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PHA urges council to favor smaller, deeper-affordability plan for Kindlewood Phase 4; warns larger option needs extra funds
Summary
Piedmont Housing Alliance presented two financing paths for Kindlewood Phase 4 — a more achievable ~90-unit plan and a riskier ~130-unit plan that would likely need an extra $5 million and rare LIHTC awards; councilors generally signaled support for the smaller, deeper-affordability option and directed staff to proceed with design under that approach.
Piedmont Housing Alliance on Feb. 2 asked the Charlottesville City Council to choose between two financing approaches for Kindlewood Phase 4 and explained why recent federal, market and financing changes make the choice urgent.
"I fundamentally think that the best chance of success is version A," said Sunshine Nathan, executive director of Piedmont Housing Alliance, presenting a pair of scenarios. Version A would aim for roughly 90 units and—based on PHA’s conservative projections—would rely on $4.5 million already committed in the city’s capital-improvement plan and on competitive but attainable low-income housing tax-credit (LIHTC) strategies. Version B would target about 130 units but, Nathan said, would require more aggressive 9% LIHTC awards or an additional roughly $5,000,000 in city resources and carries a low probability of success given recent declines in LIHTC value and the loss of Qualified Census Tract (QCT) status that had previously helped financing.
Why it matters: Nathan said the project has been under development for years and that pandemic delays, rising construction costs and higher interest rates have reduced the financing options she had once expected. PHA has completed phases 1–3 of the redevelopment and plans to rehouse residents ahead of Phase 4, but the financing mix changes the feasible size and depth of affordability for the final phase.
Nathan outlined the tradeoffs: Version A prioritizes deeper affordability within a smaller unit count and, in PHA’s projection, does not require additional city funding beyond $4.5 million already in the CIP. Version B would expand unit count but would likely increase the city subsidy need by about $5 million and, even then, depends on securing unusually favorable LIHTC awards.
Council discussion emphasized affordability depth over unit quantity. Multiple council members voiced support for Version A as realistic under current market conditions. Council members also pressed Nathan on mechanics: how LIHTC awards are allocated, the per-unit cost to deepen affordability (PHA estimated roughly $100,000–$120,000 per unit to buy down a 60% AMI unit to 30% AMI), and the timing constraints tied to LIHTC application cycles. Nathan said design work with residents must start immediately if PHA is to meet timelines for a March 2027 LIHTC application cycle.
The council did not take a binding vote at the Feb. 2 meeting but provided the requested direction to proceed toward Version A and signaled that staff will return with any formal amendments to the city–PHA master agreement required to change unit targets. The meeting moved into a closed session later in the evening for unrelated legal and safety matters.
