Council agrees to jump-start housing effort

City councilors agreed in principle Tuesday to spend $1 million from Charlottesville’s economic development fund in coming years to help build new affordable housing.
The city has struggled to convince private developers to include affordable units in new buildings and complexes, especially around downtown. By setting aside $1 million for such purposes, councilors hope to induce the creation of more housing for low- and moderate-income residents.
“This will get the market to think about adding affordable housing to developments, and the city can help partner to make that a reality,” Gary O’Connell, the city manager, said.
Ideally, many of the projects seeking city funding would include commercial space and be within walking distance of major shopping and residential districts, such as the Corner and the Downtown Mall, officials said.
The funding would be provided in the form of a loan rather than a grant, so that the city could recoup its investment within five to seven years.
Additionally, “the return of money through taxes and potential job creation” would more than justify the loan, O’Connell said.
This would be the first time the city has used money from the economic development fund, which has a balance of about $4.3 million, on housing projects. In the past, the account has provided money for loans to SNL Financial for a new headquarters and to Coran Capshaw to build the Pavilion, among other projects.
This past session the General Assembly granted the city the authority to give developers extra density in return for affordable units or a contribution to Charlottes-ville’s housing fund.
Councilors could sign off on both the $1 million proposal and the developer contribution measure sometime this summer.
During Tuesday’s work session, councilors suggested myriad ways to increase the city’s stock of affordable housing, including supplying more rental units for the homeless, encouraging accessory dwellings and working more closely with Albemarle County.
This year the city made an unprecedented commitment to affordable housing programs, spending $2.1 million compared with less than $600,000 last fiscal year. In the upcoming budget year, the city has allocated $1.4 million for such endeavors, drawing the ire of local housing activists.
Councilor David Brown noted that affordable housing is a regional problem and the city should not continue to bear the entire burden. Albemarle County is spending $330,000 this year on affordable housing, with an additional $300,000 coming from developers.
“I remain concerned that we solve other jurisdictions’ housing problems,” Brown said, adding that he wants to have more regular discussions with Albemarle supervisors on the topic.
Councilors stressed the need to find more permanent housing for the city’s homeless. This year the city has given the local community services board about $230,000 for such a supportive housing program, which will provide not only an apartment to 10 to 15 homeless people, but also counseling and job training.
“We shouldn’t be thinking of ways to shelter more people but how to end homelessness,” said Mayor Dave Norris, who runs an interfaith group that provides shelter to the homeless in the winter.
Additionally, councilors said they would like to fund new financial literacy classes for low-income residents and first-time homebuyers and that they want more city homeowners to be able to take advantage of a housing rehabilitation program.