Master Plan Digest: How Does the Local Housing Market Affect Redevelopment at Friendship Court?

Based on what we learned from residents and from a 2016 housing study commissioned by the City of Charlottesville, we believe a mixed-income development at Friendship Court will best serve the needs of current residents as well as many other local families.

Affordable Housing: Economic Mobility

What we learned: Residents want a better quality of life, but feel that “the system” makes it hard to move up.

Those interviewed often expressed high aspirations but also a feeling that they are limited by institutional constraints, from Section 8 to childcare costs to limited employment options. Gains made in one area cause repercussions in others; they could never get ahead. Although Friendship Court is seen as better than public housing, many feel “stuck” here.

What that tells us: Many believe mixed-income housing can provide access to opportunities, but it must also include paths to economic mobility.

Affordable Housing: Charlottesville Housing Study

What we learned: According to the City of Charlottesville’s 2016 housing study, the city has a critical shortage of low-income housing.

The city’s most underserved households are those with the lowest incomes. Recommendations from the study include

  • increasing “workforce” housing options;
  • supporting initiatives that preserve and expand rental opportunities for those who earn less than 60% of AMI (area median income); and
  • supporting environmentally friendly, resource-efficient and pedestrian-/transit-oriented neighborhood designs.

What that tells us: Residents whose income exceeds the Section 8 limits have few other affordable housing options within Charlottesville. This often means they must move to the county and beyond, where there are fewer jobs and greater transportation costs.

About the Economics of the Development

Friendship Court will be a ground-breaking development in terms of its economic model. Mixed-income developments completed to date have typically involved former public housing sites redeveloped with substantial federal funding through the Department of Housing and Urban Development (HUD)’s HOPE VI, Choice Neighborhoods or Rental Assistance Demonstration programs.

Without access to these resources, Piedmont Housing Alliance, as a private, nonprofit developer, will pursue a host of partnerships, programs and funders to complete revitalization of the site. This unique circumstance puts added importance on the proposed income mix. Approximately one-fourth of the units at the redeveloped Friendship Court will be designated for the lowest-income households with the heaviest rent burdens. Section 8 assistance for 150 low-income units allows for much-needed deeply affordable rents while providing the subsidy to offset the operating costs for those units.

Low-Income Housing Tax Credit (LIHTC) units will allow an additional level of affordability for those with incomes greater than the Section 8 limits. This will allow current residents who are upwardly mobile or other low-income families in search of affordable housing to remain in the city, where affordable apartments are extremely difficult to find.

Workforce units will fill a niche for families with incomes above the LIHTC income limits but still unable to afford market rents. The 2016 RCLCO housing study, commissioned by the City of Charlottesville, specifically calls out housing within this income band as a neglected market segment and in high demand.

The RCLCO study also clearly shows a growing demand for downtown, market-rate rental units. These market-rate units are crucial to the success of the Friendship Court redevelopment, as they will cross-subsidize the more affordable units and act as a catalyst for development of retail and other amenities on site, a benefit to every income level.

Friendship Court will also help the City surpass the goals set out in its 2025 Goals for Affordable Housing by increasing affordable housing for those who live and/or work in the city and are part of households with incomes of up to 80% of AMI (area median income); preserving and expanding rental opportunities for residents who earn less than 60% of AMI; and incorporating environmentally friendly, energy- and resource-efficient and pedestrian-/transit-oriented neighborhood design, building technologies and infrastructure.

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What do you think? Continue the conversation with a comment below.

In our next Master Plan blog post, we’ll take a closer look at how affordable housing options should match up to different income levels.

Source: Friendship Court Redevelopment Master Plan, December 2016 – What We Heard and What That Tells Us (Market Context)

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