As the City of Charlottesville has already embarked upon the drafting of a completely new zoning ordinance, it still awaits a report on its current supported affordable housing. Only after completing its 2021 Comprehensive Plan did the city even commission a consultant, HR&A, to perform this study. So far, we have only seen interim work. While that work contains some sensible recommendations, for example reconsituting the committee that reviews CAHF-funded projects so that non-profits that are major beneficiaries aren’t also sitting on the review committee and standardizing reporting and review templates, it fails to answer some very basic questions. We still do not have a count of supported affordable units. The report cites a number of units touched by various city programs, but this is comparing apples and apple-trees. It conflates homes where CAHF funded some free paint with actual constructed units. In looking at funding per unit, it only considers city funds, ignoring full cost, which makes evaluation of total efficiency impossible.

We attempt here to fill some of the information gaps. First, we tried to compile a list of all the supported affordable units in the city. We considered affordability at the unit level — that is, a private unit rented with a voucher is not considered. We only look at units that are by the nature of their funding or deed mandated to be affordable. This encompasses units built with federal or state LIHTC funding, dedicated Section 8-oriented projects, city-owned or CRHA-owned public housing, projects built and retained by mission-oriented entities (e.g. Habitat), projects where new homeowner bought under continuing affordability mandates and projects with extant affordability proffers. We identified 1483 units. We know that this is probably an undercount, as there is no centralized repository for this data. We also left out more informal mission-based situations, like Jeremy Caplin’s heroic efforts to preserve housing in 10th & Page (amounting to over 80 units by our count). We do not include “naturally affordable units”, but we will endeavor to consider those in future research. It is also worth noting that there are several LIHTC projects that sit just outside the city limits. We excluded these, even though they are certainly in practice part of the city’s housing market. The projects are visible on the map below.

The spreadsheet below breaks down the units by neighborhood and type. We can see that there are units all over the city, but the highest concentration appears to be in the center of the city. We can also see that LIHTC has been the most meaningful source of units, far beyond what the city has done itself.

As an aside, we note that HR&A recommends that the city do a better job of tracking affordable units. Funny that, as the city used to do it (there are published figures from 2015), and in fact explicitly calls for annual reporting in its guidelines. For our shambolic city government, however, it is one thing to decree and another to do.

Good idea. Maybe actually do it?

As mentioned above, HR&A has some numbers about city contributions to affordable housing, but these are sums that tell very little. What is really important is to figure out if affordable housing production can be done efficiently here. We researched national benchmarks on LIHTC development costs and then attempted to compile numbers for some of the city’s more prominent ongoing projects. The city numbers are very difficult to come by, but we were able to triangulate to what we believe are good numbers between press reports, Cvillepedia reports, and City Council materials. The best sources for the national numbers were reports from the GAO and from ABT Associates. Note that “Div5” is a geographic designation that indicates the HUD region in which Virginia sits. More dispiritingly than surprisingly, Charlottesville numbers look quite expensive relative to benchmarks. In fact, they look expensive relative to the median sale price of multifamily units in the city. For the chart below, we updated all values to account for Construction Cost Index inflation from the date of the study to today. Note that we have costs for both newbuild projects and acquisition-and-development projects. As you might expect, the latter are less expensive. The Charlottesville projects are a mix. Crescent Halls is a redevelopment, as is Friendship Court Phase 1. MACAA Park Street’s first phase envisions 66 rental units, essentially all newbuild. South First has both a redevelopment and a newbuild component, and costs of the latter may be exaggerated by the inclusion of some office space and a community center.

From the people who brought you a $75K / student station Middle School renovation…

We also note that we have seen communication from local Habitat that claims their new-build TDC is at present $250K per unit, which would put their projects at a substantially higher level of efficiency than the other city projects. Having a good understanding of the relative efficiency of different sources of affordable housing will be crucial to wisely directing city funds toward this important goal. Unfortunately, it does not appear the city has the requisite data, and what we see from the efficiency of large projects is not encouraging.

We do not have good data on the condition of the affordable units in the sample, but from press and other public sources, it would appear that the projects under redevelopment are in fairly desperate need of repair and upgrade. These are important projects and we hope they will proceed expeditiously. One question that we can better answer is whether the affordable units that exist (including the ones undergoing redevelopment) have been located in a way that makes them workable for their residents. In many jurisdictions, public housing and affordable housing have been highly concentrated in areas that lack access to amenities or even to market-rate neighbors. To what degree is that true in our city? We ran some analysis to try to get at this question. First we plotted Walkscores for all affordable and market units in the city. We also used Walkscore’s new “Walkshed” metric to determine the walkability of affordable and market units to schools and to grocery scores. The Walkshed algorithm plots the zone of walkability for any given point — we ran it for all elementary schools and grocery stores and tagged all units within each Walkshed.

