"Charlottesville city councilors are considering setting aside $1 million from the city’s economic development fund to create new affordable housing projects.

Though councilors will not discuss the proposal until next month, a majority said in interviews that they are open to allocating money from the $4.3 million fund for loans or grants to developers who want to build workforce housing in Charlottesville. However, councilors have yet to see any specific development proposals.

Developers have been reluctant to include affordable units in new projects in Charlottesville, and the city has had no ordinance obliging them to do so. Last month, though, the General Assembly gave the city the ability to grant developers increased density in return for affordable housing units or cash contributions.

The city may use the $1 million from the development fund to entice developers to invest in a mixed-income project, several councilors said. And such a development would help the city achieve its goal of getting more moderate-income workers to live in Charlottesville.

“It adds some diversity to the notion of affordable housing,” Councilor Holly Edwards said. “There hasn’t been a great emphasis on the workforce, like teachers, firefighters and health-care providers.”

This year the city has made an unprecedented investment in affordable housing initiatives - $2.1 million. But in the upcoming budget that number drops to $1.4 million, which is still significantly more than in prior years.

Last month councilors voted, 3-2, against dedicating annually the equivalent of 2 cents of the real-estate tax rate and 25 percent of Charlottesville’s lodging tax revenues for affordable housing programs, or about $1.7 million.

If the council endorses the new idea, it would be the first time that money from the economic development fund has been spent on affordable housing. The fund was created in the 1990s so the city would have money readily available to spark investment and to attract or retain large-scale employers.

The city has used the account to provide loans to SNL Financial for a new headquarters and to Coran Capshaw to build the Pavilion. In recent weeks the account has drawn increased scrutiny after The Daily Progress reported that most of the recent expenditures from it have occurred without a public vote by the council - and that at times councilors were unaware of projects receiving money.

Mayor Dave Norris said that promoting workforce housing is as integral to the city as any other project that has received money from the account.

“Housing development is one of the best economic development generators we know in terms of promoting jobs and business activity,” Norris said.

Other councilors had various views on how to proceed. David Brown said he is interested in discussing allocating money from the account for affordable housing, but wants to make sure there’s enough left over for the city to take advantage of any investment opportunity that comes along.

Satyendra Huja was also supportive of the idea, but thinks that $1 million might be too much.

The city “should start small and see if it works before we make more of a commitment,” he said.

Finally, Julian Taliaferro said the plan is “worth looking at,” but added that he would like the city to spend more money from the account on creating jobs and bringing new business to Charlottesville.

Councilors have scheduled an April 22 work session to further discuss the idea." (Seth Rosen, The Daily Progress, March 24, 2008)