Board Identified Strategic Priority

Sept 9, 2005

Develop and Implement a Housing Policy that works

White Paper




What is “affordable housing?”


HUD definition:

According to the U.S. Department of Housing and Urban Development (HUD), housing is considered “affordable” when a household pays 30% or less of their monthly income towards housing costs.


County’s definition for homeownership:

In Albemarle County, the County’s Office of Housing developed and the Board approved an “affordable mortgage value” calculation for homeownership based on the HUD affordable housing definition. The Office of Housing uses this calculation to monitor the sales of homes in the County using information provided by the Charlottesville Area Association of Realtors (CAAR). This “affordability” number changes each year and is based on the following information:


“A purchase price for a house is considered “affordable” in the County when a household whose income is 80% of the area median income (based on the most recent information published by HUD) pays 30% or less of their household income for housing costs. The formula is based on a 30 year fixed mortgage and the recent mortgage rate percentages. In 2005, the maximum mortgage value that would be “affordable” was considered to be $192,050.


What does Census data tell us about affordable housing in Albemarle County?


Albemarle County Home Owners:


According to the 2000 U.S. Census data, 19% of the Albemarle County home owners paid more than 30% of their monthly income towards housing costs. This situation means that in 1999, of the 16,376 home owner households in the County, 3,111 of the County’s homeowner households reported living in housing situations that are in the unaffordable range. This includes housing in all price ranges.


It is important to note that this percentage is similar to our peer counties and throughout the state. Twenty-one percent of Stafford County homeowners, 22% of James City County homeowners, 19% of Henrico homeowners, 17% of Hanover homeowners, and 20% of all the homeowners in the state reported paying more than 30% of their monthly income towards their housing costs in the 2000 Census.


Albemarle County renters:


According to the 2000 Census, 38% of the 10,089 rental households in Albemarle County reported paying over 30% of their household incomes on housing. This situation means that, in 1999, 3,833 of the families and individuals who rent in Albemarle County could be classified as living in “unaffordable” rental units.


Again, this statistic is similar to many of our peer counties and throughout the state. For example, 32% of rental occupants paid more than 30% of their income for their housing in Stafford, 42% in James City County, 33% in Henrico County, 32% in Hanover and 34% of the renters paid over 30% of their income for housing statewide.


The 2000 Census data also tells us that of the households (both renters and homeowners) who are classified to be in the lowest income category at 30% of Median Family Income (MFI), 87% or 546 of these households reported that they are living in unaffordable units.


What do recent home sales tell us about affordable housing in the County?


According to the Housing Office, housing sales in Albemarle County were at a record high of 1,816 in 2005 with the median sales price increasing 7% from $266,125 to $285,000 between 2004 and 2005. Of these, 416 units (23%) sold in 2005 were considered “affordable” according to the County’s criteria. A notable change in 2005 was the increase in the number of condominiums sold. Sixty percent of the 412 “affordable sales” were condominiums. The percentage of affordable existing housing (resales) as a percentage of all resales remained fairly consistent since last year, between 26% and 28%. The number of affordable new units (under $192,000) sold in 2005 was 9 units, down from 12 in 2004. 


The Charlottesville/Albemarle County region is not unique in increasing housing sales prices. The Virginia Association of Realtors notes that many regions across the state have posted record median sales price increases in recent years.


County has recently increased its emphasis on affordable housing


Providing affordable homeownership opportunities was identified as a focus for the County in the FY 03/04 – FY 05/06 Strategic Plan. Work groups, committees, advisory groups, and focus groups were convened to make recommendations to address the issue.  The Albemarle County Housing Committee has taken an active role in studying this issue and promoting affordable housing.


County established a housing policy in 2004


Both the City of Charlottesville and County of Albemarle developed policies on affordable housing, with Albemarle’s policy adopted as a part of the Comprehensive Plan in February 2004.  The Policy further defined affordable housing as follows: 


“In general terms affordable housing 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.”