Affordable Units Score Favorably on Locational Access to Amenities

We find that the city’s affordable units are not isolated from schools, stuck in “food deserts” or generally less walkable than market units. This suggests to us that, fortunately, the current redevelopment projects that envision adding units to existing affordable projects are taking advantage of sites that most likely will be workable for residents. While affordable units may have access to schools and stores, it is also worth looking at whether they are isolated from neighbors in market units. This is not as straighforward a question to answer. We attempted to get at it by calculating for every market unit in the city how many affordable units sit within a certain distance. We used 250m and 500m as the distance criteria. Of course, some market units may have more close neighbors (overall) than others, so we also looked at the percentage of near neighbor units that are in our affordable unit sample.

Most Market Units Have Affordable Units in Proximity

In a world where affordable units are distributed with total spatial uniformity, every market unit would have the same percentage of neighboring units that are affordable, and that quantity would equal the jurisdiction wide affordability percentage. Obviously, that will rarely or never be the case. The gap between median and citywide numbers here came out smaller than we had expected. Some of the concentration appears to relate the absence of larger (>5 units) projects from areas with very low walkscores. That’s probably sensible, however, given the importance of siting affordable units where a car is not an absolute necessity. These numbers argue against the “just-so” story we sometimes hear about spatial isolation of affordable units from market units. That does not, of course, refute the idea that there may be other forms of non-spatial isolation or segregation of relevance. We attempted to create a more continuous metric of “proximity to affordable neighbors” here, for those who are interested in a more technically involved approach that reaches similar conclusions.

As a final check, we considered whether residential property values were different based on proximity to affordable housing. If affordable housing has been systematically placed on low-quality sites, it should show up in property values. We excluded the affordable housing parcels themselves, as provisions attached to the land might affect the assessment. We categorized proximity based on the percentage of neighboring units that are affordable units. We found that land values per acre (mean, weighted by acreage) were considerably higher in the ADU-dense areas, while per unit overall assessments (median, by parcel) were slightly lower. The pattern suggests that because, as explained above, affordable units are more heavily tilted toward central and walkable areas, the land value is higher (due to higher development/density entitlement) and the per-unit value is slightly lower (due to a mix more heavily titled to multifamily units — which trade at a big discount to SFH in Charlottesville).

It is our hope that HR&A and the city will surprise us with a final report that comprehensively catalogs supported affordable units and generates a complete, trenchant, and implementable set of recommendations to maximize the efficiency of deployments of the city’s affordable housing funding. Any such report needs to be grounded in data, rather than the kinds of just-so stories and cant that have characterized the city’s housing plan and comp plan thus far. While we are critical of the city’s execution, we do think it is important not to overlook some of the positives of the city’s situation: identifiable dedicated affordable units amounting to over 6% of the city’s total housing units and closer to 15% of the city’s rental units; the existence of land in accessible/central areas dedicated to and available for affordable housing; and progress of several large and meaningful (if suprisingly costly per-unit) redevelopment and new-development affordable housing projects.

April 2022

Appendix: HUD programs in Charlottesville and Albemarle

Much of the provision of affordable housing in the US operates under the auspices of federal programs administered by the Department of Housing and Urban Development. The main program categories are Housing Choice Vouchers, Project-based Section 8, and Public Housing. Housing Choice Vouchers attach to a tenant; the vouchers pay a portion of the tenant’s rent (aiming to get their rent/income to 30%) subject to caps on the market rent of the apartment, depending on market and family size; Project-based Section 8 works a lot like HCVs except that the subsidy attaches to the housing unit/development and not the tenant; Public Housing consists of housing developments owned and managed by public housing authorities. Charlottesville has a great many housing units under each of these HUD programs. Albemarle, less so. For Charlottesville, over 10% of rental units benefit from one of these HUD programs. If we screen out student households, it comes out to somewhere between 13% and 15% of rental units. In Charlottesville, the HUD programs appear to target people in need of deeply affordable housing — the vast majority of beneficiary households do not get the majority of their income from wages. The average tenure in the housing unit of a household receiving HUD support runs to almost 10 years. This gets back to our point that chronic disconnection from the labor market explains a lot of the housing affordability stress in Charlottesville. The table below shows details on HUD programs in Charlottesville and Albemarle. Charlottesville, the table illustrates, already has a very extensive penetration of HUD-supported affordable housing.

HUD programs already carry a considerable load in Charlottesville