Building or Investing Opportunity
Marcus O'Malley -- March 18th, 2008
It seems to me that there is a large enough demand for low or mixed income housing in Harrisonburg to warrant investigation by builders and investors during this slower housing period. Unfortunately the demand for low income may grow in the next few years and housing could continue to skid and it will become increasingly important to provide housing for our community.
According to Brooke Rogers, the director of HARTS, there are numerous benefits to developing low income housing that may builders are unaware of. HARTS is a roaming shelter during extreme weather conditions for those that cannot find room or are not able to stay at any of the available local shelters. She believes that there is a need for mixed income housing and a great opportunity for builders and investors to fill this need and gain benefits aside from the service. The Virginia Housing Development Authority has a lot of information regarding the requirements and incentives for builders and private investors to receive tax credit or other benefits.
Brooke says the builder would have to be working with 501 c 3 organization (one that has experience in the use of the tax credits). Frequently these credits are used in a mixed income, mixed use development. She noted that HOPE builders and the Harrisonburg Redevelopment Housing Authority could serve as the 501 c 3 for an interested builder.
Marcus — Thanks for calling attention to the need for low or moderate income housing in our area. My understanding is that the biggest challenge to building such housing is the cost of land and infrastructure (roads, water/sewer). Certainly, with denser housing (smaller lots or townhouses or condos), the land and infrastructure costs can be spread out over more housing units, but the costs are still there and increase every year.
If a builder or builders were interested in such an opportunity, did Brooke have any suggestions on land that could be used for the project?
Don’t worry as you can see in the video linked below “the market” will take care of the lower income citizens.
http://www.youtube.com/watch?v=CnnOOo6tRs8
Scott -
She did not suggest land, but I can try to find that out.
She suggested that a portion of a building be designated for low income to receive the benefits (e.g. the nice facility going downtown on Mason/East Market or something like it could have a floor designated to low-income to receive benefits).
I think the idea that opportunity for grants, tax credits and other perks could off-set some of the lost profits, but I’m not familiar with the numbers. Also thought in a time when all building is slowing down it might be an option worth looking into for builders.