1 AN ORDINANCE TO AMEND CHAPTER 16 OF THE CITY
2 CODE BY ADDING A NEW ARTICLE VIII THERETO,
3 CONSISTING OF SECTIONS 16-42 THROUGH 16-58,
4 ESTABLISHING ELIGIBILITY REQUIREMENTS, PRICING
5 STANDARDS AND PROGRAM PROCEDURES
6 PERTAINING TO WORKFORCE HOUSING,
7 ESTABLISHING THE WORKFORCE HOUSING ADVISORY
8 BOARD AND PRESCRIBING THE MEMBERSHIP AND
9 DUTIES OF THE BOARD
11 Sections Added: City Code Sections 16-42 through 16-58
13 BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF VIRGINIA
14 BEACH, VIRGINIA:
16 That Chapter 16 (Housing and Building Maintenance) of the City Code is hereby
17 amended and reordained by the addition of a new Article VIII, consisting of Sections
18 16- 42 through 16-58, to read as follows:
20 ARTICLE VIII. WORKFORCE HOUSING.
22 Part 1. General Provisions
24 Sec. 16-42. Applicability.
26 The provisions of this Article shall apply only to the sale or rental of workforce
27 housing approved by the City Council pursuant to the provisions of Article 21 of the City
28 Zoning Ordinance.
31 The section limits the application of this Article to workforce housing specifically approved
32 as such by the City Council pursuant to Article 21 of the City Zoning Ordinance.
35 Sec. 16-43. Purpose and intent.
37 (a) The purpose of this Article is to provide eligibility requirements, pricing
38 standards and program procedures concerning initial sales, subsequent transfers and
39 rentals of workforce housing units developed pursuant to the provisions of Article 21 of
40 the City Zoning Ordinance as part of the City’s Workforce Housing Program. It is the
41 intention of the City Council to establish such standards and procedures as a means of
42 achieving the City’s vision for housing and neighborhoods, as stated in the “Housing
43 and Neighborhoods” section of the Comprehensive Plan.
45 (b) The creation of developments containing workforce housing as an
46 integrated component thereof will advance the City’s goal of providing diverse, high-
47 quality and affordable housing in desirable neighborhoods. Allowing a greater mix of
48 incomes within neighborhoods increases the affordability of housing and reduces the
49 isolation of income groups. Further, mixed-income developments are beneficial in the
50 long run because they broaden housing opportunities, increase residents' access to
51 nearby employment and provide a better land use arrangement to accommodate
52 alternative, cost-effective transportation systems.
56 Subsection (a) states the purpose and intent of the ordinance. Subsection (b) essentially
57 restates some of the findings set forth in Article 21 of the City Zoning Ordinance concerning the
58 benefits of mixed-income developments contemplated by Article 21 and this ordinance.
61 Sec. 16-44. Definitions; explanatory material.
63 As used in this Article, the following terms shall have the meanings set forth in
64 this Section. Where explanatory material is provided, such terms shall be construed in
65 a manner consistent with such material:
67 Affordable. Housing is generally considered affordable by a household if no
68 more than approximately thirty per cent (30%) of its annual gross income is spent on
69 direct housing costs. With respect to home ownership, such costs include mortgage
70 principal, interest, taxes and insurance, but not homeowners’ association dues,
71 condominium fees, utilities or other related housing costs. With respect to rentals, such
72 costs include only rent payments and do not include utilities or other related housing
75 Annual gross income. Income from whatever source derived and before taxes
76 and withholdings. Included in the calculation of gross income are base salary, overtime,
77 part-time employment, bonuses, dividends, interest, royalties, pensions, military housing
78 allowance, Veterans Administration compensation, alimony, child support, public
79 assistance, sick pay, social security benefits, unemployment compensation, income
80 from trusts, and other income from business activities or investments.
82 Appreciation. The Workforce Housing Program uses a shared appreciation
83 model to recapture the workforce housing discount, plus a fixed percentage of a unit's
84 appreciation in value.
86 Gross Appreciation. The difference between the initial undiscounted sales
87 price of a workforce housing unit and the undiscounted sales price of the
88 unit upon resale.
90 Net Appreciation. The difference between the original undiscounted sales
91 price of a workforce housing unit and its undiscounted resale price, less
92 the total amount of: (I) the original principal amount of the first mortgage
93 loan on the unit, (ii) the principal amount of the soft second deed of trust
94 note on the unit, (iii) closing costs actually paid by the Eligible Buyer in
95 connection with the purchase of the unit, (iv) the Eligible Buyer’s down
96 payment, and (v) the appraised value of any capital improvements
97 approved by the Director of Housing and Neighborhood Preservation.