Albemarle County’s Policy, as adopted, states:


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 Countywide 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.


Current situation


In 2005, Albemarle County appropriated approximately $960,000 in local funds to support a variety of housing initiatives for the fiscal year ending June 30, 2006. These funds leveraged over $3.5 million in additional assistance. In addition, developers have recently begun to proffer substantial amounts of funding and affordable housing units.  Examples of the County’s current initiatives include:


1)      Assistance to Renters who are most in need - Housing Choice Voucher (Section 8) program:  The Housing Office administers a $2.5 million annual federally funded program which assists 420 households each year.  The program is targeted for renter households who are at the 50% of the Area Median Income (AMI) or below, with 75% of the funds targeted to those who are at 30% AMI.  12 of these vouchers are used to support elderly individuals who live at Parkview in South Pantops. The cost to the County is approx $200,000 to administer the program (support for Housing Office).


2)      Assistance to Renters – Woods Edge Subsidy:  The County expends $40,000 per year to subsidize 30 units for the elderly whose incomes are below 50% AMI.


3)      Assistance to Renters - Funding to the Albemarle Housing Improvement Program (AHIP):  The County provided one time funding to assist AHIP in acquiring the 96-unit Whitewood Village Apartments preserving all 96 units in the affordable housing stock.


4)      Assistance to First Time Homebuyer:  The County allocates $250,000 annually in down payment assistance to assist first time homebuyers to purchase their first homes. This is a program that assists renters who are at 60 to 80% AMI. In addition, Piedmont Housing Alliance leverages additional funds by providing these individuals access to low interest mortgages. This program assisted 18 individuals since May 2005 who would have not been able to afford a market rate mortgage in purchasing their first homes.


5)      Assistance to Homebuyers - Proffered Units:  Currently, developers have proffered units that can be purchased at a set rate that would be affordable to a smaller segment of the population. At this time, approximately 500 affordable housing units (including accessory-type apartments) have been proffered. These units will become available as these developments are built over the years ahead.


6)      Assistance for various needs - Cash Proffers:  Currently, $750,000 in cash proffers to support affordable housing in the County has been promised to the County’s Housing Fund. These funds could be used for down payment assistance, incentives or to develop affordable housing.  These funds mostly will be received in future years when building permits are received or the developments approved with these proffers.


7)      Partnerships:  The County partners with several non-profit agencies such as Piedmont Housing Alliance, AHIP, and JABA, state and federal agencies, individuals and developers to provide a variety of housing opportunities to Albemarle County citizens.


Categories of Direct Assistance:


Income Level Family of Four

Example of who is served

Estimate of number served

Program or Incentive


0 - $33,350



0 to 50% AMI

Rental:  Family receiving public assistance and/or on fixed incomes


420 per year

HUD Rental Assistance vouchers

$2.5 million



Federal funds

$26,675 - $40,000






Approx 40% to 60% AMI

Rental: Families who rent and/or rental housing for elderly

30 units Woods edge

96 units – Parks Edge


Both assisted housing and unassisted housing and non-profit efforts

$40,000 per year – Woods Edge


Local funds


AHIP support


State/Federal funds



$40,000 -$53,350








60% to 80% AMI

Homeownership: Low/Moderate income families

18 First time homebuyers per year

Affordable Housing Fund

$250,000 in Down Payment Assistance



Local funds


Proffered affordable housing






Staff proposes adding this fourth category of assistance so that affordable housing could be made available to those with moderate income levels.



Income Level Family of Four

Example of who is served

Estimate of number served

Program or Incentive


$53,350 - $73,150





80% to 120% AMI

Proposal:  Provide assistance to moderate income families to purchase housing


To be determined



Proposal:  Proffered affordable housing

Proposal:  Allow moderate income families to be eligible to also purchase affordable housing proffered by developers, without the County contributing down payment assistance


No local costs





1) Market Forces:  It is difficult to intervene in a market that is dictated by supply and demand. Increasing land costs in the County make affordable housing more difficult to develop. In order to create an affordable unit to sell at $190,000, a rule of thumb is that the developed lot should cost no more than $45,000.  In Albemarle, developable lots currently cost between $70,000 and $120,000 for townhouse size parcels. Single-family detached housing lots are often much higher.  Buyers also influence the market. It is apparent, based on current market conditions, that many buyers prefer larger units, with more upgrades and amenities, than was preferred in the past.  Buyers also may choose to pay more than 30% of their monthly income for housing, or choose to live outside of the County.


