11.1 Primary solutions
11.1.1 Increase capacity and impact of Bedford Housing Coalition
Issue: Current efforts to coordinate and advocate for housing may not be sufficient to address quickly growing needs.
The Bedford Area Resource Council manages the Bedford Housing Coalition, a group of practitioners and advocates involved in housing, homelessness, and social services. The Coalition meets regularly to provide updates, discuss challenges, and identify opportunities to improve housing outcomes for Bedford residents.
However, accelerating demand for housing in the county—coupled with the limited ability of existing lower-income residents to absorb rising costs—is destabilizing more and more households. Furthermore, these same trends are now worrying employers and economic development officials, as workers across the wage scale look for other opportunities in more affordable areas. Today, Coalition members and other community stakeholders are very concerned about the county’s future if action is not taken soon.
Solution: Conduct a strategic assessment among the Coalition and allied stakeholders for increasing ability to educate leaders and the public on the importance of housing.
FRAMEWORK
The Coalition and its network are a strong foundation for effective advocacy, but members have noted that the Coalition is under-resourced and members have full-time positions elsewhere that take precedence. Formalizing the Coalition into a nonprofit organization and expanding participation to include those outside housing, homelessness, and social services can help to increase visibility and support of the Coalition’s mission to “educate, collaborate, and advocate to increase and improve affordable housing opportunities in Bedford County.”
Increased participation from employers and economic development staff can potentially help to bring private sector funding to support the Coalition. Workforce housing has become a rallying point across the political spectrum and there have been emerging campaigns across the Commonwealth to learn from.
With increased funding and formalization, Bedford Housing Coalition, or simply the Bedford Area Resource Council, can hire a full-time staff member to help advance the mission of the network. This would reduce the burden on volunteer members of the Coalition and Council, and would ensure that the challenges and opportunities identified by the Coalition can be addressed effectively.
IMPLEMENTATION PLAN
Immediate (within 6 months):
- Invite business leaders and economic development professionals to join the Bedford Housing Coalition.
- Discuss with the BARC Steering Committee the potential to formalize the network into a standalone nonprofit organization.
Short term (within 12 months):
- Explore funding opportunities to support sustainability of BARC, or Bedford Housing Coalition, as a nonprofit organization.
- Explore funding opportunities to hire a consultant for organizational development and strategic planning.
Long-term (within 24 months):
- Evaluate the ability of the Coalition to hire a consultant to assist in the development of housing campaign. Consider launching a campaign around workforce housing to reach a broad spectrum of people.
RESPONSIBLE ACTORS
Bedford Housing Coalition members will be responsible for elevating this issue to the Bedford Area Resource Council and advocating for formalization and/or launching a housing campaign. Consulting firms like The Spark Mill or organizations like the Center for Nonprofit Excellence may assist in exploring nonprofit organizational development.
LEGAL, FINANCIAL, AND ORGANIZATIONAL CAPACITY
There are no legal boundaries preventing the formation of a standalone nonprofit. Current members of the BARC Steering Committee and/or Bedford Housing Coalition would likely serve as nonprofit board members. Financial requirements to hire consultants, stand up a nonprofit organization, and launch a housing campaign will be significant. The capacity of existing members will be limited.
FUNDING SCOPE REQUIREMENTS
The scope of funds required is dependent on the path that Bedford Housing Coalition and Bedford Area Resource Council chooses. Organizational development and sustainability, as well as a housing campaign, can be costly.
At a minimum, the Coalition should aim for the equivalent of one part-time position, along with a similar number to support hiring consultants who can provide marketing and messaging services.
POTENTIAL FUNDING SOURCES
Philanthropic and corporate partners are likely to be the largest supporters of nonprofit organizations addressing housing advocacy and education, including The Bedford Community Health Foundation, Greater Lynchburg Community Foundation, and United Way of Central Virginia, and Centra Health.
METRICS TO EVALUATE SUCCESS
If choosing to launch a housing campaign, measure the collective impact of the campaign by asking nonprofit and private organizations to “sign on” to the effort as supporters, setting goals by audience type, and tracking total signatories by quarter.
If choosing to create a nonprofit, donations and sponsorship can be key indicators of growing success and impact. The number of donors, overall dollars received, and amount of other funds leveraged can help quantify success and reach.
