VIRGINIA BEACH — Two forthcoming residential projects could be the first in the city to receive a financial incentive designed to encourage construction of low-cost housing in Virginia Beach.
The Silo Apartments and Grand Lake Senior Apartments meet the eligibility criteria for the Attainable Workforce Housing Performance Grant, Sharon Shoff, the city’s housing development manager, told the Virginia Beach Development Authority Tuesday. The grant aims to encourage private development of safe, affordable housing the city is lacking. It helps developers qualify to borrow additional money, closing a gap that occurs when low rent is charged.
Grand Lake’s developer would be eligible for a $188,000 rebate in its first year and would have 19 units with rent as low as $600 a month, a rarity in Virginia Beach where the median rent is more than $1,700 a month.
The grant is a rebate on a percentage of the real estate tax over a period of time. Developers will pay taxes only on the original value of the property, which allows them to secure better financing. The duration will be 15 years, with an option to extend for an additional 15 years.
“There’s no impact to the general revenues of the city,” Shoff said. “It’s only coming from the incremental taxes generated by the project.”
In 2022, the Virginia General Assembly authorized development authorities, in conjunction with their local governing bodies, to provide grants associated with the construction of affordable housing. Virginia Beach mirrored its program after a Richmond initiative.
On Tuesday, the Development Authority unanimously approved the grant for both of the projects. The City Council is scheduled to vote on them next week.
Taylor Franklin of the Franklin Group Cos. is the developer of both Grand Lake and the Silo. Franklin, who served as the vice chair of the Virginia Beach Development Authority, abruptly resigned from the position Sept. 22, according to his resignation letter, which did not include a reason.
City Manager Patrick Duhaney told the City Council Tuesday afternoon that Franklin did not participate in the grant process while serving on the authority, and Franklin resigned before the body voted on the matter Tuesday.
Virginia Beach has been exploring ways to grow affordable housing options. The median rent in Virginia Beach is $1,750, which requires earnings of roughly $70,000 per year or more than $33 per hour in a full time position, according to the city.
One in three households in Virginia Beach are considered cost burdened, which means about 62,000 of them spend more than 30% of their income on housing costs, Shoff said.
Under the performance grant program, Franklin Group would receive a rebate of $188,503 in its first year for Grand Lake and $216,179 for Silo.
To be eligible for the grant, 20% or more of a project’s residential units must be affordable at or below 50% of the area median income. The maximum annual gross income for a single person at 50% of the AMI is $37,300. Nineteen of the units at Grand Lake will be available for households at 30% of the AMI, or $22,380. A one-bedroom apartment at Grand Lake that meets the 30% of income rent limit would cost $600 for rent and utilities, Shoff said.
“I know seniors that fall into that category,” Councilman Michael Berlucchi said at the council meeting. “They’re worried about having a roof over their head, so I’m pleased to see movement.”
Rent restrictions are required during the 15-30-year grant period.
Construction of Grand Lake at 5366 Virginia Beach Blvd. will begin at the end of the year. It will have 172 units for ages 62 and older. Of those, 89 units will be set aside for households at or below 50% AMI.
Silo Apartments at 2641 Princess Anne Road will include housing for households with higher incomes, at 50% to 80% AMI, and without age restrictions.
The City Council in July approved a rezoning application that increased the Silo’s acreage and brought the number of multifamily apartments up to 200, despite community concerns about density in the city’s rural area.
Franklin Group recently increased the project’s number of attainable workforce units to 100%. Construction is scheduled to begin next summer.
Stacy Parker, 757-222-5125, stacy.parker@pilotonline.com
