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Tag: Workforce housing

Youngkin announces plan to grow workforce housing

At the Governor’s Housing Conference in Virginia Beach Thursday, Gov. Glenn Youngkin unveiled the Workforce Housing Investment Program, an initiative at Virginia Housing that will invest $75 million over five years to spur the creation of workforce-priced housing.

The funding holds the potential, according to a news release from the Governor’s Office, to “catalyze $750 million and build 5,000 units of workforce housing in conjunction with economic development projects in the commonwealth.”

Additionally on Thursday, Youngkin issued an executive order directing the Virginia Economic Development Partnership and the Department of Housing and Community Development to coordinate with Virginia Housing — which was created by the General Assembly in 1972 to help Virginians attain affordable housing — to ensure business site investment decisions take into account nearby localities’ plans to foster housing development.

Virginia has a housing supply of about 3.6 million residential units but has a housing demand of 4.1 million units, according to an analysis performed by the Department of Housing and Community Development. The current shortage of workforce housing in Virginia is 41,000 homes, according to the executive order.

The executive order also notes that an analysis from the Virginia Economic Development Partnership found Virginia’s metro areas are building new housing units at a lower rate than metro areas in competing states. Metro areas outside of Virginia are also issuing permits for new residential units at a faster rate than the commonwealth’s metro areas, according to the order.

“With record employer relocations and expansions in the commonwealth, over $85 billion in capital investment, nearly 250,000 jobs created, and a reversal of recent trends on net-out migration, it is clear that Virginia is growing and we need to make sure the supply of housing can meet our surging demand,” Youngkin stated. “The private sector is ready to step in and meet the needs of our growing workforce with much-needed workforce housing, and today’s announcement advances these efforts by accelerating workforce housing development and requiring local governments to support the housing growth that Virginia needs.”

Under the Workforce Housing Investment Program, Virginia Housing will provide loans, loan subsidies and grants up to $3 million to localities and nonprofits to develop housing for workers earning between 80% and 120% of the area median income, or up to 150% in rural areas.

To be eligible, a locality must be located within a 30-minute drive of a business adding new jobs. For a locality that isn’t economically distressed, that business must add 100 jobs. For a distressed locality — a locality with an unemployment rate above the state average or with a poverty rate above the statewide average poverty rate — the business must add 50 jobs. For a double-distressed locality — a locality with both an unemployment rate above the state average and with a poverty rate above the statewide average — the business must add 25 jobs.

The Virginia Governor’s Housing Conference, which opened Wednesday and continues through Friday, attracts more than 900 affordable housing advocates, providers and policy makers.

Work begins on phase 2 of McLean affordable housing development

Construction has started on the second phase of the two-phase Somos at McLean Metro, an affordable housing development backed by Amazon.com, SCG Development, a Tysons real estate developer, announced last week.

Work on the 231-unit first phase began in April. Phase B will add 225 new units, a mix of studio and one-, two- and three-bedroom apartments, for households earning between 50% and 70% of the area’s median income. (60% of the AMI is $64,980 for a one-person household.) 

“Somos at McLean Metro Phase B will bring high quality affordable housing options to families and individuals in a very high barrier to entry market that is walkable to the McLean Metro and all the surrounding amenities that Tysons has to offer,” Steve Wilson, president of SCG Development, stated in a news release. 

Virginia Housing, the commonwealth’s housing finance agency, has committed over $38 million in financing, as well as 4% Low Income Housing Tax Credits, which the federal government uses to subsidize the acquisition and construction of affordable rental housing. Previously, Virginia Housing committed $28.3 million for the first phase of development, according to SCG Development. 

“Innovative partnerships like this will be a driving force to continue to address the affordable housing crisis,” Tammy Neale, CEO of Virginia Housing, said in a statement. Amazon, through its Housing Equity Fund, provided an $18.2 million low-rate loan for Phase B of Somos at McLean Metro.

HQ2, Amazon’s East Coast headquarters in Arlington County, began a phased opening in June 2023.

In 2021, Amazon launched the Housing Equity Fund, a $3.6 billion commitment to create or preserve more than 35,000 homes for low- to moderate-income families in areas where the company has offices: Seattle, Washington; the Washington, D.C., region and Nashville, Tennessee.

For both Phase A and Phase B of the McLean project, the Housing Equity Fund has committed over $47 million.

“In addition to creating much-needed affordable housing, Somos at Mclean will connect individuals and families to transit, employment and other critical resources across the DMV,” Senthil Sankaran, managing principal of the Amazon Housing Equity Fund, said in the news release.

According to Apartments.com, the average monthly rent in McLean is $2,350 in November, and the Zillow Home Values Index put the average McLean home value at $1.3 million, according to data through Sept. 30.

Fairfax County is providing more than $15.8 million in financing to the Somos project, in addition to more than $11.4 million awarded in Phase A. Fairfax County also invested more than $19 million to buy the property. 

Freddie Mac, the government-sponsored home mortgage company, made a contribution of $32 million of tax credit equity through Hudson Housing Capital, a New York financial services company, for the housing project. 

“This new housing is the result of creativity and commitment from both the public and private sector, and a great example of how Freddie Mac can inject the equity needed to get complex deals over the finish line,” said Peter Lillestolen, vice president of targeted affordable housing at Freddie Mac Multifamily.