Applications open for Henrico’s $60M Affordable Housing Trust Fund

The application process for Henrico County’s new $60-million Affordable Housing Trust Fund, through which county officials and their partners aim to foster the construction of about 100 to 150 affordable single-family homes in the county during each of the next five years, opened this week.

Relatedly, the county also is planning to create a new zoning classification (R-4B Single-Family Residential District) which would allow the construction of more densely situated single-family homes on narrower lots than are permitted in Henrico currently.

The housing trust fund, established by the county’s board of supervisors in May using tax revenue from data centers in Henrico, is available to nonprofit and for-profit builders and developers who meet certain criteria established by its administrator, the Partnership for Housing Affordability.

Companies selected to receive money from the fund can use it to assist with costs related to land acquisition, development and construction. They’ll also qualify to have planning fees waived for the entire development and building permit fees and water and sewer connection fees waived for each of the affordable units they build as part of that development, and the county will fast-track their proposals through the review and approval process.

Homebuyers eligible to purchase units that receive funding through the program must earn between 60% and 120% of the area median income, or AMI – a range that for a single person is $46,380 to $92,760 and for a four-person household is $66,180 to $132,360.

“We saw charts about a household income needing to be about $120,000 to qualify for a loan, homes in the area weren’t being built for less than $300,000. . . and teachers, police officers, firefighters, service workers, just everyday people were having a hard time qualifying for loans,” Board Chair Tyrone Nelson (Varina District) said. “This is why we’re doing it. There’s no targeted part of the county that we’re trying to build up and make the affordable housing capital – we’re trying to make homes more affordable across Henrico County.”

To be eligible to apply for fund dollars, builders and developers must:

• have at least five years of experience building or developing single-family homes;

• have sold at least 30 homes;

• be in good standing with the county and not listed on an Department of Housing and Urban Development debarment list;

• be able to begin construction within 12 months of the application date and meet milestones during the process thereafter;

• include affordable homes within their community and construct units that are visually compatible with the overall community.

“The funding is available today. We’re looking for shovel-ready projects so that someone isn’t holding and tying up money and taking away from a project that could potentially be finished within the next 18 months,” said PHA Executive Director Jovan Burton.

Guidelines for the fund do not require that developers commit to a certain percentage or certain number of affordable units within their developments, but the amount of funding they’ll receive will increase as that number does. And developments with more affordable units are likely to be scored higher than other proposals by the officials who review applications.

Scoring criteria established by PHA includes:

• the capacity and experience of the applicant;

• the overall readiness of the project;

• a commitment by the developer or builder to integrate the affordable units within the overall development (and not to separate all affordable units, for example);

• a plan to sell the affordable homes to buyers whose income levels are within the program limits;

• the financial viability, funding request and leverage of additional funding.

As part of the program, PHA has established four separate sets of maximum sale prices for various homes based upon their ZIP codes and the annual salaries of the families seeking to buy them, allowing for market differences throughout the county.

For example, a buyer who earns 60% of the AMI could purchase a qualifying studio home in the Highland Springs 23075 ZIP Code for $111,150, while the same person or household could buy a studio home in the Glen Allen 23059 ZIP Code for a maximum price of $122,250. A household earning 120% of the AMI could purchase a three-bedroom home in Highland Springs for a maximum price of $336,450 or in Glen Allen for $370,100.

“The gaps [in maximum sales price] will differ based on income of the household, will differ based on bedroom [totals], will differ based on what ZIP Codes you’re in,” Burton said. “We wanted to accommodate the different markets, submarkets that the county has and make sure that we can find price points that work for the development community but that also make a difference for homeowners that will take advantage of this program.”

Three Chopt District Supervisor Misty Whitehead wondered aloud whether the county could face any liability concerns if potential buyers who aren’t selected for an affordable unit file lawsuits or claim discrimination, but Henrico County Attorney Andrew Newby said it would not. Burton added that PHA and Henrico would not be involved in selecting potential homebuyers.

To prevent against house-flipping, buyers who purchase an affordable unit would have to make it their primary residence and could only sell it, within an initial 10-year window of time, to another purchaser who qualified at the same AMI level.

The maximum sale prices would include any homeowners association fees, according to Henrico Community Revitalization Director Eric Leabough.

County and PHA officials already have spoken with a number of developers and builders and on Wednesday publicly identified planned communities in four of the county’s five magisterial districts that could potentially apply and qualify for the the fund; among them are Avenlea in Short Pump, a planned 1,600-unit community; Settler’s Ridge in the Varina District; GreenCity in the Fairfield District; and Discovery Ridge in the Tuckahoe District.

The likely creation of the new R-4B zoning district, for which board members expressed support, would give builders and developers new flexibility in designing more densely-structured developments, perhaps allowing about 10 units on one acre of land in some cases, according to Henrico Planning Director Joe Emerson.

Since the district would be a new classification, any project proposed to meet its standards would need to work through the county’s rezoning process, including public hearings before the planning commission and board of supervisors.

First, the planning commission will need to initiate a zoning code amendment to propose the new zoning district, which the board of supervisors then would approve.