By Cody Mello-Klein | [email protected]
City Council unanimously approved a $10.5 million loan to help fund the first phase of development on the Alexandria Housing Development Corporation’s Mount Vernon Avenue-Glebe Road affordable housing project during Tuesday’s legislative meeting.
Council approved the $315 million mixed-use housing project in May 2021 in an effort to bolster affordable housing in Arlandria as the area grapples with gentrification from the impending arrival of Amazon.
“We’re looking to address both the housing needs of the community over time, mitigate displacement, provide new housing resources in the event market forces begin to reposition properties,” Helen McIlvaine, director of the Office of Housing, said.
The project will provide 475 affordable units, 25% of which will be priced at 40% of the area median income. The rest of the one-, two- and three-bedroom units will provide a mix of prices at 50, 60 and 80% AMI.
The first of the two buildings being constructed will house 417 affordable units as well as a 4,000 square foot commercial space that will provide room for a daycare and could also house existing neighborhood businesses if they wish to move. The first phase of construction on the first building is set to commence in the first quarter of 2024.
The 36,000 square foot second building located on Mount Vernon Avenue will include 58 for-sale affordable condominium units as well as office space for nonprofits, a daycare and flex space for the city. Construction on the second building is expected to begin in quarter two of 2024.
The $10.5 million loan helps account for a funding gap in the first phase of construction on building one, which will account for 76 of the 417 units in the building. The loan is provided through the city’s Housing Opportunities Fund and includes $1 million in previously approved predevelopment funding, as well as a $240,000 rental assistance grant. The total development cost for this phase of work is $44 million.
To help fund this first phase of development, AHDC is also applying for $21.3 million in low-income housing tax credits. According to McIlvaine, the city’s financial support will make AHDC’s tax credit application more competitive.
Moving forward, McIlvaine said there is still an $80 million funding gap for the project as a whole, although it is spread across multiple phases and multiple years. In order to fill the gap, AHDC is looking to additional non-city funding sources, including Virginia Housing’s Amazon REACH Impact grant, additional tax credits, state and national housing trust funds and American Rescue Plan Act and other federal funding sources.
According to McIlvaine, if additional non-city funding sources are not secured, the city would have to commit several years of funding to help fill the gap. If this were to happen, the timeline of other affordable housing projects in the city’s pipeline would be impacted, including the recently approved ParcView II project on Holmes Run Parkway.
City staff have included a series of “go/no-go” checkpoints in the process where they will update council on the progress of its non-city funding sources for the project and how the funding status will impact progress.
Councilor Canek Aguirre made a motion, which Councilor Kirk McPike seconded, to approve the loan to AHDC. Council approved the motion unanimously, 7-0.
“I just did want to re-emphasize the importance of this project to this area and just how we were able to actually put together a project where 100% of it is under 80% of the AMI or at 80% AMI,” Aguirre said. “It’s just so, so needed for this part of the city and hopefully we’re going to get as many of our residents as possible to take advantage of it.”