Roanoke is steering millions in federal funding to nonprofit Total Action for Progress to spur development of more affordable housing.
Officials say the investment is paying off.
As the operator of Roanoke’s land bank, TAP has turned over 13 blighted properties to developers creating new and rehabilitated homes.
“There are homeowners as a result of those acquisitions,” Angela Penn, a senior vice president at TAP, told members of City Council on Monday. “I think we’re on a good path. It took us a little while to get here.”
While initially confined to Southeast Roanoke’s Belmont-Fallon neighborhood, the land bank’s revitalization efforts have expanded to more areas citywide, Penn said.
Council also this month created a $2 million affordable housing fund, overseen by a branch of TAP, that will provide low-interest loans to developers. The idea is to incentivize development of housing that isn’t a cost burden to residents.
“This fund is part of a larger strategy to address an acute housing shortage in the Roanoke Valley and beyond,” Chris Chittum, who leads the city’s planning department, said in a press release.
Roanoke is short more than 3,500 affordable housing units, according to recent studies. The federal government defines “affordable” housing as that which costs no more than 30 percent of a household’s income.
The city created its land bank in 2019, but efforts were slow going until late 2021, when the city gave TAP more than $570,000 in pandemic relief funds to acquire properties.
Penn says TAP is on track to meet its goal of acquiring 16 properties by the end of 2024, when all that grant money must be used.
With such a deadline, Council members must soon decide how to keep the land bank afloat.
Some land banks — such as the Maggie Walker Community Land Trust in Richmond — rely in part on regular funding from the city, Penn told Council.
Other options include setting aside a portion of tax revenue generated by those now-occupied homes for the land bank.
Roanoke officials have also taken to the courts.
Last week, city attorneys petitioned a Roanoke City Circuit Court judge to have a vacant property with delinquent taxes transferred to the land bank, Penn said.
City leaders hope a recent state law streamlining that process will allow the land bank to take on more dilapidated houses and vacant lots. Previously, TAP had to compete with other buyers when those properties went up for sale at public auctions.
Though much of the land bank’s work has been conveying properties to developers of single-family homes, TAP also played a role in plans to convert part of Trinity United Methodist Church into 15 affordable apartments geared toward lower-income older people.
“We have an agreement with the land bank to have a reimbursement for the acquisition of this property,” Isabel Thornton, executive director of Restoration Housing, told Council members Monday night before they unanimously agreed to rezone the property for the project. “The agreement was, I think, contingent that we would be providing affordable housing for the city of Roanoke, which is one of their main objectives.”
The city’s new affordable housing fund, meanwhile, will be run by Business Seed Capital, Inc., a community development financial institution under TAP’s umbrella.
That money would help fund projects that provide affordable housing for residents who make 60 percent or less of the area median income, or about $38,400 for a single person.
Housing units must remain affordable for 20 years, and at least 20 percent of units must be affordable to qualify for the loan, according to Chittum.
Developers would be able to take advantage of loans of closer to 2.3 percent interest, compared to a current borrowing rate of about 5.3 percent.
Curtis Thompson, TAP’s vice president of financial services, estimated that the $2 million initial investment would fund no more than four projects. He said TAP will be seeking other sources of revenue to replenish the fund.
“I think the interest will be there,” from the development community, Thompson said. “Honestly, I don’t think the money will be sitting there very long.”
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