By Brandon Martin
As the Martinsville-Henry County area continues to struggle with providing affordable workforce housing, one of the recent projects to help solve the issue could potentially be out of the price-range for prospective buyers once completed.
Martinsville City Manager Leon Towarnicki said the Five Points Neighborhood project is being affected by delays with the Virginia Department of Environmental Quality (DEQ).
“There are some time issues involved with how long it is taking to get permitting issues through DEQ,” he said. “Due to some permitting issues that we ran into with DEQ, we then had to do an entire new set of plan development related to stormwater issues and managing it in accordance with DEQ regulations.”
The project is slated to construct 27 units on both sides of W. Church Street, near Uptown Martinsville. Twelve of the units will be single family homes on the southside of the street and the other 15 homes will be townhouses located on the northside of W. Church Street.
A virtual groundbreaking ceremony was held for the project in November 2020.
“We were ready to begin signing contracts for the construction of those houses in December,” Towarnicki said. “We submitted that information to DEQ in January. We still have not gotten approval. Here we are in May and we are still awaiting that to happen.”
Towarnicki said the houses were originally supposed to cost approximately $120,000-130,000. He said the city recently signed contracts to construct five houses that were priced at $156,000.
“So, in that period of time that we have been waiting for approval, the price of those houses has escalated that much,” Towarnicki said. “We are going to have to find ways somehow to plow money back into those houses to reduce that cost because it’s pushed it beyond being affordable for somebody that is making $15-20 an hour which was the intent all along.”
He added that if the project weren’t delayed so long by DEQ, then “we wouldn’t be in this situation.”
The Harvest Foundation received approximately $500,000 in grant monies from Virginia Housing to start the project.
“The intent of that grant was to pay down the development costs related to grading, utility installation, and foundation work,” Towarnicki said. “Basically, to pay all of that down so when a prospective buyer decided to buy a house or a townhouse, their only cost was going to be the cost of the house.”
According to an analysis by the National Association of Home Builders, lumber prices have tripled over the last year, pushing the price of an average new single-family home to increase by $35,872. The calculation was based on the softwood lumber that goes into the average new home. Included is any softwood used in structural framing, sheathing, flooring and underlayment, interior wall and ceiling finishing, cabinets, doors, windows, roofing, siding, soffit and fascia, and exterior features such as garages, porches, decks, railing, fences and landscape walls.
“The price escalation is nothing unique to this project,” Towarnicki said. “If you’ve gone to Lowe’s in the last 2-3 months, you’ve seen what has happened with the price for a sheet of plywood. The prices of materials have just gone absolutely through the roof.”
This wouldn’t have been an issue if the Five Point homes had been under contract six months ago, Towarnicki said.
“We are hoping if we can achieve some savings elsewhere in the project, that some of that savings can be plowed back into the price of that house and bring it back to what our original intent was and that’s a house somewhere in the ($120,000-130,000) range,” Towarnicki said. “This was intended to be workforce housing.”
Martinsville, Henry County, the United Way of Henry County and Martinsville, the Harvest Foundation, Nationwide Homes, Silverpoint Homes, the Martinsville-Henry County Economic Development Corporation, the U.S. Department of Agriculture Rural Development, and Virginia Housing are partnering on the project.
During a groundbreaking ceremony in November, Philip Wenkstern, executive director of the United Way of HCM, said his organization would be responsible for guiding individuals through the process of homeownership.
“At the United Way, we firmly understand the importance of homeownership. Both in terms of improving one’s net worth as well as conferring true stability on one’s family,” he said. “The United Way’s primary role in this project is going to be helping individuals enter the pipeline for this homeownership program.”
Wenkstern also highlighted the United Way’s Individual Development Account Program.
“This program provides max saving accounts for individuals that are interested in purchasing a home,” he said. “It also provides financial education training, so they are better able to manage their finances and be more successful once they actually own the home.”
Wenkstern said individuals will be able to save $500 and have their savings matched at a rate of $8 for every $1 saved.
“So, potentially up to $4,000 in grant funds going to help with down payment assistance,” he added.