The Challenge of Affordable Housing
The Nelson Center
February 20, 2008, 7:30 PM
General Introduction:
Conny Roussos, President of Rural Nelson, opened the meeting at 7:30 p.m. and thanked everyone in attendance for coming
despite a forecast of snow and ice.
Announcements:
March 18: The Rural Nelson Annual Meeting at the Shannon Community Center in Afton.
April 5: Rural Nelson's Second Community Dance at The Hamner Theater in the Rockfish Valley Community Center.
Speakers:
George Krieger, Director of Nelson County Community Development Foundation (NCCDF)
Conny introduced George Krieger, Director of The Nelson County Community Development Foundation and the main speaker for the evening on Affordable Housing in Nelson County. Conny noted that realizing the goal of affordable housing for all is an ever elusive goal. Two of the key issues are land and money.
The Nelson County Community Development Foundation exists, in large part, to address the needs of lower and middle income individuals and families.
Challenges to Affordable Housing
Mr Krieger first addressed the primary challenges to affordable housing in Nelson County. He noted that one very important need in central Virginia is finding affordable housing for the workforce. 70% of Charlottesville police live in Waynesboro due to lack of affordable housing where they work. The Central Virginia area also lacks adequate housing for seniors, low-income individuals and families and those with special needs.
Mr Krieger also noted that modern housing must keep pace with the times. NCCDF and volunteer organizations such as Habitat for Humanity are now incorporating energy efficiency into their plans. Solutions for affordable housing will also involve
coordinating transportation and building planning.
Affordability
The term "affordability" applies not only to building costs but to maintenance costs as well. Most families spend at least $700 for rent and utilities. 50% of Virginians pay more than 50% of their income for rent. The recommeded percentage of income to be paid for housing is 30% of income or less. Higher mortgage payments impacts a family's ability to afford food, medicine and other necessities of life. Even if a family can afford mortgage payments on a house there may be other impediments to home ownership. These include the difficulty in finding appropriate land, cash required for a down payment and closing costs and finding local contractors willing to implement energy efficient building techniques at a reasonable cost in order to keep expenses affordable.
The Nelson County Community Development Foundation is a sub-recipient for housing funds for Nelson County. It is part of a six-county planning district commission that brings in money for affordable housing. NCCDF must handle prioritization of funds for competing clients and must ensure that clients meet qualifications for various programs. The elderly and disabled are often of special concern.
NCCDF helps first-time homebuyers find financing. NCCDF buys land for affordable housing qualifies applicants who apply for assistance and often helps with down payments and closing costs. NCCDF acts as a general contractor and
developer without taking profits for those services. This helps make home acquisition affordable for those in need.
Home Purchases, Rentals and Rehabs
Mr Krieger's Powerpoint presentation showed plans for the Wolf Run low income development in Arrington. He noted with the current market and interest rates that it is advantageous for younger people to sign up for a 4 1/2% mortgage at a fixed rate for 30 years. NCCDF may ocassionally buy houses at foreclosure, renovate and resell them. In addition to home sales NCCDF engages in multi-unit developments and affordable single unit rental development. NCCDF strives to set rents and qualify renters so that they pay only 30% of their income for rent. In addition to home sales and rentals NCCDF has a program in which it is able to rehab sub-standard housing, and another in which they perform emergency repairs for the elderly and disabled. This funded through a revolving loan fund.
Mr. Krieger pointed out that many or most of the most affordable home sites have already been taken, and it's
harder now to find houses eligible for rehab. Many of the home rehab projects have been done on kit homes that were never completed. For example, several rehapbs have been performed on Jim Walter homes. Many of these are found throughout the county in an unfinished state. They appeared to many low income individuals to be affaordabel housing at the time they were purchased but completing the construction proved to be financially prohibitive for many home buyers
Mr. Krieger addressed the issue of increasing affordability. One method is to subsidiize the purchase in some form or another. Market forces dictate the cost of land purchase, home construction and repair and market forces are unpredictable and uncontrollable. Mr. Krieger noted that in today's market and demographics it is important to design homes for broad market appeal, sustainability and accessibility. Printed information on green building and certification was available at the meeting for attendees.
Construction Considerations
One method of enhancing long-term affordability is correct site orientation. This can maximize energy efficiency, reduce repair costs and provide a more comfortable living environment. Another method that has come into use is stacked framing. This enables builders to achieve more construction efficiency; reducing the cost of homes while providing better energy efficiency. New methods such as this often present difficulties for carpenters who may not have been trained on new construction mehtods. Mr. Krieger noted that although there may be a learning curve problem once builders acquire experience with such techniques they see the advantages and embrace them. Another newer technique that yields heating and cooling efficiency is insulating the interior walls of crawl spaces and basements as opposed to the underfloor. House
wrapping also yields good returns on energy costs. Several of these methods used to be expensive and only appealed to wealthier home buyers. However, as they have gained acceptance and their use has become widespread they have become affordable. Mr. Krieger also mentioned the advanteges and keeping HVAC systems inside the house if possible.
As mentioned earlier in the presentation, accessibility and visitability are two things being emphasized now in
house design. 34-inch doors used to be special order, now they are stock items. No-step entry is also highly desirable.
In terms of safety, it is crucial to avoid products that compromise the interior environment such as building supplies that contain formaldehyde. Grab bars for toilets and baths are useful, especially for the elderly and disabled. Cost effective techniques to accommodate these needs are now available for much less than in the past. Geothermal heat is a concept that potentially can reduce ongoing costs. However, the initial costs are still high. Similarly some water recapture systems can be either simple and inexpensive or quite complicated and costly. Solar electricity currently does not give an adequate return on investment for low incme housing although future research and development may bring the price down. Harnessing the power of the sun which supplies a potentially free and unlimited supply of energy is a very tempting goal. On demand hot water quickly heated by gas is a new trend, but works best when there isn't a constant need for
hot water, as in a large household. Bamboo flooring is another new trend which claims to use a sustainable resource. Due to the fact that it is currently shipped a long way and that growing techniques may require energy the affordability of this resource is currently disputed. Mr. Krieger suggested that attendees perform an Internet search on the words/phrases "green building," "sustainable" or "visitability " for an interesting afternoon of reading.
Other options for initial and long-term affordability are the following.
- a state housing trust fund that could create a bank that organizations would borrow from in order to
build
- zoning ordinances that requires developers to set aside a portion of developed land for affordable housing.
- Cluster housing and shared housing are two other creative development strategies.
In his role as general contractor Mr. Krieger does all of the permitting and much other preliminary work. This takes a significant and time-consuming burden off of sub-contractors and because of this NCCDF is able receives lower bids for jobs.
George pointed out that even with all of the methods NCCDF employs it is still barely making a dent in the problem of placing needy individuals in affordable housing.
Conny thanked George for an excellent presentation and then introduced Mr. Waskie from Habitat for Humanity.
Mr. Waskie, Nelson County Habitat for Humanity
Mr. Waskie gave a brief presentation on Habitat's activities. He explained that Habitat partners with low-income families, who are required to put in "sweat equity" hours. Habitat provides mortgages at no interest. They have no paid employees and have been very successful raising funds. Because of this Habitat is able to build houses at a cost far below market value. Mr Waskie noted that with more volunteer labor to qualify home buyers and build houses Habitat could put up many more houses. Mr. Waskie added that Habitat makes a special effort not to put a homeowner into a house for which they cannot afford to pay the mortgage.
Questions
The floor was then opened and Mr. Krieger and Mr. Waskie answered numerous questions from the audience.
Subsequently the meeting was adjourned.
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