Daily Stock Market Reports

Blacksburg, Montgomery Co. leaders talk affordable housing | Govt and Politics

CHRISTIANSBURG — A measure that would give Montgomery County a permanent stock of affordable housing — especially as concerns build over the future of the real estate market — is gaining more momentum.

The county Board of Supervisors, through simple thumbs-up gestures this past week, has agreed to add the topic of an agreement related to the proposed creation of a community land trust to a future meeting agenda.

Supervisors and their senior staff heard more on the long-discussed land trust proposal during a joint meeting with the Blacksburg Town Council.

“I think it’s something that we in the county, and just about everywhere else, have been talking about: Affordable housing and the need, and how do we address those issues,” said Board of Supervisors Chairwoman Sherri Blevins, who added that she anticipates going over the agreement in the coming weeks.

The land trust is one measure that’s being pursued as the area is grappling with rising home prices, trending with the national housing boom that started during the pandemic. Blacksburg has also been somewhat of a unique case as it has for years been one of the most expensive real estate markets in western Virginia — and town officials have said over the past several months that the national crisis has exacerbated the issue.

People are also reading…

Blacksburg officials and many town residents have advocated for more affordable housing options and voiced concerns about the problem effectively keeping out a certain section of the local workforce from living there.

The land trust would aim to ease first-time homebuyers’ entry into the market, particularly those considered to be earning lower incomes or who have certain cost burdens.

Under a land trust, a nonprofit owns the land on which a separately owned house is located, Blacksburg officials have said. The homeowner and nonprofit have a lease that gives the former the exclusive rights to use the land.

A trust would place a cap on how much a home within the program can appreciate. Instead of relying on typical factors such as sales of similar properties and current market trends, the value would be based on income growth in the area.

A video on the town of Blacksburg’s YouTube channel provides an example on the pricing structure of a home in a trust. The roughly 12-minute long clip was shared with several of those who took part in the recent joint meeting.

For example, a home with an original market value of $300,000 would have a purchase price of $200,000 due to the aid of a $100,000 subsidy that could come from grants or other forms of outside funding.

As also explained in the video, the resale price of that $200,000 home a decade later would top out at $252,000 due the restrictions set by the trust. That maximum resale price was determined by calculating the growth of those earning 80% of the area median income during that 10-year period with the home’s original purchase price. That percentage of the area median income in Montgomery County grew by 26% from 2010 to 2020, according to the clip.

Matt Hanratty, the assistant to the Blacksburg Town Manager and one of the point persons on the land trust discussions, said the funding to build units and provide subsidies that would ultimately lower the purchase prices would come from a variety of sources. They include Community Development Block Grants, NRV HOME Consortium, State HOME funds, New Market Tax Credits, American Rescue Plan Funds, Housing Trust Fund and low interest loans from Virginia Housing.

The trust calls for a partnership between Community Housing Partners, Blacksburg and Montgomery County. CHP, well known in the area for its affordable housing developments, would serve as the lead entity and manage the trust operations, according to the proposal.

County and Blacksburg officials said it was determined CHP was the most well suited for the proposed role due to its overall track record on affordable home ownership and the organization’s experience with attracting the subsidy funding and capital needed to support the development of land trust units.

CHP, however, does expect ongoing financial support in the operation of the trust, officials said.

Hanratty addressed the operation that the local governments would provide funding to as part of the partnership.

“Operations would cover expenses for the staff support to operate and run the CLT [community land trust], legal services to establish new units as CLT units, indirect costs such as IT support, human resources, accounting, etc., any necessary insurance as part of the CLT, cost-of-living adjustments and a repair reserve,” he wrote in an email.

Contributions from localities to support such operations are not unusual, the video clip on the land trust pointed out. As an example, it referred to the city of Burlington, Vermont, which provides funding through a penny of its real estate tax.

The funding model would be based on the number of housing units that are in the land trust, Hanratty said.

Blacksburg Mayor Leslie Hager-Smith said some of the federal pandemic relief the town received could be possible sources of funding for a land trust.

“We’ve spent a very long time planning, researching, surveying. We’ve absolutely documented the need for housing in our area,” the mayor said. “This looks like it could be a really good use of the funds.”

Affordable housing has long been identified as an urgent need and the issue affects everyone in the county, Hager-Smith said.

“I think a preponderance of people understand that this is actually a national problem,” she said. “It feels especially severe in our county, which is one of the fastest growing in the state.”

One data point shared during the joint meeting was recent increases in average home sale prices in the area.

The average sales price in Montgomery County in 2021 was $315,680, an increase of 8.8% from 2020. For Blacksburg specifically, that average figure was $384,474, up 5.1% from 2020.

While Blacksburg has long been a focus on the issue of housing affordability, it was pointed out during the recent discussion that the land trust wouldn’t be exclusive to homes in the town. Officials brought up the Montgomery County community of Riner as another area that could be focused on due to the significant growth it has experienced over the past several years.

Read More: Blacksburg, Montgomery Co. leaders talk affordable housing | Govt and Politics

You might also like