Renting in Crozet: Market Reflects Growth, Disparity, Uncertainty

The Vue apartments under construction on Blue Ridge Avenue at Jarmans Gap. Photo: Michael Marshall.

When Crystal Murray turned 36 last month, she said goodbye to an especially tragic year in her life. Her family home in Batesville burned on July 4 in a freak conflagration caused by a falling tree. The fire destroyed everything she owned: furniture, housewares, and clothing as well as the structure. Her husband, son and mother, though traumatized, felt lucky to be alive, she said. Her employer led a community effort to collect clothes, gift cards and bedding for the displaced family, and people were generous. But there was more tragedy to come, plenty of it.

Like many people who live paycheck to paycheck, Murray’s family had pieced together a living just enough for each month’s bills. There was her income (she’s a cook at Restoration Crozet), money from her son’s part-time jobs, and what her mother collected each month in social security. Her husband has major health issues that prevent him from working. Following the fire, her mother’s health declined and she’s now in assisted living. Murray discovered there was no insurance, there were unpaid back taxes, and her mother’s reluctance to sell the land left the family with no reserves as well as no place to live. The family car had serious problems. “It was one blow after another,” Murray said. 

She searched for a place in Crozet she could afford, hoping to avoid a long commute in an overheating car. What she found shocked her: “I can afford about $600,” she said. “I think $800 would be a stretch, but I could possibly do it.” Nothing she found came even close. In 2017 (the last year for which data is available), the median gross rent in the County’s White Hall District was $1,238 per month. A late September look at online sites advertising rentals showed rentals ranging from $1,300 to $4,500 per month. And “Area Vibes,” an online service that extrapolates data from the census and other available sources, gave Crozet an “F” for affordability, based on the then-average apartment rental price of $1,234, 30% more than the national average of $949. Home prices (which affect the rental market in a variety of ways) fared even worse: a whopping 80% more than the national average. 

The Summit at Old Trail offers luxury apartments and is scheduled to begin renting this winter. Photo: Michael Marshall.

Stephen Tavares owns a couple of places in Old Trail that he was preparing to rent out. He heard of Murray’s difficulties and offered her a townhouse on Ashlar as a temporary solution, reducing the rent to an amount she could afford. “This has been great,” she said, “but I can’t expect him to continue doing this forever.”

Murray is not alone. About 20% of White Hall District residents and more than a third of County residents rent homes. According to the Albemarle County website, one way to measure housing affordability is to look at the local housing wage, or the hourly wage a full-time worker must earn to afford to rent a modest, 2-bedroom apartment. In Albemarle County, more than half of all workers earn less than that. Throughout the County, the poorest families pay more than half their income on rent.

The growing disparity between the highest and the lowest income levels means an unrealistic picture of what is “affordable,” said White Hall Supervisor Ann Mallek. A recently released survey shows that while more than a third of County residents make more than $100,000, nearly a third make less than $50,000. And those statistics don’t tell the whole story. While rentals pass the “affordability” test imposed on a certain percentage of new construction with rentals of around $1,200 per month, 21% of residents in the White Hall District (23% County-wide) make less than $35,000. Using the “one third of monthly income” calculation, an appropriate rent of one-third or less for a substantial part of the population is roughly between $600 and $900 per month.

Chart courtesy Albemarle County

“The high cost of living in the Crozet area means a higher rate of poverty here,” Mallek said. “You see extremes everywhere, in town and right outside it in the rural areas.” To add to the problem: “Landlords who used to have affordable rentals are likely to sell to someone who’ll fix up and flip a modest home or ‘cutesify’ it and rent it out as an Air B&B.”

Mallek noted that there are a number of truly affordable rentals that never make it onto the internet. Modest small homes around Crozet Park built to accommodate workers at the former Barnes lumber yard, a few properties on St. George, some rural outbuildings and cottages, and some small homes in Orchard Acres pass from renter to renter without being widely advertised. 

Mallek said she’s aware that some of these properties have fallen into disrepair. “There are still some places in rural Albemarle that don’t have indoor plumbing,” she acknowledged. But landlords there have their own struggles: In many of those little old homes are elderly rural people, who can’t afford even the slightest rise in their rent, she said. “So, landlords in the path of development are in a bind, too, hoping that they and their tenants can hang on.”

Affordable Rentals to be included in County’s Housing Policy

Albemarle County is well aware of an affordable housing problem and has moved forward in several ways. Supervisors have received the Planning District Commission’s study by Partners for Economic Solutions, a firm that also recently examined Charlottesville’s affordable housing issues and provided the statistics about renters (see chart below). The County has hired Stacy Pethia, a housing expert with years of experience in the affordable housing field.  The County has heard from IMPACT (Interfaith Movement Promoting Action by Congregations Together), an interfaith group that’s chosen affordable housing as a priority; and it’s beginning a series of public discussions on housing policy this month.  Pethia is leading efforts to update the County’s affordable housing policy. She’s spent 18 years in the affordable housing field, working on projects addressing regional housing policy in the Washington, D.C. metro region, and she co-chaired a committee on ending veteran homelessness in Pittsburgh. Most recently she coordinated housing programs in Charlottesville for two years, and has managed the city’s affordable housing fund.

Presently, Pethia said, the County has a few tools to encourage affordability for the people least able to become homeowners. In Crozet, in particular, she said the Old Trail developer proffered 15% of the total units developed as affordable housing, which includes The Summit at Old Trail and the mixed-use sites, both old and new, in the Village Center. The County requires that percentage each time they grant a rezoning. The proffer includes both new homes and apartments in Old Trail. In terms of enforcement, she said, the developer notifies her when new affordable rental units become available and she gives the information to the County’s housing office, which makes the information available to the individuals and families they work with. The owner or the agent fills out annual reports showing monthly rental amounts for each unit and, as units rent to new tenants, must verify that those units were re-rented to income qualifying households. Affordability requirements apply to rental units for 10 years.

The Vue, which is now taking rental applications, is a by-right development project (a project that complies with existing zoning). But since The Vue received financing through VHDA’s Workforce 20/80 program, it’s required to make 20% of the total units affordable to households with incomes at 80% of area median income. 

Affordable or Luxury?

Laurie Shannon, a Realtor with REMAX, said she often gets involved with people searching for rentals, a process that’s not very lucrative, but one she sees as a part of her job. She’s presently working with a rental client and reported back that The Vue, with one- and two-bedroom apartments, offers the pre-release price of up to $1,625 (presumably for the units not set aside as affordable). A two-bedroom at Piedmont Place went for $1,950. Over at Old Trail, the Summit has not advertised prices as yet, but when they begin leasing in February, Shannon said they’re expected to be comparable to the developer’s other Virginia properties, in the $1,550 to $1,700 range (again, for the 85% not set aside for affordability). 

Even with the required reductions to a percentage of the new apartments, which are based on what the population making 80 percent of the adjusted median income can afford, many renters make far less than that, not only the very poor, but the mainstream workforce, especially in single-parent or fixed-income households. “Maybe a teacher married to a firefighter could afford one,” Mallek said. 

Shannon said there are a number of reasons why “luxury” apartments are still in demand in Crozet, despite their high price. “This is not an ordinary place,” she said. More than 90% of the working population does not work in Crozet, she added, and they’re here for a limited time, making home ownership a poor choice. 

Much is driven by the quality of the schools, Shannon said. She noted that U.Va. hires visiting professors for a year or two, the JAG school trains military leadership, and army officers come through the National Ground Intelligence Agency. There’s also a rotating field of artists, writers, and other grant recipients in residence. “These are smart people,” she said, “and they care about their children’s education, if even for a few years.” She noted the huge rush to find rental homes in June, so children can be registered in schools and medical interns (50 or 60 a year) can begin their stint at U.Va. Hospital. While academic, military and medical salaries are not princely in comparison with upper-level corporate or entrepreneurial earnings, they’re usually within the range that can afford existing rentals. (Generally, U.Va. residents make about $50,000 a year, according to the U.Va. School of Medicine, and officers with dependents in Virginia have a housing allowance of between $1,500 and $3,000 per month, according to the U.S. Army.)

Shannon said her market research showed that, of 38 units available at the start of the year, 23 have been leased with an average rental price of $1,823 (generally 2 to 3 bedrooms), with an average of 38 days on the market; 8 listings have expired; and 7 are currently available, with an average of 55 days on the market. 

Family transitions are another factor, Shannon said. “Unfortunately, I’ve seen a number of new renters from families changed by divorce, the death of a spouse, and the relocation of a frail elderly parent to be nearer to younger family members.”

The flooding of the market with high-end rentals is a nationwide phenomenon. According to Harvard’s Joint Center for Housing Studies, the last decade has seen more than nine million Americans become new renters, the largest 10-year gain in history, pushing the percentage of households that rent to nearly 40 percent, the highest level since the 1960s. This is happening at the same time the country is losing well more than 100,000 affordable rentals each year.

Tom Noelke. Photo: Theresa Curry.

