 2007, AHIP used at least nine different funding sources
to complete 31 projects. These sources
included local, state, federal and private funding. Approximately nine percent of the funding was
from family contributions.
AHIP projected 35 emergency
repair projects in FY2007 but were able to complete 49 with successful
fundraising activities with individuals and foundations. Local, state, and private funds accounted for
the total resources with approximately twenty-six percent of the costs covered
by family contributions.
In FY 2006, AHIP completed 25
rehab projects and 35 emergency repairs combined for a total of $527,865. The average income of households receiving
assistance was $27,600 and $17,300 respectively. FY2007 resources and project costs represent
a fifteen percent increase over FY2006.
Homebuyer Assistance Program
A key component to prepare
families for homeownership is homebuyer education and counseling. The Piedmont Housing Alliance (PHA) and the
County’s Office of Housing both provide various forms of education and
counseling. The County’s Homebuyer Clubs
will be discussed later in this report.
On average, PHA provides counseling to eighteen to twenty new clients
quarterly and maintains a caseload of over 500 active clients who are primarily
residents of the City of
PHA also administers the
Albemarle County Homebuyer Assistance Program and has been successful in
leveraging other down payment assistance dollars and below-market-rate mortgage
financing from the Virginia Housing Development Authority. The following table shows activity for the
program for calendar year 2007 in comparison to 2006.
|
|
2006 |
2007 |
|
# of Loans |
29 |
38 |
|
# of persons |
84 |
94 |
|
|
$18,593 - $57,767 |
$23,558 - $55,684 |
|
Average Income |
$30,806 |
$40,547 |
|
Average % of Median |
46% |
60% |
|
|
$446,037 |
$448,861 |
|
Other Assistance |
$424,100 |
$574,285 (1) |
|
Average Assistance |
$30,005 |
$26,925 |
|
Mortgage $ |
$4,256,679 |
$6,220,093 (2) |
(1)
Approximately 85% of other funding for down payment
assistance was federal HOME funds.
(2)
Seventy-five percent (75%) of the total mortgage funds
were VHDA SPARC mortgages secured by PHA for use in
The County’s primary homebuyer
education program is its Homebuyer Clubs.
At least two clubs are in session at any given time, meeting monthly to
learn about the home buying process, financing options, credit
issues/improvement, and budgeting. The
original eighteen month curriculum has been reduced to twelve months by
combining some of the sessions. In 2007,
sixty-nine families participated in Homebuyer Clubs. Sixteen families that completed the club
purchased homes – eight in
Housing Choice Voucher Program
The Office of Housing
administers the federal Housing Choice Voucher Program which provides rental
assistance to very low- and extremely low-income households. In 2007, approximately 480 families received
assistance totaling over $2.5 million which was paid directly to private
landlords. The following tables provide
a comparison of the program’s usage since 2005 and the monthly assistance paid
for that period.
VOUCHERS UNDER LEASE BY MONTH
RENTAL ASSISTANCE PAYMENTS BY MONTH
The number of vouchers under
lease began dropping in August 2007 from their high points. This was primarily due to the length of time
it was taking voucher holders to find a place to lease and the increased number
of applicants that were offered opportunities for vouchers who did not follow
through, likely the result of using a three-year old waiting list. As for those receiving vouchers, the main
reasons for not leasing were lack of income and credit issues.
In November of 2007,
In addition to the
administration of the Housing Choice Voucher Program,
Proffers
Since the adoption of the
County’s Affordable Housing Policy in 2004, over one thousand, six-hundred (1600)
affordable housing units have been proffered along with over $1.5 million in
cash. A list of proffers is included in Attachment A.
In 2007, the County received
$300,000 in cash proffers designated for homebuyer assistance. Nine units of proffered housing were also
delivered and sold to eligible first-time homebuyers. These townhomes, located in
While the Housing Committee
continues to work on ways to improve the proffer system for affordable housing,
particularly related to long-term affordability, one major revision to the
system was implemented in 2007. Specifically,
provisions to allow the County to request cash in lieu of affordable units at
the time of site plan approval were added to the acceptable proffer
language. This will allow the County to
have some flexibility if there is little or no market projected for the
proffered affordable units when they are built.