99 Shared Net Appreciation. The amount of the net appreciation owed to the
100 City by the purchaser of a workforce housing unit, which shall be equal to
101 the share represented by the City’s investment in the original purchase of
102 the unit in the form of the soft second deed of trust note. For example, if
103 the amount of the soft second deed of trust note equals twenty-five per
104 cent (25%) of the original undiscounted purchase price of the unit, the
105 amount of shared net appreciation owed to the City will be twenty-five per
106 cent (25%) of the net appreciation of the unit. The amount of the shared
107 net appreciation and principal amount of the soft second deed of trust note
108 is repaid to the City upon resale of the unit.
110 Area Median Income (AMI). The Area Median Income for the Virginia Beach-
111 Norfolk-Newport News, Virginia Metropolitan Statistical Area (MSA) published annually
112 by the U.S. Department of Housing and Urban Development (HUD) and adjusted for
113 household size. Pricing of workforce housing units and end-user qualifications are
114 partially based on this published data. The initial sales price of workforce housing units
115 is based on the ratio of housing payments relative to the AMI. Additionally, the end
116 user’s income qualifications are based on the AMI, adjusted for household size.
118 City. The City of Virginia Beach or such other entity as the City Council may
119 designate as its agent in discharging the duties and performing the acts prescribed or
120 contemplated by this Article,
122 Developer. The developer of workforce housing or other person or entity, such
123 as a homebuilder, who purchases a workforce housing unit for purposes of resale to an
124 eligible buyer.
126 Director. The Director of the Department of Housing and Neighborhood
127 Preservation or his designee.
129 Eligible Buyer. A household whose workforce housing application has been
130 approved and who meets all the requirements of the Workforce Housing Program for
131 home ownership. Such requirements include, among other things, the household’s
132 gross annual income and financial assets. In order to qualify to purchase a workforce
133 housing unit, a household’s annual gross income must generally be between eighty per
134 cent (80%) and one hundred twenty per cent (120%) of AMI.
136 Eligible Renter. A household whose workforce housing application has been
137 approved and who meets all the requirements of the Workforce Housing Program for
138 rental housing. Such requirements include, among other things, the household’s gross
139 annual income and financial assets. In order to qualify to rent a workforce housing unit,
140 a household’s annual gross income must generally be between sixty per cent (60%) and
141 ninety per cent (90%) of Area Median Income.
143 Household. One or more persons living in, or intending to live in, the same
144 dwelling unit.
146 Initial sale. The original sale of a workforce housing unit to an eligible buyer.
147 The term does not include sales to persons such as homebuilders where such sales are
148 for the purpose of resale to eligible buyers.
150 Workforce Housing Program Revolving Fund. A fund administered by the
151 Department of Housing and Neighborhood Preservation for the recapture of workforce
152 housing discounts, fees and shared net appreciation from the sale of workforce housing
153 units. Funds are reinvested in the Workforce Housing Program for the purpose of
154 preserving or creating affordable housing.
156 Soft Second Deed of Trust. A second deed of trust securing the repayment of
157 the loan made by the City to an eligible buyer in the amount of the workforce housing
158 discount, plus the shared net appreciation of the unit. The loan secured by a soft
159 second deed of trust carries a zero percent interest rate, requires no monthly payments,
160 is subordinate only to the purchase money first deed of trust, and is due and payable
161 from the proceeds of the resale or transfer of the workforce housing unit.
163 Workforce Housing or Workforce Housing Unit. Dwellings or dwelling units,
164 whether single-family dwellings, duplexes, semi-detached dwellings, townhouses or
165 multiple-family dwelling units, approved by the City Council pursuant to Article 21 of the
166 City Zoning Ordinance. Such housing is generally affordable to households with
167 working members who live or work in the City of Virginia Beach. With respect to home
168 ownership of workforce housing, it includes housing that is priced to be affordable to
169 households with gross annual incomes between eighty per cent (80%) and one hundred
170 twenty per cent (120%) of Area Median Income, adjusted for household size. With
171 respect to rentals of workforce housing, it includes housing that is priced to be
172 affordable to households with annual incomes between sixty per cent (60%) and ninety
173 (90%) of Area Median Income.
175 Workforce Housing Application – An application submitted to the City that
176 provides the necessary information to determine if a household qualifies for the
177 Workforce Housing Program. Participation in the program is contingent upon approval
178 of this application.
180 Workforce Housing Discount. The difference in sales price between the fair
181 market value of a workforce housing unit and the reduced sales price necessary to
182 make such unit affordable to a household at a targeted income level.
189 The section contains definitions of terms used in the ordinance, as well as explanatory
190 material concerning those definitions.
