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Williamsburg gets creative to combat affordable housing shortage

Willow Creek Apartments, a two-story structure with a modern facade.
Willow Creek Apartments, formerly an Econo Lodge, was one of the first former hotels in Williamsburg to turn into more permanent housing. Williamsburg has adopted the practice to combat its affordable housing shortage, though other Hampton Roads localities have not followed suit. (Photos: Mechelle Hankerson/WHRO)

This story is part of a series about housing affordability in Hampton Roads produced in partnership with the Pulitzer Center on Crisis Reporting. 

Housing affordability is a challenge for all of Hampton Roads.

In Williamsburg, it’s especially hard to find enough land in the city limits to build new housing: More than half of the city's land is owned by the College of William & Mary or Colonial Williamsburg.

So, the city is getting creative — by Hampton Roads standards — to get more affordable homes.

The latest effort is happening in a land sale to a developer who wants to build 120 townhomes on 14 acres of city-owned land. A sales contract, which hasn’t been finalized, would sell the land to Cale Development for $650,000. The land is valued at more than $2 million.

That price comes with conditions, including the requirement to make 15 of the planned 120 townhomes affordable. The contract stipulates those 15 units would be sold for $100,000 less than current fair market value. Currently, that would be about $225,000, though that can change based on federal calculations.

If the developer can’t sell the units at the affordable price, it must pay the city $100,000 for each of those units. The city would recoup $1.5 million in that situation, meaning the developer would ultimately pay the assessed price for the land.

City Manager Andrew Trivette said the city may keep the new sale method in its back pocket.

“You know, I think it's all about creating units,” he said. “Whichever one of those mechanisms gets us there the fastest is what we're going to focus on.”

About one-third of Williamsburg residents spend more than 30% of their income on housing, making them what housing officials consider cost-burdened.

In a 2021 analysis, William & Mary economist Sarah Stafford found the city needed more than 700 additional affordable units to fulfill the community’s needs.

“Of course, the problem is that we don't have enough already,” she said. “And then with the increase in the population, that's going to just put a further burden on the localities to come up with some solutions to the affordable housing crisis.”

In Williamsburg, like most of Hampton Roads, wages simply haven’t kept up with the booming housing market. Stafford found for workers making minimum wage to be able to afford an average two-bedroom home, 3.5 working adults would need to live in the home.

“If you have a minimum wage job in Williamsburg, even if you're doing it and your spouse is doing it or your partner's doing it, you can't afford a two-bedroom apartment for your family,” Stafford said. “So, there's a real problem, obviously, with providing housing to the workforce that we have.”

When city leaders envisioned what Williamsburg would look like in 20 years, affordable housing was key to accomplishing the vision, Trivette said.

“Only 10% of the people who work in the city can afford to live in the city, and that's hard to have a thriving community when you don't have that kind of investment,” he said. “So, that's something that we need to change.”

Affordable housing is a challenge almost everywhere because there is often limited land and financial resources to build more according to Corianne Payton Scally, a senior fellow at the Urban Institute, which studies economic and social issues.

That means a lot of cities have to look at other options, such as allowing more than one home on a lot and deals like the one Williamsburg is considering with Cale Development.

“Giving land is another way to try and support affordable housing development by removing that cost from the development budget, which allows, of course,  those developers to pass on the savings to the eventual homeowners or renters,” Payton Scally said.

Last year, Williamsburg formed a special affordable housing workgroup to consider ways the city could realistically build the hundreds of affordable units it currently needs.

On its list were several policies researchers like Payton Scally have said are among the most successful models for creating affordable housing. Those include allowing accessory dwelling units, or granny flats, creating a community land trust and adjusting zoning codes to more easily allow multiple homes on one piece of land.

A 2021 housing workgroup in Williamsburg came up with several priorities to address the affordable housing shortage:

  • Use federal and state grant programs to help existing affordable units with maintenance and rehabilitation

  • Implement inclusionary zoning, which allows people to build more dense (and in theory, more affordable) units without seeking rezoning

  • Eliminate zoning categories that allow only single-family homes and instead allow for a minimum of a duplex on every residential parcel

Williamsburg City Councilor Caleb Rogers was part of the workgroup. He said big developments that add lots of housing would probably fit better in the counties surrounding the city because they can easily find land for them.

“As far as major developments, which would be similar to what Cale Development just proposed … that's going to be a product for the localities that just have a lot of developable land, which are our outlying counties,” he said. “Not to say Williamsburg isn't interested … but I think a little bit more what it takes to try to provide affordable housing [in Williamsburg] is creativity.”

Rogers referenced early plans to use city-owned land near Waller Mill Park for a small number of modular homes.

Since the city owns the land, there would be no cost to find the space. And pre-fabricated modular homes are notably less expensive than building from scratch.

“Those are parcels of land that the city, until now, hasn't been able to do anything on,” he said.  “Obviously, you're not going to put a major league development right there next to our main source of drinking water. And we already have a park there, [and] there's not much that could go there commercially either. But residentially, there are options.”

Trivette said there aren’t any formal plans to do that, because the city will probably have to work with a developer to make it happen. But he said the concept is sound.

“There's a lot of developable property around the reservoir that we could do so in a responsible manner, that's not going to run the risk of damaging the environmental quality of the city's drinking water by adding seven to 14 single-family houses that the city could use for workforce housing.”

In 2015, Williamsburg adopted a policy allowing defunct hotels to become rentable apartments. It’s a common practice around the world, according to the Urban Land Institute, a global nonprofit that studies land use and and real estate.

Hotel-to-apartment conversions isn’t something other Hampton Roads cities have embraced. The former Quarterpath Inn was the first hotel to make the change when it became  The Flats of Williamsburg.

In 2020, an old Econo Lodge converted to the Willow Creek Apartments. The original policy only allowed for 150 total units to convert hotel rooms into apartments, though the city went over that with the two conversions.

The City Council recently increased that cap, which was one of the recommendations from the 2021 workgroup. Council voted to allow 250 more converted apartments; the workgroup report suggested an even higher cap that would have allowed for the creation of more than 800 affordable units.

Owners of three closed hotels have already expressed interest in turning the buildings into apartments.

“Affordable housing is one of those topics that cities across the country, big and small, have wrestled with for eons,” Trivette said. “So, while I don't know that we have all of the answers or the perfect solution, we have a lot of tools in the tool kit that we're ready to deploy.”

Read the original story on WHRO's website.