One of five recipients of CHC's $30 million NMTC allocation is Piedmont Housing Alliance in Charlottesville, Virginia. They plan to use tax credits from CHC for two projects. One involves a neighborhood where the opportunity for wealth creation has been stripped away over 15- years of intense gentrification pressure. The other is part of a redevelopment project that will become a true mixed-income and mixed-use community.
Charlottesville is a land-locked city that cannot expand due to agreements with the County, so the finite amount of land available means the pressure on housing costs is intense. In one historically Black neighborhood, the last 15 years has seen the neighborhood transform from primarily homeownership to one that market-rate developers and rentals have taken over. With the average price of these 1200 square foot, three-bedroom homes selling for more than $400,000, the existing lower-income residents have been pushed out. With the help of a good-hearted seller, PHA was able to buy five homes at a break-even price for the seller. After renovations, PHA will use NMTC as a critical subsidy that will make them available down to 35% AMI.
PHA's second NMTC subsidized project involved a partnership with Charlottesville's local chapter of Habitat for Humanity. Habitat had purchased a trailer park over a decade ago because it was at risk of being purchased by a developer with plans to demolish it for new market-rate homes. Over the last five years, Habitat has worked with the existing residents to prepare for the park's redevelopment while ensuring affordability and zero displacements of existing residents. Redevelopment plans for the adjacent vacant land to the trailer park include affordable for-sale single-family homes, townhomes, and affordable rental homes. While under construction for PHA's first LIHTC project of 121 rental homes and in the process of building the first batch of 20 homes built using the Habitat Homeownership model, they ran into unanticipated construction cost increases that threatened affordability. The budget for remediation of damage caused by the trailer park's failed septic system was estimated at $2 million but rose to $10 million during the pandemic. The impact on affordability would have been devastating.
“Without the NMTCs, Habitat would have had to raise their AMI target from 34% AMI to 50%-60% AMI. The NMTC piece on these first 20 homes will help ensure we can get the depth of affordability that the neighborhood deserves,” said Sunshine Mathon, Executive Director, Piedmont Housing Alliance.