193 Part 2. Sale and Ownership of Workforce Housing
195 Sec. 16-45. Initial sales of workforce housing units.
197 (a) The City shall have the right to purchase workforce housing units offered
198 for initial sale as follows:
200 (1) The City shall have an exclusive right to purchase any workforce
201 housing unit, not to exceed a total of one-third of the workforce
202 housing units for sale within a development, by so notifying the
203 developer of the unit within thirty (30) days from the date on which
204 the City is notified that the workforce housing unit is available for
205 initial sale. If the City does not timely exercise its right to purchase
206 the unit, it may be sold to an eligible buyer.
208 (2) Any workforce housing unit the City has not elected to purchase
209 shall be offered for sale exclusively to eligible buyers for a period of
210 sixty (60) days from the date on which the City's right to purchase
211 the unit expires. Upon the expiration of such time, any such unit
212 not sold to the City or to an eligible buyer may be offered for sale
213 without restriction, provided, that when such a unit is sold, the
214 developer shall pay to the City the difference between actual sales
215 price and the price as reduced by the workforce housing discount.
217 (b) The procedure for initial sales of workforce housing units purchased by an
218 eligible buyer shall be as follows:
220 (1) A developer desiring to enter into a contract with an eligible buyer
221 to sell a specific workforce housing unit for initial sale shall so notify
222 the City, which shall verify the eligible buyer’s continued eligibility
223 under Section 16-46.
225 (2) In the event the eligible buyer continues to meet such
226 requirements, the developer and City shall enter into a real estate
227 sales contract pursuant to which the developer agrees to sell the
228 unit to the City at a price incorporating the workforce housing
229 discount. The City shall assign to the eligible buyer its rights under
230 the contract and shall receive a promissory note, secured by a soft
231 second deed of trust from the eligible buyer, in the amount of the
232 workforce housing discount.
234 The assignment shall further provide that: (i) such loan, plus the
235 shared appreciation of the unit, shall be repaid to the City upon
236 resale of the unit and that such obligation shall be secured by a soft
237 second deed of trust; and (2) that the City shall have the right to
238 repurchase the unit upon resale, or to assign such right to an
239 eligible buyer, in accordance with the provisions of Section 16-49.
243 Subsection (a) establishes the City’s (or its designated agent’s) exclusive right to purchase
244 up to one-third of the workforce housing units in a development and provides limitations on that
247 Subsection (b) sets forth the procedures for initial sales of workforce housing units.
249 Sec. 16-46. Eligibility requirements for buyers of workforce housing units.
251 (a) In order to be deemed an eligible buyer of a workforce housing unit, a
252 household shall meet the following criteria:
254 (1) At least one adult, non-dependent member of the household to be
255 shown on the deed of trust note as a borrower or other obligor
256 shall, at the time of application to the Workforce Housing Program,
257 live or work full-time in the City of Virginia Beach, or must have a
258 bona fide offer of full-time employment within the City of Virginia
259 Beach commencing within three (3) months of the time of
262 (2) No member of the household shall own or have a controlling
263 interest in any other real property;
265 (3) The household’s combined annual gross income shall, at the time
266 of application, be between eighty per cent (80%) and one hundred
267 twenty per cent (120%) of Area Median Income, adjusted for
268 household size; and
270 (4) The net worth of the household shall not exceed fifty per cent (50%)
271 of the sales price of the workforce housing unit being financed. The
272 following items shall not be included in determining the net worth of
273 a household:
275 A. The present value of insurance policies, retirement plans,
276 furniture or household goods;
278 B. The portion of the household’s liquid assets used for the
279 down payment and to pay closing costs, up to a maximum of
280 twenty-five per cent (25%) of the purchase price; and
282 C. Any income-producing assets needed as a source of income
283 to meet the minimum qualifying requirements for eligible
284 buyer status.
286 (b) A household shall, in addition to the foregoing requirement, qualify for a
287 mortgage loan from a mortgage lender acceptable to the City. The City may deny
288 eligible buyer status to any household if it determines that such mortgage loan contains
289 deceptive, predatory or abusive terms.
291 (c) Once determined to be an eligible buyer, a household must continue to
292 meet the requirements of subsection (a) through the time of settlement. A household
293 shall be required to certify its continued qualification as an eligible buyer at settlement
294 and at any prior time requested by the City.
296 (d) Workforce housing units shall be made available by the City for purchase
297 only by eligible buyers who have qualified for a mortgage loan in accordance with
298 subsection (b).
302 The section sets forth the eligibility requirements for qualification of a household as an
303 “eligible buyer.” Only eligible buyers who have qualified for a mortgage loan may purchase
304 workforce housing units offered under the City’s program.
