What is an Affordable Housing Fund?

An affordable housing fund is an ongoing dedicated source of public funding designed to support the preservation and production of affordable housing.

How does an Affordable Housing Fund work?

Because creating affordable housing is not very profitable, affordable housing projects often require financial investment from multiple public sources. Federal and state programs also require a matching local investment before they will provide funds for an affordable housing project. An AHF provides a flexible source of local funding to leverage other public, private, and philanthropic investments in affordable housing or support investments (fill gaps) that would not otherwise be filled through existing public programs.

How is the Town of Blacksburg furthering this strategy?

The Town of Blacksburg established an Affordable Housing Fund to help increase the number of affordable homes developed for our workforce (non-students), provided these homes remain permanently affordable. Long-term affordability is important because these investments are expensive and the Town wants to ensure that they benefit as many households as possible. Permanent affordability for owner-occupied housing would be achieved by writing down the price of the home to a price that is affordable for a lower-income family and then restricting the sales price upon resale so it can remain affordable to all subsequent low-income families who purchase the home. For rentals, long-term affordability would come in the form of a requirement that the developer keep rents affordable to households of specific Area Median Incomes for a specified period (greater than 60 years). Blacksburg is using $4 million in American Recovery Plan Act funding to seed the Affordable Housing Fund but still needs to identify a dedicated ongoing source of revenue to ‘fund the fund’. Stay tuned for more information on affordable housing fund project awards.

What is a Community Land Trust?

A CLT is a community-based organization that uses public and private investment to acquire land and provide affordable owner-occupied housing on behalf of a specific community.

How does a CLT work?

Residents can purchase a CLT home, but not the land on which the houses sit. Instead, residents enter into low-cost, long-term property leases with the CLT, known as ground leases, typically for a 99-year period. Although CLT residents can never sell the land their home is on, they otherwise have the same rights and responsibilities as other homeowners (maintenance, taxes, etc.). The initial investment to write down the price of the home plus the removal of the land value is what makes the home more affordable for the homebuyer. In exchange for the assistance provided to enable the purchase of a home, they would not otherwise be able to afford, CLT homeowners agree to limit the price at which they can sell their homes. This still enables CLT homebuyers to build equity and eventually purchase a home in the traditional marketplace. However, it also keeps the home affordable to future limited-income households – without requiring the investment of additional public or private subsidies to make the home affordable again.

What is the Town doing to further this strategy?

In 2021, a CLT Steering Team worked with a consultant to explore the feasibility of establishing a Community Land Trust in Montgomery County. Town and County staff finalized the details of a management and operating model for a county-wide CLT in the summer of 2022. Community Housing Partners (CHP) will be charged with managing the new CLT, named New River Home Trust. They are currently in the start-up phase. The Town sees this as an important affordable housing strategy for providing a housing stock affordable to first-time homebuyers.

As the need for cost-effective housing grows, the Town is seeking partnerships with local employers, developers, nonprofit organizations, federal and state government-sponsored entities, realtors, lenders, and investors. This will mean more proactive engagement by the Town with partners to generate opportunities outside of those presented to the Town during the land use process.

The Town is also working to identify strategies that connect employers and their workforce with developers who can help meet the housing needs identified and comprehensively address the various barriers to increasing the supply of more housing at affordable price points.

Stay tuned for more details!

Community Housing Partners (CHP) received approval to develop Stroubles Ridge, a homebuyer subdivision off Merrimac Road, which will include a mix of 49 single-family and duplex 3 bed-2 bathroom homes. These for-sale homes will serve families earning between 60 and 100% Area Median Income. This year CHP requested and received a Boundary Line Adjustment, to bring the property into the Town of Blacksburg. The project also received a commitment of $1 million dollars of the Town's CDBG funding which will help Community Housing Partners access the additional State HOME funding and New Market Tax Credits needed to ensure the entire development is affordable. Once this subdivision is complete, it will represent the largest investment in affordable homeownership units in the New River Valley to date.

What is an accessory apartment?

Accessory apartments are a great opportunity to create a different kind of rental housing option for young professionals, single parents, and older adults. Accessory apartments will ordinarily rent at a price within the means of lower-income persons. They also provide rental income for the primary homeowner.

What is the Town doing to further this strategy?

Currently, the Town of Blacksburg allows for attached accessory apartments (within the primary structure) but does not allow detached apartments.

The challenge is how to expand the development and use of accessory apartments to support the housing needs of our workforce while limiting their use by students or short-term renters. The Town is currently considering requirements related to owner occupancy of the primary unit, size, design, and rental length, among others. The Town plans to amend the existing Accessory Apartment ordinance later this year.