Jen Surber was 22 years old and fresh out of college when she went to work for a nonprofit, People Inc., that was looking to develop affordable housing in southwest Virginia but had zero institutional experience with the process of applying for low-income housing tax credits.
The first project she worked on, a 32-unit new construction development located in Abingdon, opened the following year. She worked for People Inc. for 10 years, benefited from the experience and knowledge gained there, then formed her own development company and set out to demolish the pervasive social stigma that surrounds affordable housing.
“When you say ‘affordable,’ everybody thinks they’re crumbling properties where the parking lots are full in the middle of the day because nobody has anything to do. But there are people who work hard every day and still don’t make enough money to afford rent,” Surber said.
“Our teachers are having a hard time with the cost of housing. Our police officers and firefighters. Public servants. Not to mention the person who served you coffee this morning at Wawa or gave you a cheeseburger when you pulled through the drive-thru last week,” she added. “If you go to work every day, you ought to be able to afford a place to live.”
America’s current housing affordability crisis isn’t limited to high-cost cities like San Francisco, New York and Boston.
In 2009, the sale price of an average single-family home in Chesterfield was $215,000. As of July 2023, according to the most recently available data from the Central Virginia Multiple Listing Service, it had more than doubled to $441,847.
Fueled by the rising cost of land, labor and construction materials, prices for townhomes and condominiums and market-rate apartment rents have followed suit. As housing costs have risen faster than household incomes over the last several years, it has created a significant shortage of residential units across the Richmond region that are affordable to people with even moderate incomes.
In response, the local government has embraced a multifaceted approach to increase the diversity of Chesterfield’s housing stock and partnered with local nonprofits -- including Better Housing Coalition, Project:HOMES and the Maggie Walker Community Land Trust – to expand opportunities for low- and moderate-income workers to find safe, stable residences in the county.
Several county officials – including Board of Supervisors Chair Kevin P. Carroll, Dale District Supervisor Jim Holland and Midlothian District Supervisor Dr. Mark S. Miller – toured Surber Development’s second affordable housing project in Chesterfield, a new 80-unit apartment property for those age 55-and-over named Watermark Gardens, on Wednesday morning.
“Quality affordable housing is essential to maintaining a vibrant community where everyone has an opportunity to thrive,” Holland said. “It is especially a priority for our aging community. I know a lot of seniors who are looking for a place to live – they want to move out of their homes, but they want to stay close to where they are. These 80 units will directly address that concern while providing a safe, stable place to call home and allowing our seniors to age in place in a community they know and love.”
All 80 apartments at Watermark Gardens are reserved for people who make no more than 60% of Area Median Income (AMI). For a 1-person household, that is $44,820 annually. For two people, it’s $51,180.
Monthly rent ranges from $617 for a one-bedroom unit to $1,337 for two bedrooms. That’s significantly below current market rates in Chesterfield.
“It’s great housing, just better priced,” said Dan Cohen, director of the county’s Department of Community Enhancement.
The key to making the math work on an affordable housing project is the availability of low-income housing tax credits. Here’s how it works: the federal government annually allocates to each state’s housing authority a certain amount of tax credit funding, then for-profit and nonprofit developers submit applications seeking a portion of those dollars for their projects.
If approved, the developer takes a specified percentage of the project’s construction costs as a federal tax credit annually for 15 years. Those credits are then sold to entities facing high tax liability, a process known as syndication.
About 70% of the financing for Watermark Gardens came from the sale of low-income housing tax credits through Virginia Housing. Additional funds for the project came from the Virginia Department of Housing and Community Development, Virginia Housing Trust Fund, National Housing Trust Fund and Housing Innovations in Energy Efficiency (HIEE).
“The entire funding package is what it takes to make rents affordable,” Surber said.
According to Nicholas Feucht, real estate development and housing coordinator for Chesterfield’s Department of Community Enhancement, getting approved for low-income housing tax credits is “a very competitive process” that requires applicants to meet criteria set by the state’s housing authority.
In Virginia, that has led to high-quality, more energy-efficient affordable housing construction that stands the test of time and saves tenants even more money on their monthly utility bills.
When inflation in material and labor costs left Surber with a funding gap for Watermark Gardens, Chesterfield filled it by contributing $400,000 from a pool of $4 million in federal American Rescue Plan Act (ARPA) that had been allocated for local affordable housing projects by the Board of Supervisors.
“I knew we were going to get units on the ground and I wanted something sooner rather than later,” Cohen said. “We’re leveraging our money 20-fold on this project.”
Surber takes pride that Watermark Gardens is affordable while having the high curb appeal of the adjacent market-rate apartment complex, which is part of the larger Watermark residential development that also includes single-family homes and townhomes.
Likewise, her first affordable housing property in Chesterfield, the two-story, 80-unit Iron Bridge Apartments about five miles south on Route 10, is reserved for people making no more than 60% of AMI.
“There is nothing about these projects that screams anything but market rate,” Surber said. “You’d never know the difference. That’s the whole point.”