306 Sec. 16-47. Workforce housing pricing.
308 (a) Workforce housing shall be priced so as to be affordable for purchase by a
309 household with a gross annual income between eighty per cent (80%) and one hundred
310 twenty per cent (120%) of Area Median Income, adjusted for household size. Semi-
311 annually, the Workforce Housing Advisory Board shall recommend, and the City Council
312 shall establish, maximum sales prices for workforce housing units based upon current
313 Area Median Income, prevailing mortgage interest rates in the area, real estate tax
314 rates, homeowner’s insurance rates, housing ratios, and the size of targeted
315 households. In determining whether to grant approval pursuant to Article 21 of the City
316 Zoning Ordinance to a proposed development that includes workforce housing, the City
317 Council shall determine whether the proposed pricing of the workforce housing within
318 such development meets the requirements of this section.
320 (b) The Department of Housing and Neighborhood Preservation shall make
321 available to prospective developers of workforce housing a spreadsheet planning tool to
322 assist in determining if a specific development meets the requirements of this section.
326 The section requires that workforce housing be priced at a level that is deemed affordable
327 to households within the income guidelines set forth in subsection (a). The maximum sales price is
328 determined by the City Council semi-annually after the Workforce Housing Advisory Board
329 provides its recommendation. The section also requires that the City Council approve the
330 affordability level of the workforce housing at the time it approves the proposed development
331 under Article 21 of the City Zoning Ordinance.
336 Sec. 16-48. Workforce housing discount.
338 (a) All initial sales of workforce housing units shall be at a price that
339 incorporates a workforce housing discount, as defined in Section 16-44. The workforce
340 housing discount shall be sufficient to bring a workforce housing unit’s sales price within
341 a price range that is affordable to households with annual gross incomes between
342 eighty per cent (80%) and one hundred twenty per cent (120%) of Area Median Income,
343 adjusted for household size The actual amount of the workforce housing discount
344 applicable to a specific workforce housing unit shall be subject to the approval of the
345 City Council.
347 (b) The baseline amount of the workforce housing discount shall be twenty-
348 five per cent (25%) of the undiscounted sales price; provided, however, that if the
349 undiscounted sales price of a workforce housing unit is affordable by a household with a
350 gross annual income between eighty per cent (80%) and one hundred twenty per cent
351 (120%) of Area Median Income, adjusted for household size, the required workforce
352 housing discount may be less than twenty-five per cent (25%). The chart below
353 illustrates the required discount applied to a WFH Unit given the affordability of an
354 equivalent market rate unit:
Affordability Range of Market Required Workforce
Units (as a Percent of AMI) Housing Discount
0% 80% 1%
81% 90% 5%
91% 100% 10%
101% 110% 20%
111% 120% 25%
361 The section details the pricing of workforce housing units with the workforce housing
362 discount applied. The baseline workforce housing discount is 25%; the actual such discount,
363 however, may be lower under the circumstances set forth in subsection (b).
368 Sec. 16-49. Resale of workforce housing units.
370 (a) Prior to offering a workforce housing unit for resale, the owner shall notify
371 the City of the owner’s intent to sell the unit. The City shall notify the unit owner of its
372 intention to purchase the unit within thirty (30) days from the date on which the owner’s
373 notice of intent to sell was received by the City. In the event the City determines to
374 purchase the unit upon resale, it shall have the right to assign the contract to an eligible
377 (b) The City shall tender to the unit owner an offer to purchase such unit at its
378 fair market value. The fair market value shall be determined by the average of two
379 appraisals of such unit based on the sales prices of comparable properties that have
380 recently sold. Such appraisals shall be performed by licensed Virginia real estate
381 appraisers selected by the City.
383 (c) In the event the City decides not to purchase or assign its right to
384 purchase the unit, it shall so notify the owner in writing, who shall thereafter have the
385 right to sell the unit to any other person or entity.
387 (d) In the event the City purchases or assigns its right to purchase a
388 workforce housing unit from the owner of such unit, it shall make such unit available for
389 sale to another eligible buyer for a period of at least ninety (90) days. The City shall
390 notify the eligible buyers on its prescreened list of the availability of the unit.
392 (e) In the event an eligible buyer enters into a contract to purchase the unit
393 within the ninety (90) - day period, the City shall determine whether such eligible buyer
394 continues to so qualify. If such eligible buyer continues to meet the eligibility
395 requirements of Section 16-46, the owner of the unit shall enter into a contract with the
396 City and, if applicable, the City's assignee, to purchase the unit at the fair market value
397 thereof, as determined pursuant to subsection (b). The contract shall further provide
398 that: (i) the amount of the workforce housing discount, plus the shared net appreciation
399 of the unit, shall be repaid to the City upon resale of the unit; and 2) that the City shall
400 have the right to repurchase the unit, or to assign such right to an eligible buyer, in
401 accordance with the provisions of this section.
403 (f) At settlement, the principal amount of the outstanding soft second deed of
404 trust note, plus the shared net appreciation of the unit, as defined in Section 16-44, shall
405 be repaid to the City from the proceeds of the resale of the unit. All such monies shall
406 be deposited into the Workforce Housing Revolving Fund.