PROJECTED IMPACT
The impact of an organization whose sole purpose is to address housing challenges in the county and advocate for residents cannot be easily quantified. An organization with representation from a broad spectrum of stakeholders, however, can have substantial influence on policymaking and decision-making.
11.1.2 Attract and incentivize developers to build lower-cost homes and increase housing diversity
Issue: Bedford County faces greater housing demand than can be supplied by developers working under the current regulatory and economic status quo.
While this demand exists across the whole housing spectrum, particularly absent are lower-cost ownership options that would be more affordable to existing residents. These include essential workers like teachers and nurses. County land use regulations, along with a shortage of construction and specialty trade contractors across the region, are a major constraint on creation of new lower-cost housing.
Solution: Reorient county regulations and resources to support developers who can deliver housing options affordable to current residents.
A combination of efforts to increase the supply of lower-cost homes include but are not limited to: streamlining the development process, offering zoning and land use incentives, providing financial support, and increasing technical programs and assistance to navigate the development process.
FRAMEWORK
Attracting and incentivizing developers who can deliver lower-cost options requires a combination of financial, regulatory, and technical support. To accomplish this, Bedford County should pursue the following recommendations.
Monitor and amend permit fees as needed
In May 2023, the Board of Supervisors approved increases to county building permit fees per staff recommendations. Staff completed an analysis to compare the county to peer jurisdictions and proposed increases that would keep Bedford regionally competitive while still providing needed revenue to support the services rendered.
| Permit Type | Previous | New |
|---|---|---|
| Single Family Residential | .12 cent sf | .18 cent sf |
| Addition Residential | .12 cent sf | .18 cent sf |
| Alteration Residential | .5 cent sf | .15 cent sf |
| Electrical Residential | $25.00 | $50.00 |
| Plumbing/HVAC Residential | $25.00 | $50.00 |
| Commercial Alteration | .15 cent sf | .20 cent sf |
The full Agenda Item Summary for this action is available here: Resolution #R 052223-02 (PDF)
Staff should develop monitoring criteria to evaluate if/how these changes affect residential development patterns in the county. For the purposes of this solution, staff can focus analysis on single-family homes only. (See “Metrics to Evaluate Success” below.)
Should staff determine that the new fee structure is limiting desired development types (for any reason), potential remedies include:
- Reducing certain fees back to previous levels (or other alternative amount), for certain building types or values,
- Increasing certain fees for “high end” residential construction, and/or
- Offering partial or full fee waivers or rebates.
To encourage smaller, more affordable homes, these remedies could be made available only to certain building types, sizes, or values. For example, the county may lower the permit fee to the previous 0.12 cent per square foot for homes no larger than 2,000 square feet.
Incentives for creative single-family development options
Reach out to and identify potential builders for innovative single-family development styles. These designs should focus on lower cost via density, material type, construction method, and other factors that can reduce prices without public subsidy.
Possible approaches include:
- Modular or higher-end manufactured home subdivisions,
- Cluster development of small cottage-style homes, and
- Condo units in duplex or similarly small multifamily structures.
The most appropriate mechanisms to encourage each of those options will vary based on the county’s vision and priorities. Generally, however, strategies to incentivize such projects may include:
Pre-approved designs: Develop a “pattern book” of pre-approved designs eligible for accelerated and/or reduced permits and fees. The county can establish certain desired criteria (size, materials, style, etc.) in those plans that align with broader county development goals.
Discounted land: Proactively identify and market any surplus land already owned by the county or school board, with the condition that it be developed into the desired lower-cost housing types.
Builder grants: Provide funds to builders to cover certain planning and development costs (site plans, architectural drawings, environmental review, etc.) if the project includes lower-cost homes.
Homebuyer grants: Virginia localities do not have the power to provide real estate tax exemptions or abatements based solely on a home’s size, price, or other features. However, the county could consider a de facto abatement by offering multi year “grants” to buyers of lower-cost homes that partially or fully offset their real estate tax.
Optional density increases: Establish voluntary density bonuses within certain zoning districts that are available to projects that include a certain share (or entire share) of smaller and lower-cost single-family homes. (Also evaluate the efficacy of residential cluster options currently included in the county’s zoning ordinance, and amending as needed to promote less expensive homes.)