2) Challenges for Developers to create new affordable housing units:  The creation of new affordable housing could prove to be costly for builders. A builder would be required to give up the potential for increased profit on each unit of affordable housing sold at $190,000 versus a market-rate unit selling for $250,000.  The potential loss in profits increases if the $190,000 unit sold actually costs more than the selling price to produce.


3) Enabling Authority: Advocates who support local government actions to create affordable housing often point to the actions of other jurisdictions both in Virginia and other states.  Many states provide authority to local government to require some level of contribution to affordable housing.  We do not have that authority in Virginia.  Even trying to compare Albemarle to two Virginia localities that have achieved some level of commitment to affordable housing seems to be a dissimilar comparison.  The localities are Fairfax and Loudoun.  The difference is that developers are seeking densities much greater than allowed by current zoning in these Northern Virginia counties and are willing to provide some affordable units in exchange.  In Albemarle, developers often are not requesting the maximum density allowed in the Comp Plan for their developments. 


4) Incentives:  If a developer does not request additional density, there needs to be incentives or a package of incentives to offer in seeking the inclusion of affordable housing in new developments.  Our affordable housing inclusion policies should not create a negative financial impact on the builder and developer.


5) Resources:  Even though the County’s Office of Housing works diligently to leverage additional funds and opportunities, resources are finite.


6) Current approach for purchasing proffered units may restrict opportunities:  A police officer, firefighter, teacher, and family support worker at mid-range would exceed 80% of the area median income (AMI) for one-person and two-person households.  Therefore, they would exceed the County’s criteria to purchase an “affordable unit” developed through proffers.  Suppose that a police officer is married to an Office Associate III and the couple has two children.  With both at mid-range, this family would exceed 80% AMI and, again, not be eligible to purchase an “affordable unit” developed under a proffer.  Another example of a family exceeding 80% AMI is a bus driver whose wife is a food service associate and the couple has one child.  If these are examples of families the County is trying to help, the policy must be modified to expand the target population to at least 100% AMI and potentially as high as 120%. 


7) Affordable Rental Units Limited: Affordability is also a factor for those who rely on rental housing.  The Office of Housing completed a rental survey last fall and compiled rental rate information representing over 6000 rental units.  A comparison of rents for a two-bedroom apartment with what households at various income levels could afford indicated that approximately 2/3rds of the available rental units are affordable to households at or above 50%AMI.  However, no units were found to be affordable to households below 30% AMI.




The County realizes that it will not resolve Albemarle’s affordable housing issues, regardless of the amount of resources invested or the implementation strategies undertaken, because housing is significantly impacted by market forces beyond the County’s control.


To maximize the County’s impact, therefore, the County should continue to provide a range of programs, to expand its ability to partner with others, and take a multi-focused approach to maximize affordable housing opportunities.


Recommended Statement for the FY 07 – FY 10 Strategic Plan


Working in partnership with others, increase affordable housing opportunities for those who work and/or live in Albemarle County.


Specific strategies could include:


●  Extending the availability of proffered units to those with moderate incomes

●  Expanding existing partnerships and creating new alliances with the private sector

●  Seeking additional resources from the state and federal government

●  Promoting long-term affordability of units to protect direct monetary investment  of public resources

●  Emphasizing housing rehabilitation as a prevention measure

●  Encourage tax credit projects for affordable rental housing


The Albemarle County Housing Committee plans to present a report to the Board in May and will expand further on this topic and these recommendations. Specific outcome measures will be developed in the future.


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