408 The City shall finance a portion of the purchase price equal to the amount of the
409 new workforce housing discount by means of a note secured by soft second deed of
410 trust. The new workforce housing discount shall be the same percentage of the
411 undiscounted purchase price of the unit as the percentage of the initial workforce
412 housing discount.
416 The section sets forth the procedures for initial sales of workforce housing units. An owner
417 of a workforce housing unit must allow the City a period of thirty (30) days in which to notify the
418 unit’s owner that it will repurchase the property. Such repurchases are at fair market value based
419 on an appraisal. The City may also choose to assign its right to purchase to another eligible buyer.
420 In any case, principal amount of the soft second mortgage loan, plus the shared net appreciation
421 (defined in Section 16-44), must be repaid to the City
424 Sec. 16-50. Restrictions on refinancing, etc. of workforce housing units.
426 (a) No owner of a workforce housing unit shall:
428 (1) Refinance such unit or encumber the unit with any other mortgage loan,
429 home equity loan or similar instrument without the prior written approval of
430 the Director. Such approval shall be requested no later than thirty (30)
431 days prior to the date of settlement of the proposed refinancing or loan.
432 The owner or prospective lender shall provide any information required by
433 the Director, including, but not limited to, an appraisal of the unit
434 performed by a licensed Virginia real estate appraiser and based on the
435 sales prices of comparable properties that have recently sold. Such
436 appraisal shall be subject to the approval of the Director. In addition, the
437 owner or prospective lender shall be charged a reasonable transaction fee
438 to cover the administrative expenses associated with processing the
441 (2) Repay the soft second mortgage loan until the unit is resold by the owner;
444 (3) Refinance such unit with a loan having a total loan-to-value ratio greater
445 than the owner’s proportional share of the initial purchase price. The loan-
446 to-value ratio is the ratio of the fair market value of the unit to the principal
447 amount of the refinancing loan.
449 (b) The soft second deed of trust shall not be subordinated to any other
450 mortgage or encumbrance, except a valid purchase money first deed of trust recorded
451 against the property.
455 The section places limitations on refinancing workforce housing units and using such units
456 as security for other loans, such as third mortgage loans and home equity loans.
458 Part 3. Rental of Workforce Housing.
460 Sec. 16-51. Eligibility requirements for renters of workforce housing units;
463 (a) In order to be deemed an eligible to rent a workforce housing unit, a
464 household shall meet the following criteria:
466 (1) At least one adult, non-dependent member of the household
467 occupying the unit shall, at the time of application to the Workforce
468 Housing Program, live or work full-time in the City of Virginia
469 Beach, or must have a bona fide offer of full-time employment
470 within the City of Virginia Beach commencing within three (3)
471 months of the time of application;
473 (2) No member of the household shall own or have a controlling
474 interest in any other real property;
476 (3) The household’s gross annual income shall, at the time of
477 application, be between sixty per cent (60%) and ninety per cent
478 (90%) of Area Median Income, adjusted for household size; and
480 (4) The net worth of the household shall not exceed fifty per cent (50%)
481 of the total of rent payments for a period of twelve (12) months. The
482 following items shall not be included in determining the net worth of
483 a household:
485 A. The present value of insurance policies, retirement plans,
486 furniture or household goods; and
488 B. Any income-producing assets needed as a source of income
489 to meet the minimum qualifying requirements for eligible
490 renter status.
492 (b) Before a household may enter into a rental agreement for a workforce
493 housing unit, the property owner or manager of the unit shall verify that such household
494 meets the foregoing eligibility requirements. All property owners or managers of
495 workforce housing units for rent shall maintain a list of households it has screened and
496 determined to be eligible renters.
498 (c) Property owners or managers shall also maintain documentation on each
499 household currently occupying a workforce housing unit for rent. At a minimum, such
500 documentation shall include:
502 (1) Verification of residency or work requirements for eligibility
505 (2) Composition of the household; and
507 (3) Annual gross income for the household and each of the household
508 members whose income is included in determining eligibility.
510 (d) Property owners or managers shall ensure that all persons living in a
511 workforce housing rental unit are listed on the rental agreement. It shall be a condition
512 of the rental agreement for any such unit that the City may inspect the records of the
513 property owner or manager to ensure compliance with eligibility requirements and may,
514 at reasonable times, enter any workforce housing rental unit to verify that it is occupied
515 by an eligible renter.
517 (e) Property owners or managers shall, upon renewal of a rental agreement,
518 but no less often than annually, verify that the occupants of a workforce housing unit for
519 rent continue to meet applicable eligibility standards.