IMPLEMENTATION PLAN
Immediate (within 6 months):
- Examine building permit data from recent years to determine the current distribution of sizes (square footage and bedrooms), lot areas (acres), and sales prices for new single-family homes.
- Identify particular builders (if any) who have been delivering relatively affordable products. Conduct outreach (interviews, focus groups, etc.) to determine what barriers currently prevent them from building more modestly-priced homes.
- Establish process to monitor changes in development trends following permit fee changes.
Short-term (within 12 months):
- Proactively share permit trends with county leadership and make them aware of any potential changes in developer behavior and proposed projects.
- If needed, begin projecting possible updates to permit fees to incentivize lower-cost housing production. Estimate potential changes in county revenue.
- Determine what kinds of lower-cost single-family development to prioritize with incentives. (For example, small site-built subdivisions, or infill modular homes, etc.)
- Create definition(s) with stakeholder input to be used in policy and program language.
- Select specific incentive strategies (as described above) and draft guidance that aligns with preferred development type(s).
Long-term (within 24 months):
- Propose incentive packages to stakeholders and county leaders, gather and incorporate feedback, and implement upon approval.
- Conduct education and outreach to developers to encourage their participation in the incentive programs.
- Establish and track metrics to measure how successful the incentives are.
RESPONSIBLE ACTORS AND THEIR ROLES
County staff: Monitor and amend fee schedule as needed, initiate stakeholder outreach, evaluate and draft incentive program options, and provide updates and recommendations to county leadership. Board of supervisors and planning commission: Evaluate and approve staff proposals, make recommendations, establish high-level objectives and direction for incentive programs.
LEGAL, FINANCIAL, AND ORGANIZATIONAL CAPACITY
Legal:
Virginia state code (§ 15.2-958.4) grants local governments the power to waive certain fees for affordable housing. Localities must define “what constitutes affordable housing” in an ordinance, which may also include certain conditions and exceptions.
The state does not appear to place restrictions on how permit fees are structured, so long as any changes are approved by ordinance. For example, the county may in theory establish tiered fee rates for different types of single-family construction. A more formal legal opinion from the county attorney may be beneficial.
Financial:
Much of the tasks described above do not incur necessary costs beyond additional staff time. However, any changes to the county fee schedule will directly affect revenues. Depending on circumstances and context, potential fee changes to achieve the goals in this solution could be structured as revenue neutral if reductions in certain fees are paired with commensurate fee increases on other development activities.
Possible builder and homebuyer grants do require direct allocation of county funds, since the appropriate indirect tax exemption mechanisms are not allowed under state law.
Organizational:
Staff’s recent research and work to propose permit fee changes provides them with very helpful knowledge about the relationships between those costs and the residential development market. However, additional staff resources and/or outside consultants will likely be required to thoroughly investigate and propose incentive programs described in this solution.
FUNDING SCOPE REQUIREMENTS
No upfront money is required for any potential fee changes; associated fiscal impacts would occur subsequently.
To be effective, builder grants for predevelopment costs should likely start around a few thousand dollars per award.
Homebuyer grants to offset real estate taxes can also vary depending on program design. Input variables the county can control include:
- Real estate tax rate ($0.41 per $100)
- Assessed value of homes eligible for grant
- Share of annual tax amount to be reimbursed (e.g., 50 percent, up to certain fixed amount, etc.)
- Length of rebate in years
- Number of homes eligible for program in given year (or, participation is unlimited)
POTENTIAL FUNDING SOURCES
Along with unrestricted general fund revenue, some or all revenue from any future permit fee increases could be set aside for financial development incentives reserved for new lower-cost homes.
METRICS TO EVALUATE SUCCESS
- Average lot size of new single-family units
- Average finished square footage of new single-family units
- Average sales price of new single-family units
- Number of homeowners below 100% or 80% AMI
EXAMPLES AND BEST PRACTICES
The Charlottesville Homeowner Assistance Program (CHAP) is the only known local initiative in Virginia to provide direct grants to homeowners to offset real estate tax costs. Charlottesville’s program is targeted to long-term homeowners with low incomes facing potential displacement pressures. Although this policy goal is very different, the program demonstrates how localities can offer tax relief without a formal exemption or abatement.
Numerous localities in Virginia use progressive permit fee rates based on the estimated home valuation. Examples include: