Virginia Beach's first workforce housing project in the works

VIRGINIA BEACH

Do you live or work in Virginia Beach and hope to own a home?

Always seem to be priced out of the market?

The city’s first workforce housing project – Riverlake Development – could be just what you’re looking for.

Construction on the 42-home subdivision near Stumpy Lake begins in September and will include seven homes that will be discounted 25 percent for qualifying homeowners.

The city is hoping applicants who either live or work full time in Virginia Beach find out about the new housing development. Tonight, the city’s Housing & Neighborhood Preservation department will be holding a second workshop about Riverlake.

Those who are eligible for one of the workforce housing units will be placed on the city’s waiting list.

“This development is specific to Virginia Beach because we have a specific law about what it is and how it can be done,” said Andy Friedman, the city’s director of housing and neighborhood preservation, referring to the city’s workforce housing ordinance.

The City Council passed the law in August 2007, but this is the first approved subdivision under the workforce housing regulation.

“The ordinance is designed to make a new housing development available to a broader spectrum of households,” Friedman said.

Cheryl Smith, program coordinator, said the city hopes to improve affordable housing options in Virginia Beach.

The homes in Riverlake will include three- and four-bedroom homes with estimated sales prices around $270,000 to 290,000. The exact cost of the homes will be determined by the developer, Geo Development Corp., sometime next summer when construction is expected to be complete.

Smith said the sales price will be based on the appraised value of the property. In addition to meeting specific income and asset restrictions, all applicants must also pre-qualify for a first mortgage in the low $200,000 range.

Buyers will be required to finance 75 percent of the sales price for the home and will be given a discount of 25 percent. The city will hold a second mortgage on the property for the discounted amount, which will be due and payable to the city upon resale of the unit.

Also due upon sale of the property is 25 percent of the net appreciation of the property.

At that point, the city has the first right of refusal to buy back the property.

“And the city could sell to another eligible buyer on the waiting list,” Smith said. “That’s really what we want to do.” Friedman said the amount of the original discount is also preserved for the next buyer.

“So that we have a long-term affordability program,” he said.

Assuming a 25 percent discount, the new Riverlake Development allows a home­owner to buy a $240,000 home for $180,000.

“That’s where the affordability comes in,” Smith added. The resident would pay back the $60,000 discount later, when he or she sells the home.

Not every workforce housing project created under the new city program will offer a 25 percent discount like Riverlake. That discounted amount can fluctuate between 1 percent and 25 percent, Smith said.

In future workforce housing developments, the net appreciation value will also vary to reflect the amount of the original percentage discount.

Since the city announced it was compiling a waiting list of qualified homeowners for the Riverlake units, Smith has fielded questions about the resale of the properties.

“The feedback we’ve received is very positive,” Smith said. “They see that it is a very good deal.”

As for the yet-to-be-built units, once constructed, they will look like the remaining 36 homes in Riverlake.

“Our whole goal was to create quality housing that was indistinguishable from the house next to it,” Friedman said. “There won’t be any indication to anybody that the owner acquired these at any discount.”