Albemarle County is considering an affordable housing overlay in its zoning to provide incentives for developers to build more affordable homes in new housing projects.
During a work session Wednesday, the Albemarle Board of Supervisors discussed the possible overlay zone, which applies to regular zoning in the county’s development areas. Supervisors were supportive of exploring the concept further.
The overlay could allow developers to build up to the maximum density specified in the Comprehensive Plan for a property while waiving the need for a formal rezoning process. It would apply only if a minimum of 20% of the new homes are built as affordable housing, using the price levels recommended in the county’s recently updated housing policy and meeting other criteria.
The proposal could allow developments to increase density and give developers fee reductions for building permits, reductions in parking standards and flexibility in design.
“I’m not opposed to anything at this point,” Supervisor Ned Gallaway said. “I want it all out on the table. I want it to be there for us to consider.”
Stacy Pethia, the county’s housing policy manager, said the discussion was meant to gauge the board’s interest in the concept of offering fee rebates and modified development standards in exchange for affordable housing.
“The next steps would be for staff to go and do a full analysis of program components, resource needs for implementation, work with developers to identify the specific components of the program and schedule a work session with the board in May,” she said.
In July, the board adopted a new housing policy but delayed the implementation of new affordable housing definitions and requirements, mandating proposed rezonings and special-use permits provide 20% affordable housing, up from 15%, at reduced prices and with extended periods of affordability before incentives could be approved.
The maximum sale price for affordable housing would be $204,100 or less, based on current numbers. That amount is based on 65% of a federal program’s purchase price limit for existing housing in Albemarle. The price, which changes annually, currently is a maximum sale price of $243,750, 65% of the maximum sales price for Virginia Housing’s first-time homebuyers’ program.
The maximum rent to be charged for an affordable housing rental home would be equal to one-fourth of 65% of the area median income, which is currently $93,700, adjusted for unit size. The home must be made available for rent to households with incomes at or below 60% of the median income.
Pethia said county staff has been meeting with developers since the new policy approval to discuss the feasibility of possible incentives.
With the overlay, she said, the board would identify density levels and development standards ahead of time.
“When a developer applies to develop under the affordable housing overlay, if it meets the standards laid out in the overlay, then that can move forward without any other type of review,” Pethia said. “If it varies from that, then that is when they would have to come get additional approval from the board and planning commission.”
She said the bonus density incentive would allow for developers to build more market-rate units to offset the cost of affordable units. The required number of affordable units would be calculated prior to adding the bonus units.
Fee waivers are proposed on a sliding scale with projects providing affordable housing at 60% of median income for rentals receiving a 50% fee reimbursement. Projects with 80% of median income for-sale housing receive a 25% fee reimbursement.
For projects providing greater than 20% affordable housing, 100% of fees would be reimbursed.
Pethia said the development standards’ flexibility would be determined on a project-by-project basis. The developer would also need to demonstrate that the development standards either physically preclude construction of the project at the density permitted with the bonus, or impact the financial feasibility of the project.
Supervisor Ann H. Mallek said she was concerned about “an overlay that applies to every piece of dirt,” and did not want to create “substandard, crowded, no greenspace, no recreation space places.”
“I want to do everything I can to prevent that loss of accountability, loss of process, giving away too much. Our residents who live in these places are going to pay the cost for it,” she said.
Mallek said that the checklist and the board’s deliberation about specifics would be important.
“That’s going to be a real leap of faith for our citizens because we’ve been working toward more participation and inclusion and transparency for 25 years and this is now a completely different approach, so I will be interested in their responses,” she said.
Supervisors Bea LaPisto-Kirtley and Diantha McKeel said it will be “crucial” to develop a waiting list of renters and owners for affordable homes.
“It’s really going to be critical if we want to make the program work, it would seem to me, so it’s worth the effort, even if it has a budget implication to it,” McKeel said. “That’s just speaking for me, but we’ve got to have a program that actually works and the waiting list seems to be a successful one.”
In 2020, a Daily Progress investigation found that just 45 for-sale affordable units out of 91 constructed had been purchased by income-qualifying homebuyers. The remainder reverted to market-rate after the county failed to provide qualifying purchasers within the timeframe allotted, and were ultimately sold at full price.
As of December, 55 for-sale affordable units out of 98 constructed had been purchased by income-qualifying homebuyers.
Pethia said there were alternatives to an overlay that could be pursued, including reimbursements of residential water/wastewater connection fees for affordable housing, real estate tax rebates through public-private partnerships or a mandatory affordable dwelling unit program.
Board members asked for examples showing how already-approved development projects could have been different if this possible overlay had been implemented when those proposals came forward.