521 (f) If a property owner or manager determines that a household occupying a
522 workforce housing unit for rent no longer meets applicable eligibility requirements, such
523 property owner or manager shall:
525 (1) Require the household to vacate the unit upon the expiration of the
526 current rental agreement; or
528 (2) Allow the household to continue to occupy the unit upon expiration
529 of the current rental agreement at the market-based rental price
530 and make the next comparable market-based rental unit available
531 to an eligible renter at a rental price deemed affordable under the
532 standards prescribed in this Article.
534 The household shall be removed from the list of eligible renters and shall not
535 thereafter be eligible to rent a workforce housing unit for such period of time as
536 applicable the household meets applicable eligibility requirements.
540 Subsection (a) sets forth the eligibility requirements for renters of workforce housing units.
541 Subsection (b) requires property managers or owners of workforce housing rental units to verify
542 eligibility of prospective renters and to maintain a list of eligible renters. Subsections (c), (d) and
543 (e) prescribe procedures for verifying that renters continue to meet applicable eligibility
544 requirements during the term of the lease. Subsection (f) requires that eligible renters who no
545 longer meet eligibility requirement shall vacate the rented unit upon expiration of the term of the
546 rental agreement or that a market-rate unit be converted to a workforce housing rental unit.
552 Sec. 16-52. Rental property compliance agreement.
554 (a) A property owner desiring to rent property under the Workforce Housing
555 Program shall enter into a compliance agreement with the City. The terms of such
556 agreement shall be prescribed by the City and shall set forth the terms and conditions of
557 the owner’s participation in the Workforce Housing Program, including, but not limited
558 to, occupancy and rent requirements, including maximum rents, means of preserving
559 the long-term affordability of workforce housing rental units, and such other terms and
560 conditions as are, in the judgment of the Director, reasonable and necessary to ensure
561 compliance with applicable provisions of this Article and the goals of the Workforce
562 Housing Program. All workforce housing rental units shall be rented in conformity with
563 the income and rent limitations specified in the compliance agreement for a period of
564 not less than fifty (50) years.
566 (b) Property owners or managers shall, upon request of the Director, provide
567 a copy of their most current tenant selection policy or criteria.
569 (c) Any material failure to comply with the terms of an compliance agreement
570 shall subject the owner to a liquidated damages penalty in the amount of Fifty Dollars
571 ($50.00) per unit for each day such noncompliance continues, unless the Director
572 waives such penalty, in whole or in part, based upon his determination that the owner
573 has taken timely corrective action to cure such noncompliance. Liquidated damages
574 collected by the City shall be deposited into the Second Mortgage Revolving Fund.
578 The section requires property owners renting workforce housing units to enter into an
579 agreement with the City setting forth the terms and conditions of the owner’s participation in the
580 Workforce Housing Program. A liquidated damages penalty for material failure to comply is
583 Sec. 16-53. Rental procedures.
585 (a) Workforce housing units shall be rented only to households who meet the
586 eligibility standards set forth in Section 16-51.
588 (b) A developer building workforce housing units for rental purposes shall
589 notify the Director no later than forty-five (45) days prior to the units being ready for
590 initial occupancy. In the notification the developer shall supply the following information:
592 (1) The name of the development and its location;
594 (2) Number of units by type of unit;
596 (3) The size of units in square feet;
598 (4) The number of bedrooms and bathrooms in each unit;
600 (5) The market rental rates of each unit:
602 (6) The actual rates at which such units will be rented as workforce
603 housing units; and
605 (7) Contact information for interested households.
607 In addition, the owner or manager of a workforce housing rental unit shall notify
608 the Director within three (3) working days of such unit becoming available for rent. The
609 City shall maintain on its web site a comprehensive listing of all properties with available
610 workforce housing units for rent.
612 (c) Any household desiring to rent a workforce housing rental unit shall submit
613 to the property manager or manager an application for determination of its eligibility to
614 rent a workforce housing unit. Such application shall contain such information
615 concerning the residency, employment, gross income and net worth for each member of
616 the household as may be necessary to determine the eligibility of such household. The
617 property owner or his designee shall determine the eligibility of the household and shall
618 promptly notify the Director of its determination.
620 (d) A household that meets all of the eligibility requirements set forth in
621 Section 16-51 shall be deemed an eligible renter and shall be placed on a waiting list for
622 a workforce housing rental unit at the development at which the household has made
623 application for a rental unit. At such time as a workforce housing rental unit becomes
624 available at the development, the property owner or manager shall so notify the eligible
625 renters on its waiting list, if any. The property owner or manager may review all tenant
626 applications and make tenant selections based on any lawful tenant selection policy.
628 (e) The City shall make available to the general public information concerning
629 the location of workforce housing rental units and such other information as may assist
630 prospective renters in seeking available workforce housing rental units.
