Play Live Radio
Next Up:
Available On Air Stations

Redeveloped Virginia Beach hotel could be affordable housing model

Housing being constructed by large vehicles behind a fence
Mechelle Hankerson
While residential development is happening in Virginia Beach, like these market-rate apartments near Mount Trashmore, it's been hard for the city to find ways to create more affordable housing.

Read the original story on WHRO's website.

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

When the historic Cavalier Hotel went up for sale a decade ago, Virginia Beach city leaders wanted to find a way to save it without making the purchase themselves.

So, they promised a multimillion-dollar financial incentive package for any developer who would buy the hotel, commit to redeveloping it and get it added to the National Register of Historic Places.

By and large, council members said last week the city’s investment package, which hasn’t been re-created since the Cavalier project started, was a smart decision.

“Because this was such a success, I’m thinking an incentive package might be the way we want to address these other difficult things we have out there, like workforce housing, affordable housing,” Councilmember Barbara Henley said.

Bruce Thompson is CEO of Gold Key PHR, the development firm that oversaw the Cavalier project. He told City Council this week the $440 million redevelopment is almost done and the terms of that incentive package have all been fulfilled.

That means the city has made back its $18 million investment — which was in the form of grants, tax breaks and infrastructure improvements — plus $9 million more.

Paying for affordable housing

Cities often use cash and tax breaks as incentives for affordable housing development, said Corianne Payton Scally with the Urban Institute, which studies housing policy and issues.

But even large cities like Virginia Beach struggle to find money for enough affordable homes.

“This can be challenging when there are a lot of community needs and public infrastructure that's vying for what comes down to often very limited city resources,” Scally said.

Historically, Virginia Beach has been awarded federal funding for some affordable housing developments, but it hasn’t pursued independent development or financing of such projects.

About one-third of residents in Virginia Beach are housing cost burdened, meaning they spend more than 30% of their income on housing.

In 2016, Virginia Tech researchers found Virginia Beach would need to create more than 20,000 affordable homes to ensure no residents are cost burdened.

Related Stories