This measure could also provide an opportunity to receive cash proffers
that would support housing units that are not likely to be built under the
proffer system such as tax credit rental housing, transitional housing, and
emergency housing.
LEVERAGING LOCAL FINANCIAL CONTRIBUTIONS
While the effectiveness of
housing initiatives may be viewed through production numbers, the efficiency of
the investment of local funds can be viewed through the ability to
leverage. Approximately 800 families
received some level of assistance supported, in part, through the County’s
contribution of just over $1 million in operational support and program
funding. Of this amount, two-hundred and
ninety thousand dollars ($290,000) provided direct assistance to AHIP’s
Emergency Repair Program, the County’s Homebuyer Assistance Program, and Wood’s
Edge Senior Housing rental subsidies.
Approximately $575,000 supported the operations of Albemarle Housing Improvement
Program and the Piedmont Housing Alliance.
The balance of approximately $200,000 supported the operations of the
County’s Office of Housing. The charts
below illustrate the breakdown of the total funding used for housing
initiatives in 2007 by program area exclusive of County-funded operational
support.
The following chart
illustrates total funding by source for all housing activities completed in
2007 including operational support contributed by the County to AHIP and
PHA. The largest source, 45% of the
total expenditures, was VHDA loans to first-time homebuyers. These loans represent only those using the
County’s down payment assistance. VHDA
loans are actually private funds but have been shown separately from other
private funds.
The second largest category
was federal with approximately $3 million of the amount attributed to the
Housing Choice Voucher Program.
Fifty-two percent (52%) of
funds contributed to affordable housing initiatives in 2007 were from the
private sector.
LOOKING BACK
The Housing Committee
proposed four areas of focus in its 2006 report including the development of a
sliding scale for giving credit for affordable units in different price ranges,
revising the existing density bonus for clarification as a potential tool to
promote affordable housing, establishing a specific dollar amount for cash
proffers, and considering methods to promote long-term affordability of
proffered units.
To address these initiatives,
the Committee recommended the following:
- A sliding scale providing credit for a range of
sales prices to serve households up to 120% of the area median
income. The Board and Planning Commission provided direction to the
Committee to implement a sliding scale but cap it at household incomes not
greater than 80% of the area median income. The scale has been developed but there
has been no interest from developers to commit to providing affordable
units at lower prices.
- Revision of the density bonus to allow for up to
a 30% increase in by-right density provided that one-half of the
additional units are affordable. A Zoning Text Amendment was adopted by
the Board in October 2007 which made this revision and also defined
eligible purchasers and tenants for the affordable units and changed the
five-year affordable commitment on rental units to ten years.
- Establishment of an acceptable cash proffer equal
to ten percent (10%) of the defined affordable sales price. The Board and Planning Commission agreed
at a June 2007 work session to accept the recommendation to set cash
proffers at ten percent of the affordable sales price at the time the
proffer is made.
- Continuing to work on methods to promote
long-term affordability. Some ideas
under consideration are the use of deed restrictions, deeds of trust, and
a potential community land trust. A
Joint City/County Task Force on Affordable Housing is also discussing this
issue.
LOOKING AHEAD
The Housing Committee will
continue its work on promoting long-term affordability and begin examine ways
to promote the creation of affordable rental housing. The Committee is also awaiting a report from
the City/County Task Force for its recommendations in these areas and possibly
other areas that impact affordable housing.
Two development proposals
were brought forward earlier this year that would create 128 new affordable
rental units and preserve 28 existing affordable rental units. Both projects, Treesdale Park (AHIP) and
Crozet Meadows (Jordan Development and PHA) were seeking federal low-income
housing tax credits. Crozet Meadows did
receive an allocation of tax credits and will likely move forward with
development in the fall of 2008 creating 38 new rental units for seniors and
renovating 28 existing units also for seniors.
The County has committed up to eight project-based vouchers for this
development. The Crozet Crossings
Housing Trust Fund also committed $134,400 in a deferred loan for this
development.
