A new method of construction is bringing more affordable housing to Fishersville, Va.

 

It’s no secret that we are living longer. Today, there are more than 46 million adults age 65 and older living in the United States. That number is projected to double by the year 2050.

While living longer is a good thing, it also has some challenges. In the housing world, an older population living on fixed incomes means a need for more housing – and not just any housing – but the kind that is affordable, accessible and safe.

How do we tackle that? We get creative and encourage others in our industry to do the same.

 

Fishersville

In the small town of Fishersville, nearly 27% of the adult population is over the age of 65. Compared to other towns throughout the state, that’s relatively high. In fact, in Virginia, seniors only make up about 16% of the population, according to the United States Census Bureau.

Long-time real estate developers William and Richard Park of Charlottesville-based Pinnacle Construction and Development Corp. recognized the need for senior housing in Fishersville but were struggling with how best to build an attractive, affordable apartment complex while keeping costs down and shortening construction time.

“I thought, ‘what is something we could do that is different than how we typically do garden style apartments in this area,’” said William Park.

The answer? Modular construction.

Modular construction is a process in which a building is constructed off-site in a manufacturing facility and then delivered to the job site where the prefabricated pieces are assembled. The process is considered eco-friendly, cost-effective and usually takes a lot less time.

Intrigued by the process, the Parks put together a proposal for a development called Gateway Senior Apartments – an affordable 80-unit, one- and two-bedroom apartment complex for adults age 55 and older. All of the units would be income-restricted with rent at or below 60% of the area’s median income.

Another bonus is the development’s location. The senior apartments will be less than a mile from the Augusta Health Regional Hospital and just across the street from an assisted living community and medical offices.

 

Putting the Pieces Together

The creative idea behind Gateway Apartments led the Parks to apply for funding through Virginia Housing’s new Innovative Demonstrations Program. The program seeks to spur more affordable housing by supporting technological innovation in the housing industry. To qualify, projects should use generally available technologies and techniques that vary significantly from approaches usually taken in housing construction and they must be below the median cost of new single-family housing in the region of the proposed site.

A panel of housing experts reviewed the Parks’ proposal and awarded them 9% federal Housing Credits, equal to $ 14 million. From there, the Parks applied for financing through Virginia Housing and received $6.4 million.

“This is the first time we’ve financed a modular apartment complex,” said Kristina Armistead, Development Officer with Virginia Housing. “That’s what makes this project so unique.”

Armistead worked closely with the Parks on the financing side. She said the development not only meets a great need in Fishersville, but as the first modular constructed building in the area, it could open the door for future similar developments.

The Parks are also working with The Richman Group, which is funding the Housing Credit equity, and Merchant’s Bank, which is providing the developers a bridge loan during construction.

 

Breaking Ground

In their 35 years of experience, this will be the Parks’ first time using modular construction, and they are looking forward to starting work.

When the prefabricated buildings arrive, they will be 75% complete. Pinnacle will tie in all the mechanical systems like HVAC, plumbing, sprinkler and electrical, while performing the exterior work such as brick, vinyl and the roof.

“There is a lot of coordination between our architect and the modular builder’s design team,” said William Park.

A project like this typically takes between 18 and 22 months, but modular construction should shorten that time frame by six to seven months.

The Parks plan to break ground by December 2020, and the project is scheduled to be completed by the end of 2021.

Addressing the Homeownership Gap

When it comes to homeownership, African Americans and other historically underserved communities continue to fall behind other households, by nearly a 21% margin.

Why does the gap exist?

 

Decades of discriminatory housing practices beginning in the 1930s made it nearly impossible for African Americans to purchase a home. It wasn’t until the Fair Housing Act of 1968 was passed – which made housing discrimination illegal – that things began to change. Though progress has been made over the years, there’s still much to do. Ultimately, closing the homeownership gap will require a collective action by government stakeholders, industry, the private sector, nonprofits and academia.

Addressing the barriers to minority homeownership is a key priority for Virginia Housing.

To help remove these barriers, we’ve dedicated $1 million toward housing education and counseling, and partnered with organizations like Prince William County’s NAACP chapter, where we presented a four-part online series for first-time homeowners. The series included information about our first-time homebuyer programs, how to work with a Realtor, how to work with a lender and the benefits of working with a housing counselor. Because of the program’s success, we expanded the effort to NAACP chapters across the state.

“This was a great opportunity to share our free consumer resources with such a historical group as the NAACP, which for decades has focused on political issues, education, social awareness and equality for people of color,” said LaDonna Cruse, Virginia Housing’s Education Manager.

We’ve also created a Minority Business Advisory Council to promote the participation of minority-owned businesses and partnered with the National Association of Minority Mortgage Bankers of America and the National Association of Real Estate Brokers to help find ways to break down barriers to homeownership. In addition, we launched a homeownership marketing campaign designed to reach a broader multicultural audience.

Other housing organizations across the country are also making big steps toward closing the gap. Enterprise, a national nonprofit focused on affordable housing, created a $3.5 billion initiative that establishes an equitable path forward for Black, Indigenous and People of Color (“BIPOC”) and other historically marginalized housing providers. Netflix Inc. is a big contributor, committing $25 million to the cause.

 

Similarly, LISC – another nonprofit that connects communities with public and private resources – created Project 10X, a $1 billion initiative aimed at closing the racial health, wealth and opportunity gaps.

 

“Despite the challenges that have been thrown our way due to COVID-19, we will continue our efforts to increase homeownership education among African Americans and other underserved groups,” said Cruse. “Our newest initiative, ‘Chatting It Up Live: Homebuying with Virginia Housing,’ is a series of virtual sessions that address frequently asked questions about the homebuying process. This effort demonstrates that the dream of homeownership is still very much alive and attainable for people of color — even during this pandemic.”

Anyone looking for an affordable home in Virginia can visit VirginiaHousing.com to take advantage of programs designed to help make homeownership a reality.