100708 WORKFORCE HOUSING
City c:>f Virgi~ia Beach
OFFICE OF THE CITY MANAGER
(757) 385-4242
FAX (757) 427-5626
VBgov.com
MUNICIPAL CENTER
BUILDING 1, ROOM 234
2401 COURTHOUSE DRIVE
VIRGINIA BEACH, VIRGINIA 23456-9001
October 2,2008
The Honorable Mayor
Members of City Council
Dear Counci1members:
RE: Briefing on Workforce Housing
Attached is a copy of the presentation on Workforce Housing that will be briefed to you on
Tuesday, October 7 by members of the Workforce Housing Advisory Board and the Department of
Housing and Neighborhood Preservation. The presentation covers proposed changes in the
Workforce Housing ordinance as well as the adoption of final documents needed for program
operation.
You may recall previous correspondence this summer in which we identified the issues in the home
mortgage lending industry that required additional time to obtain review and approval of our
program. We have now completed that process and are ready to present the program to you.
This briefing is the first step in a three-step process for your consideration of the program. We have
scheduled an opportunity for public comment on October 14, and a vote on the actual ordinances
on October 28.
Please contact Andrew Friedman, Director of Housing and Neighborhood Preservation at 385-
5752 if you have questions or need additional information.
With Pride in Our City,
Attachment: "Final Program Recommendations of the Workforce Housing Advisory Board"
c: Steve Herbert, Deputy City Manager
Andrew Friedman, Director of Housing and Neighborhood Preservation
.,.... ....... ,....
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· Dan Baxter
· Henry Boyd
· Cheryl Davidson
· Mary Kay Horoszewski
· Bob Miller
· Ron Ripley
· Richard Thurmond
· Gerrie West
· William Adam White
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City Attomey's Office
· Bill Macali
· Alex Stiles
· Becky Kubin
City Staff
· Cheryl Smith, Workforce Housing Coordinator
· Sharon Prescott, Housing Development Administrator
· Stephen White, Planner
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· From October 200fthrough August 2008 th8 WFHAB .
met with staff and the VBCDC to develop the complete
program requirements.
· The WFHAB voted on August 25. 2008 to recommend
these program requirements to Council.
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· No windfalls for developer or purchasers - affordability
is preserved over time.
· 83% of the development consists of market rate
units.
Refresher: How the
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Housing staff~":':"
· Completes a WFH Supplemental Application that is
part of the Rezoning Application.
· Planning Commission Review
· City Council decision
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Refresher: How the Bonus Density
III Base Units
o New WFH Units
o New Market Units
How People Get the Chance to
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· Qualified buyers will be referred for purchase at the
appropriate time.
· DHNP will work with buyers, developer and lenders to
ensure the process flows smoothly.
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How Affordability is Created and
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· The city has the first right of refusal to purchase units
that the owner decides to sell and can thereby
preserve affordability through re-recording the second
mortgage.
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""FH Provides a
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Required Down Payment
Cash Needed to Close
Housing Expense: Principal & Int.
Property Taxes
Mortgage Ins.
Condo Fee
TOTAL MONTHLY EXPENSE
$5,772.65
$1,124.92
198,00
75,00
150.00
$1,547.92
$7,200.00
$13,093.90
$1,454.89
198.00
97.00
150.00
$1,899.89
Minimum Annual Income Required
$61,917,00
$75,996,00
$14,079.00
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· Potential income from future capture of resale
proceeds.
· City is not investing in the units or the development.
· A fund or account is needed to isolate program costs
and revenues. 13
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· Income Guidelines and Sales prices
· Outline of Complete Package of Information
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,l A more simplmed process was adopted>baSed o~;:;~s
City County's Affordable Housing Program.
II This new process will be less costly to the Eligible Buyer
in terms of closing costs.
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J,ames City County's Affordable
· There are additionai developments with unitS
proffered that are not yet under construction.
· Target income group are households with incomes
at 80% of the area median (this is the lowest
income group our program targets).
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New Town Development in James
EXAMPLE:
Developer and City
enter into participation
agreement to offer
units at Discounted
Sales Price of
$180,000.00 (25%
discount from market
rate).
EXAMPLE:
Developer seils to eligible buyer for $240,000,00 (market rate)
i. FIrst Deed of Trust for Discounted sales Price
$180,000,00 +
ii. Second Deed of Trust to City to secure WFH Discount
of $60,000.00 (25% of $240,000.00) and a proportionate
share of any net appreciation on resale, and
iii. A 1st right to repurchase/assign unit on resale
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' · ReVi$ibn of AppraISal Proeess at Resale
· Clarification of Language between Ordinances and
Program Description for Consistency
· Revised Sales Process
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folloWS:
1.) An application fee for all applicants for whom
DHNP verifies information and pulls tri-
merged credit report.
2.) A program administration fee for all
purchasers.
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. Re-verify information shortly before unit availability
· Maintain records of all activities
· Annual compliance requirements
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. thfOugh the lOan' tlOsing~ InCllJdlngbut'nCifumited to
working with the lender, completion of WFH program
documents, reviewing loan documents, and getting the
buyer through the loan closing.
· The revised sales process is less costly than originally
envisioned since it is one direct sale.
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Income Guidelines and Sales: Prices
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· Program requires semi-annual review and adoption of
guidelines and prices based on WFHAB's
recommendations.
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Ilncome Guidelines and Sales
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Hhlel '
Size
1 $36,456 - $54,684 $101,828 - $165,252
2 $41,664 - $62,496 $119,949 - $192,434
3 $46,872 - $70,308 $138,071 - $219,615
4 $52,080 - $78,120 $156,192 - $246,797
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· DHNP Fees
· Program Participation Agreement Between Developer
and City
· Program Participation Agreement Between City and
Buyer
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What's in the
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· Zoning Ordinance
· Ordinance to Establish a WFH Revolving Fund
· Ordinance to Adopt the WFH Program Documents
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for-sale program~
Upon adoption of the board's recommendations by
Council, this will complete the for-sale component of the
WFH Program.
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-WfiHAB cOO!1nh
of the program. '
· Once rental aspects of the program are completed
and approved, WFHAB will meet at least semi-
annually to evaluate the program and to update sales
prices and rents.
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Keys to Program Success in the
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leagues to promote the program,"
· Council review and potential acceptance of a first
project will be needed for the program to succeed.
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Your Comments an, Questions!
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