Staff has proposed to the
Housing Committee that recommendations be made to the Board to revise the way
it contributes local funding to affordable housing. The current process is through the annual operating
budget process which may subject the allocated funds being lost at the end of
the fiscal year if unused. Given the
market-driven aspect of housing and the likelihood that affordable housing
development may not be timed in a manner that works within an operating budget
cycle, staff is proposing that a separate fund be established for affordable
housing initiatives to be funded by the general fund. Such a fund could also be used for holding
cash proffers for affordable housing and could also include cash assets of the
Crozet Crossings Housing Trust Fund. If
such a fund were to be developed, the Housing Committee would establish a
process for accepting applications for funds and recommending projects to the
Board for the appropriation of funds.
Whether or not the Board dedicates one or more funding sources for
housing, a designated fund separate from the operating budget for the Office of
Housing may be requested for contributions to future affordable housing
initiatives.
CONCLUSION
The uncertainties of the
housing market are likely to remain through fiscal year 2009. The past three years have been successful
from the standpoint of implementing the County’s Affordable Housing Policy and
having developers provide proffers for affordable housing. The County now has an inventory of proffers
that could last for ten to fifteen years depending on how the market may
rebound. While the long-term outlook for
affordable units in a rebounding market is favorable, the more immediate
inventory of affordable units has been positively impacted by the downturn with
more units on the market for under $200,000 than anytime in recent years. However, the creditworthy purchasers are not
taking advantage of this opportunity.
The most likely reason is the fear of entering an unsettled market
during a period of rising foreclosures. As
such, education and counseling will remain a critical component of any
successful housing program particularly in the near-term.
Increasing the effectiveness
and efficiencies in the implementation of housing initiatives is a high
priority as increases in public funding are not likely. The activities undertaken in 2007 have set
some benchmarks for moving forward.
- Over 800 families received some level of
assistance through County-supported affordable housing initiatives.
- Housing activities in 2007 generally met or
exceeded their goals.
- The County’s funding in 2007 was 11% of the total
expenditures for affordable housing initiatives with 89% coming from
state, federal, and private sources.
Over one-half of all expenditures were private funds.
|
|
|
|
|
ATTACHMENT
A |
|
|
AFFORDABLE
HOUSING PROFFERS BY DEVELOPMENT |
|
|
|
||
|
|
|
|
|
|
|
|
Based on
maximum proposed units |
|
|
|
|
|
|
|
|
|
|
|
|
|
DEVELOPMENT |
UNITS |
CASH |
|
|
|
|
|
|
|
|
|
|
|
Avinity |
19 |
|
|
|
|
|
|
9 |
|
|
|
|
|
|
5 |
|
|
|
|
|
Belvedere |
103 |
$ 500,000 |
|
|
|
|
Biscuit
Run |
455 |
|
|
|
|
|
|
4 |
|
|
|
|
|
Briarwood |
25 |
|
|
|
|
|
Cascadia |
50 |
|
|
|
|
|
|
|
$ 60,000 |
|
|
|
|
|
|
$ 95,500 |
|
|
|
|
Glenmore
S5 |
|
$ 2,665 |
|
|
|
|
Glenmore |
|
$ 324,700 |
|
|
|
|
|
6 |
|
|
|
|
|
Hollymead
TC - A2 |
245 |
|
|
|
|
|
Liberty
Hall |
8 |
|
|
|
|
|
NGIC |
18 |
|
|
|
|
|
North
Point |
110 |
$ 300,000 |
|
|
|
|
Oakleigh |
8 |
$ 162,350 |
|
|
|
|
Old Trail |
330 |
|
|
|
|
|
|
2 |
|
|
|
|
|
Popular
Glen 1 |
|
$ 84,000 |
|
|
|
|
Popular
Glen 2 |
|
$ 66,000 |
|
|
|
|
|
78 |
|
|
|
|
|
|
90 |
|
|
|
|
|
Westhall
V |
6 |
|
|
|
|
|
Wickham
Pond II |
16 |
|
|
|
|
|
|
35 |
|
|
|
|
|
TOTAL |
1622 |
$ 1,595,215 |
|
|
|
|
|
|
|
|
|
|