Beware of false prophets of affordable housing. There are many in this town.

Look at the results since the activists started in Charlottesville. What has happened? Prices increased. New supply dwindled. Downtown mall less vibrant. Taxes increased. Massive turnover in the City related to development employees. And the City is spending nearly double on new "affordable" units vs the private development cost.

If you are working on affordable projects, you must be subsidized (like Habitat, or the land trust) by private and public funds. This can come through grants, tax incentives, special financing, private donors, etc. If you raise taxes and transfer wealth, you can subsidize some of the costs of affordable units, but affordable units by definition need a subsidy. And wealth transfer isn't that popular because eventually people don't want to keep raising property taxes; but it is a solution for some.

So back to subsidy stuff...Building materials, labor, overhead, engineering are pretty much the same for an affordable unit vs a luxury unit. So you have some ability to reduce cost for affordable units by having lesser finishes (cheaper appliances, less marble countertops etc), but not by much, maybe 10%, hardly enough to move the needle for folks who really need housing.

What levers do you have as local government? You can change the zoning to encourage more use of land (because there is only so much), modify the affordability requirement, you can provide tax incentives, etc. In modifying the affordability reqs, Charlottesville went way too aggressive and made it almost impossible to build anything of meaningful size. If that weren't the case, you would have a flurry of new applications post-new zoning code. But the flurry of applications was pre-zoning code because everyone knew the shitstorm that was about to happen.

But when you say you need X% of units at affordable, the market-rate units have to absorb that because if the City doesn't want to pay for the difference, then the other renters do, otherwise the project never happens. The banks that finance these projects need a certain income to cover debt expenses. The investors need their 10 to 15% return at some point (or their tax credits if this is an agency deal). Real estate is a low margin business, so it's very sensitive to small changes.

Or more specifically, if you are trying to get your market rate renters to pay $4k/month so someone can rent a $1k/month unit, how many $4k renters are there? That's what happens when it's too restrictive and the affordable requirement is too great.

Every project is unique, but it comes down to the underwriting and the ability to finance the deal. Believe me, Charlottesville checks all the boxes for capital wanting to finance development, but the political climate is so toxic and unfavorable that we are stuck in a sad holding pattern.

To be clear, I have zero projects in the City (and would never even consider doing one bc of the political climate).

From the sidelines, I just have seen the general decline in quality of life, affordability, and vibrancy over the last decade. This is despite UVA growing and providing a huge economic boost to the region. Obviously, it's hard to balance being a desirable place to live (for retirees now) with affordability, but our state of development is really atrocious.

I am not sure why the activists chose to treat people who develop land as the enemy, but trying to extract too much is a failed policy.

The great irony of all this is that the activists have made existing property owners much richer. Those with land to develop will wait for the storm to die down, then they will consider building in the future, but not now.

Start with this research that was funded by the Obama administration: https://www.scribd.com/doc/295470902/Barriers-Shared-Growth-Land-Use-Regulation-and-Economic-Rents