635 The section sets forth the procedures for rentals of workforce housing units.
637 Part 4. Additional Provisions
639 Sec. 16-54. Workforce Housing Advisory Board established; membership; duties.
641 (a) Established. The Workforce Housing Advisory Board is hereby
644 (b) Term. There shall be ten (10) members of the Board, who shall be
645 appointed by the City Council for terms of four (4) years; provided, however, that the
646 initial terms of two (2) members shall be one (1) year, the initial terms of three (3)
647 members shall be two (2) years, and the initial terms of three (3) members shall be
648 three (3) years.
650 (c) Membership. Two (2) members, both of whom shall have extensive
651 experience in practice in the City of Virginia Beach, shall be either land planners or civil
652 engineers or architects licensed by the Virginia Board for Architects, Professional
653 Engineers, Land Surveyors, Certified Interior Designers and Landscape Architects; one
654 (1) member shall be a real estate salesperson or broker licensed by the Virginia Real
655 Estate Board; one (1) member shall be a representative of a lending institution that
656 finances residential development in the City of Virginia Beach; one (1) member shall be
657 a member of the City Council; one (1) member shall be a builder with extensive
658 experience in the construction of single-family detached and attached dwelling units;
659 one (1) member shall be builder with extensive experience in the construction of
660 multiple-family dwelling units; one (1) member shall be a current employee of the
661 Department of Public Works or Department of Planning; one (1) member shall be a
662 representative of a nonprofit housing organization which provides services in the City of
663 Virginia Beach; and one (1) member shall be a citizen of the City.
665 (d) Duties. It shall be the duty of the Board to:
667 (1) Make recommendations to the City Council concerning the sales
668 and rental prices of workforce housing units. Such prices shall be
669 based on the Area Median Income, as defined in Section 16-44,
670 and shall be adjusted semi-annually;
672 (2) Advise the City Council on all aspects of the City’s Workforce
673 Housing Program, including recommendations for modifications of
674 the requirements of the Program; and
676 (3) Report annually to the City Council on the production of workforce
677 housing units, participation in the Workforce Housing Program,
678 and achievement of Program goals.
682 The section sets forth the membership, term and duties of the Workforce Housing Advisory
683 Board. The Board, which acts in an entirely advisory capacity, makes recommendations to the City
684 Council concerning the sales and rental prices of workforce housing units and all other aspects of
685 the Workforce Housing Program, including modifications thereof. The Board is also required to
686 report annually to the City Council.
688 Sec. 16-55. Director and designated agent to establish written rules and
689 guidelines; legal instruments.
691 (a) The Director and designated agent of the City shall establish written rules
692 and guidelines supplementing, and in conformity with, the provisions of this Article.
693 Such rules and guidelines shall provide for, among other things, allocation of
694 responsibilities, sharing of information, coordination of activities and procedural
695 protocols for administering the Workforce Housing Program. Such rules and guidelines
696 shall be subject to the approval of the City Council.
698 (b) Any legal instrument used in connection with the purchase, sale or rental
699 of a workforce housing unit shall contain adequate provisions to ensure the eligible
700 buyer’s or eligible renter’s compliance with the applicable provisions of this Article.
701 Such provisions shall be approved by the City Attorney.
705 The section requires the Director of Housing and Neighborhood Preservation and the City's
706 designated agent to establish written rules and guidelines concerning the administration of the
707 Workforce Housing Program. The rules and guidelines are subject to the City Council's approval.
708 In addition, it requires all legal instruments used in the program (mortgage loans, deeds of trust,
709 etc) to contain adequate provisions, approved by the City Attorney, to ensure that the eligible buyer
710 or eligible renter complies with the provisions of this Article.
712 Sec. 16-56. Violations.
714 (a) The following tables list certain violations of the Workforce Housing
715 ("WFH") Program requirements and the penalties for their violation. Where more than
716 one penalty is prescribed, they shall be deemed cumulative, such that any or all
717 applicable penalties may be imposed:
720 Table 1 (sale/ownership of workforce housing units):
Program Violation Penalties
Falsification of eligibility requirements Permanent ineligibility for the WFH Program.
Must sell WFH unit to the City.
Immediate payment of the City's share of net
appreciation on the WFH unit at resale.
Immediate repayment of the soft second
Failure to occupy WFH unit as primary Immediately reoccupy WFH Unit.
If unable to reoccupy unit, the following
1. Permanent ineligibility for the WFH
2. Owner must sell WFH Unit to the City.
3. Immediate payment of the City's share of
net appreciation on the WFH unit at resale.
4. Immediate repayment of the soft second
Failure to comply with all City Immediate correction of code violation.
regulations for property maintenance
If unable to correct code violations in prescribed
time period, the following penalties apply:
1. Permanent loss of eligibility for the WFH
2. Must sell WFH unit to the City.
3. Immediate payment of the City's share of
net appreciation on the WFH unit at resale.
