The Albemarle Board of Supervisors has given the Piedmont Housing Alliance just under a tenth of the cost for them to build between 40 and 60 apartments on U.S. 29 at Premier Circle.
“Their total project cost is $22.05 million approximately and Piedmont Housing Alliance is requesting $2,000,025 toward the project,” said Stacy Pethia, the county’s assistant director of housing.
This is one of three proposed phases at the site which used to be a Red Carpet Inn. The first phase is an 80-unit apartment building to be built and operated by Virginia Supportive Housing, the same entity that built and operates the 60-unit Crossings at Fourth and Preston in Charlottesville. A third phase would be commercial buildings.
The Piedmont Housing Alliance units would be reserved for households making less than 60 percent of the area median income, a figure calculated by the U.S. Department of Housing and Urban Development.
“On April 1 of this year, the median income increased to $124,200 per household so this 60 percent AMI level really opens up things to more families than it used to,” Pethia said.
Supervisors also approved $100,000 in funding for a joint study with Charlottesville to assess the state of services for the unhoused in the community.
“The assessment goals would really reevaluate the operational effectiveness of the current continuum of care system so that would include Blue Ridge Area Coalition for the Homeless, along with the other homeless services, supportive services on that, including PACEM and the Haven,” Pethia said.
Pethia said one outcome would be to establish the number of shelter beds needed. The City of Charlottesville recently purchased land on Avon Street from the Charlottesville Redevelopment and Housing Authority that might one day be used for support services and beds.
Neil Williamson of the Free Enterprise Forum pointed to the proforma for Piedmont Housing Alliance’s Premier Circle included in the packet that demonstrates the high cost to build new housing.
“For the 60 unit Premier Circle Phase 2 apartments, total project costs are estimated at over $20 million,” Williamson said. “That works out to $334,166 per unit.”
The cost of construction is listed as $14.6 million. Land acquisition is estimated at $1 million. There’s a $2 million developers fee.
On the funding side, $8,7725,000 is expected through revenue from the sale of low-income housing tax credits. Another $5,515,000 is expected to come from a mortgage.
Pethia said it is not unusual for these projects to have multiple funding sources.
“A really good example is looking at the Crossings at Fourth and Preston,” Pethia said. “They had at the final stage, 17 different funding sources, the majority of which were grants coming from state and federal and local sources.”
Williamson said he appreciated that Albemarle’s funding would help the nonprofit developer leverage funds, but the details in the proforma also demonstrate how the profit margins for private developers are slim. He said inclusionary zoning programs that require developers to rent or sell a certain number of units may have the effect of halting construction because the financing won’t work out.
“In this highly expensive housing market, the Free Enterprise Forum calls on Albemarle to continue to tweak the Housing Albemarle program requirements,” Williamson said. “Percentage of units. Level of affordability. Term.
During her presentation, Pethia mentioned that there would be between 40 and 60 units, not the definitive 60 units that have been stated up until this point. Supervisor Ann Mallek asked why there is a range.
“Some of it will be based upon how much low-income housing tax credit financing they are awarded and some of it will come down to just simple site plan issues,” Pethia said.
Piedmont Housing Alliance did not pursue LIHTC funding this year through what used to be called the Virginia Housing Development Authority. Pethia said Piedmont Housing Alliance will not get the funding until specific steps have been made, such as being awarded the funding.
VHDA now goes by the name Virginia Housing.
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