As Loudoun leaders work to bring more affordable housing into Loudoun, the Board of Supervisors will make a 30-year, $3 million loan to help finance building some, a first in the county.
Businesses and elected representatives alike have called for more affordable housing options in a county with high property values and cost of living. Salaries that in other areas would allow a person to live comfortably keep many Loudouners struggling to afford rents and mortgages or commuting from further west.
Supervisors have recently begun amending the county’s policies on affordable housing, which historically have hobbled made it difficult or impossible to leverage state or federal financing programs. Last October, supervisors unanimously approved changes to the county’s Affordable Dwelling Unit program that brought it into line with Virginia Housing Development Authority and U.S. Department Housing and Urban Development requirements, opening the county up to state and federal money.
Now, the board has opened up the Housing Trust Fund to making loans for projects under certain circumstances.
One of the requirements for receiving a trust fund loan is that the project it is financing must provide at least the minimum number of units that would be required under the county’s Affordable Dwelling Unit program. That program designates a percentage of the total units in most large developments that must be rented or sold below market value.
In the case of Glasscock Field at Stone Ridge, a planned mixed-use development that includes StoneSprings Hospital, the ADU program would require 27 units. Stone Springs proposes to build 128 rental units. The county loan is just one source of funding for an estimated $32.5 million cost of that project.
“This is actually our first opportunity to show how Loudoun County can take advantage of that change to leverage, in this case, approximately $9 for every dollar we’re loaning,” said Supervisor Tony R. Buffington Jr. (R-Blue Ridge).
The loan’s interest rate will be pegged to the 10-year U.S. treasury note yield on the day of a commitment letter from the U.S. Department of Housing and Urban Development for its share of the funding. Right now, those rates are just over 2 percent.
Construction is expected to take two years. After that, for the first 10 years, the developer will pay only interest. From years 11 to 30, the developer will pay off both principal and interest.
Rents will be restricted over the 30-year life of the loan, ranging from $1,135 per month for a one-bedroom unit to $1,525 for three bedrooms. The affordable units will be in two buildings and include a pool house.
The prices are targeted at people making 60 percent of the area median income, or about $65,000 a year. That, county staffers note, is around the pay level of many people working in education, public safety, and health care.
“Especially with the fact that the proffer law impacts whether or not we can request additional ADUs in new developments outside for a certain area in Loudoun County, we really do have to become more and more creative with how we got about pulling in affordable housing in Loudoun County,” said Chairwoman Phyllis J. Randall (D-At Large).