Locally, the same trends have pushed potential homeowners into the rental market. The foreclosure crisis began the trend, said Tom Noelke, a local realtor with Roy Wheeler. In some places, the influx of millennials, combined with rising property values, affected the market. Renters seeking affordable rents were not helped by the construction trends of the last decade. A 2017 study, again by Harvard, said the market has overwhelmingly responded to apartment demand with a sharp increase in high-end units. Noelke added that, in Crozet, the demand for houses for years exceeded the supply, so developers bought up foreclosed homes to offer as temporary rentals to future buyers waiting for construction to be completed.

Shannon is confident that the same trends that drove the construction of luxury rentals will continue. Noelke doesn’t think so: “I’ve been in the rental market in Old Trail since it started,” he said. He has three townhouses he rents out, and said he’s had no trouble at all keeping them rented as soon as tenants turn over. This year is different, he said, and he’s finding it so hard to lease them that he’s selling them. 

Noelke speculates that people are waiting for the 400-plus apartments coming on the market, that even at full price will be less expensive than a townhouse. “And they’ll be new and have amenities,” he said. He doesn’t think that any rentals, regardless of cost, in Crozet will be attractive to the millennials driving rentals in more urban markets: “They want to be close to Uber, to their clubs and coffee shops,” he said. “Crozet will always be a family place.”

Tavares—the property owner who rented a furnished home to Crystal Murray, the mother who was displaced by fire—said he’d looked for ways to reduce rentals at his properties so he could offer them to lower-income renters. “There’s no way to do it that doesn’t lose money,” he said. Pethia confirmed that there is presently no financial incentive for private owners to lower their rents.

Where do we go from here?

The study by Partners for Economic Solutions made a number of suggestions for the future. Generally, Pethia said, the County will be guided by the recommendations from them as well as community input. 

The Partners study included affordability issues for both renters and homeowners, and proposed the following solutions, in order of priority:

  • To increase the number of multifamily rental units serving households with incomes between 30% and 60% of average median income, particularly Low-Income Housing Tax Credit (and other state/federally funding programs) developments;
  • To increase the number of affordable rental units for senior (55+) households;
  • To increase the number of fully accessible rental units;
  • To support the construction of permanent supportive housing units;
  • To increase housing options for workforce housing (households with incomes between 60% – 100% AMI);
  • To research feasibility of providing housing for County teachers and school staff;
  • To preserve both expiring use properties (rental properties at the end of their required affordability periods) and market rate affordable rental properties;
  • To continue offering real estate tax relief to income-qualifying senior homeowners;
  • To examine the feasibility of expanding program to include non-senior homeowners;
  • To continue to support homeowner rehabilitation efforts.

Making an Impact

Among those calling for action on housing in the county is IMPACT, a coalition of 27 congregations from different religious, racial, political and economic backgrounds concentrating on unity and direct action to achieve social justice. Affordable housing is an area of concern for the group, and recently they worked with the city of Charlottesville to set aside $1.5 million committed to the Charlottesville Affordable Housing Fund, and to shorten the approval process for projects including affordable housing to 6 weeks by next year. 

In Albemarle County, IMPACT has asked for the County to make building accessible units for seniors who make less than $35,000 a year a priority; and for County surplus funds to be used for a permanent affordable housing fund, with earmarked annual sources of funding.

The Vue apartments under construction on Blue Ridge Avenue at Jarmans Gap. Photo: Michael Marshall.

Housing trust funds are established by government bodies, including those at the county level, when particular sources of revenue are dedicated to the specific goal of affordable housing. Usually, funds are transferred automatically every year into the fund, providing a continuous stream of funding, eliminating the yearly appropriation process. It’s a flexible solution: different states use different dedicated sources of funding and different models, so they may be directed at fixing decaying rental units, for example, in one state; and offering incentives to builders in another; or using them differently year to year to address whatever needs arise.

Pethia noted that Thomas Jefferson Community Land Trust works to keep homes affordable by keeping the cost of land and improvements separate. In some areas, she said, land trusts are large enough to affect the cost of large rental developments, but locally the land trust is not yet that large. 

Any discussion of the high cost of rentals brings the question of making home ownership available for all. This makes sense for a certain group of people but is a slippery slope for those truly vulnerable, Mallek said, and was a factor in the 2008 recession. “It’s a misery for people underwater to be in a mortgage too big for their situation, or who lose their jobs due to illness or accident and get behind. We need to acknowledge the need for well-priced rentals and stop promoting home ownership as the only way to live the American Dream.”

Hearing from the Public

Two more affordable housing public hearings are scheduled for October 8 and 22, from 6 to 8 p.m. at the Albemarle County Office Building at 401 McIntire Road in Room 235.

The full report on affordable housing in Albemarle County by Partners for Economic Solution is available here. 

The Summit at Old Trail offers luxury apartments and is scheduled to begin renting this winter. Photo: Michael Marshall.


Please enter your comment!
Please enter your name here