4. Immediate repayment of soft second
Failure to comply with refinancing and Permanent ineligibility for the WFH Program.
home equity loan requirements of WFH Owner must sell WFH unit to the City.
Immediate payment of the City's share of net
appreciation on the WFH unit at resale.
Immediate repayment of soft second mortgage.
Failure to offer the City first right to Immediate payment of the City's share of net
purchase when desiring to sell WFH appreciation on the WFH unit at resale.
Immediate repayment of soft second mortgage.
Further legal action as deemed appropriate by
End-user enters into a lease-to- Owner must sell WFH unit to the City.
purchase agreement for the WFH unit Immediate payment of the City's share of net
appreciation on the WFH unit at resale.
Immediate repayment of soft second mortgage.
725 Table 2 (rentals of workforce housing units):
Program Violation Penalties
Falsification of eligibility requirements Permanent loss of eligibility for the WFH
such as income, residency, employment Program.
or persons who will be occupying the Must move from the units within 60 days from
unit, etc. date of written notice of being in violation of
Must pay market rate rent on the unit until the
unit is vacated
Failure to occupy WFH Unit as primary Immediately reoccupy WFH Unit.
If unable to reoccupy unit, the following
1. Permanent loss of eligibility for the WFH
2. Must move from the unit within 60 days.
3. Required to pay market rate rent on unit
after receiving notice of violation until unit is
Failure to list all persons living in the 1. Permanent loss of eligibility for the WFH
household on lease; allowing person or Program.
persons not listed on lease to move in
after lease is signed 2. Must move from the WFH Unit .
3.Required to pay market rate rent until
household is in compliance or moves from the
4. Unauthorized persons must immediately
move from WFH unit.
729 (b) In the event the Director determines that there is reasonable cause to
730 believe that a violation has occurred, he shall so notify the eligible buyer or eligible
731 renter who has allegedly committed the violation. Such notice shall be by certified mail
732 to the last know address of the eligible buyer or eligible renter and shall specify the
733 nature of the alleged violation and the facts supporting the Director’s determination.
734 The eligible buyer or renter shall have ten (10) days from the date of mailing of the
735 notice in which to request a hearing before the City Manager or his designee, who shall
736 not be the Director.
738 (c) The City Manager or his designee shall hold the hearing on the earliest
739 practicable date but in no event later than fifteen (15) days from the date the request for
740 a hearing is received. Both the Director and the alleged violator shall be entitled to
741 present witnesses and other evidence in his or her behalf.
743 (d) The City Manager or his designee shall issue a written decision within five
744 (5) working days of the hearing, and shall mail such decision to the eligible buyer or
745 eligible renter by certified mail no later then the following working day. Such decision
746 shall contain a finding that the eligible buyer or eligible renter has committed the alleged
747 violations, or any of them, or that no violations have been committed. In the event he
748 finds that one of more of the alleged violations have been committed by the eligible
749 buyer or eligible renter, the penalty or penalties prescribed in the chart in subsection (a)
750 shall apply.
752 (e) An adverse decision may be appealed to the Circuit Court by an eligible
753 buyer or eligible renter within fifteen (15) days of the date of the decision. No such
754 appeal shall stay the imposition of any penalty except by order of the Circuit Court in an
755 appropriate case.
759 Subsections (a) and (b) contain chart showing violations and the corresponding penalties.
760 The listed penalties are not exclusive, such that any or all of them may be applied to the
761 corresponding violation. The remainder of the section specifies the procedures for the handling of
765 Sec. 16-57. Application, etc. fees.
767 The City shall charge a reasonable application fee and such other ordinary and
768 customary fees in the real estate industry as are reasonable and necessary to cover the
769 costs of the service for which the fee is charged. The amount of such fees shall be
770 determined by the City Council upon recommendation of the Workforce Housing
771 Advisory Board.
775 The section requires the City to charge reasonable application and other ordinary and
776 customary fees in the real estate industry to cover the cost of providing the service for which the fee
777 is charged. The Workforce Housing Advisory Board is to recommend the amount of such fees and
778 the City Council is to finally determine their amounts.
781 Sec. 16-58. Severability.
783 The provisions of this Article are severable, and in the event one or more such
784 provisions are determined invalid or unenforceable by a court of competent jurisdiction,
785 the remaining provisions of this Article shall be unaffected by such determination and
786 shall continue in full force and effect.
790 The section contains a severability clause stating that any judicial determination that one or
791 more of the provisions of this ordinance are invalid or unenforceable shall not affect the remaining
792 provisions, which shall remain in effect.
797 August 22, 2007
800 APPROVED AS TO CONTENT: APPROVED AS TO LEGAL SUFFICIENCY:
805 Dept. of Housing and Neighborhood City Attorney's Office