AGENDA DATE: 4/19/2023
TITLE:
Title
Affordable Rental Housing Grant Program
BODY
SUBJECT/PROPOSAL/REQUEST: Public hearing on a proposed ordinance to enable the County to provide grants or loans for the production or repair of affordable housing.
ITEM TYPE: Regular Action Item
STAFF CONTACT(S): Richardson, Walker, Rosenberg, Herrick, Dimock, Pethia
PRESENTER (S): Stacy Pethia
LEGAL REVIEW: Yes
REVIEWED BY: Jeffrey B. Richardson
BACKGROUND: In April 2019, the Thomas Jefferson Planning District Commission (TJPDC) released the Comprehensive Regional Housing Study and Needs Analysis. The report identified the need for an additional 10,070 affordable housing units in Albemarle County by the year 2040.
On July 7, 2021, the Board of Supervisors approved Housing Albemarle, the County’s new housing policy, but delayed implementation of the following elements until a package of developer incentives to support the construction of affordable housing was approved and implemented:
1) the increased percentage of affordable housing units in residential developments subject to rezonings or special use permits;
2) the increase in compliance periods for affordable housing units; and
3) the new price levels for both affordable for-sale and for-rent units.
Between June and October 2021, staff held four meetings with members of the developer community to discuss the components of an incentives package to support the provision of Affordable Dwelling Units (ADU) and developers’ efforts to meet the County’s affordable housing goals.
On February 16, 2022, the Board held a work session to discuss a proposal for an Affordable Housing Overlay. Based on feedback received during the work session, staff determined that an alternative approach to developer incentives was more appropriate.
On May 4, 2022, the Board held a second work session to discuss affordable housing incentive programs. The focus of this work session was on a possible ADU Program ordinance, which could include developer incentives. As a result of this work session, the Board directed staff to submit a Resolution of Intent (ROI) to consider amending the Albemarle County Zoning Ordinance to include an ADU Program.
On February 1, 2023, the Board held a work session to review and provide feedback on a proposed Affordable Rental Housing Grant Program to support the construction or preservation of affordable rental housing.
STRATEGIC PLAN: Quality Government Operations - Ensure County government’s capacity to provide high quality service that achieves community priorities.
DISCUSSION: As noted during the February 2023 work session, Virginia Code § 15.2-958 (Attachment A) enables the County to provide grants or loans by local ordinance to property owners for the construction or rehabilitation of affordable dwelling units. The Affordable Rental Housing Grant Program, as originally proposed, provided grant assistance in an amount equal to 100% of the cost of water and sewer connection fees for 20% of the total units in a residential rental property. The grant funds would be rebated over a 10-year period.
In response to feedback received from the Board during the February 2023 work session, staff amended the proposed Affordable Rental Housing Grant Program (Attachment B) to include the following:
1. Grant funds would be provided to rental housing properties with 11 or more units.
2. Rental housing properties receiving grant funding must provide a minimum 20% of the total number of
rental units as affordable housing as defined in Housing Albemarle, the County’s affordable housing
policy.
3. The grant term would be 15 years from the issuance of a Certificate of Occupancy.
4. The total amount of grant funding to be provided each year would be equal to a percentage of the
property’s real property tax increment based on the following schedule:
rebate an amount equal to 100% of the tax increment in years 1 - 5;
rebate an amount equal to 60% of the tax increment in years 6 - 10; and
rebate an amount equal to 20% of the tax increment in years 11 - 15.
5. Total aggregate of real property taxes rebated annually would be equal to 1% of the total amount of real
property taxes collected in any given year.
To apply for grant funding, owners of residential rental properties seeking assistance must complete an application form (Attachment C), and submit the completed application along with all required documentation to the Housing Policy Manager. The Board would have final approval of all grant requests.
Implementation of the current Program requires the adoption of an ordinance. Even though the current Program proposes only grants to owners of qualifying rental properties, Virginia Code § 15.2-958 (Attachment A) enables localities both to provide loans and to assist certain owner-occupied housing. Though the current Program does not involve either loans or owner-occupied housing, the proposed ordinance (Attachment D) was drafted to allow future use of the full state enabling authority, if desired.
BUDGET IMPACT: The budget impact of this program would depend on the number of developers seeking grant support and the number of affordable units for which they are seeking funding.
RECOMMENDATION:
Recommendation
Staff recommends that the Board adopt the attached proposed ordinance (Attachment D) to enable the County to make grants or loans to support the construction or rehabilitation of affordable housing, including through the proposed Affordable Rental Housing Grant Program.
ATTACHMENTS:
A - Enabling legislation
B - Draft Affordable Rental Housing Grant Program
C - Draft Affordable Rental Housing Grant Program Application
D - Proposed Ordinance