The I Love CVille Show With Jerry Miller! - Roger Voisinet And Richard Price Joined Jerry Miller Live On The I Love CVille Show!

Episode Date: June 6, 2024

Entrepreneur & Realtor Roger Voisinet and Architect Richard Price joined Jerry Miller live on The I Love CVille Show! The I Love CVille Show airs live Monday – Friday from 12:30 pm – 1:30 pm on The I Love CVille Network. Watch and listen to The I Love CVille Show on Facebook, Instagram, Twitter, LinkedIn, iTunes, Apple Podcast, YouTube, Spotify, Fountain, Amazon Music, Audible and iLoveCVille.com.

Good Thursday afternoon, guys. I'm Jerry Miller, and thank you kindly for joining us on the I Love Seville Show. We very much enjoy connecting with you through this network, which has become more than a labor of love. It's one of the bright spots of our day. We love to talk topic matter that's local to Charlottesville and Alamaro County and Central Virginia and we try to do it in a way that's ubiquitous and approachable by putting that content on your phones

or where you are social media wise. We encourage you, the viewer and listener to ask us questions and shape the show and participate with the discussion. All we want to do is be the water cooler of conversation for a market we love dearly, Central Virginia, that is roughly 300,000 people strong. I want to start the program by

giving some accolades to Judah Wickhauer, who is going to be behind the camera today as a director and producer. He keeps us online. And as you guys know, we're in downtown Charlottesville, where there's never a dull day in downtown Charlottesville where there's never a dull day in downtown Charlottesville. Judah Wickhauer, if we can go to the studio camera and welcome the stars of today's program, Mr. Roger Voisinet and Mr. Richard Price. I will start with the local luminary, Roger Voisinet, who's sharply dressed, looking sharp himself, a man who can pontificate on a number of topics, a friend. Roger, it's a pleasure to sit across this table from you.

Thank you, Jerry. It's always an honor to be here and share what I know with your followers. People love this show. Thank you. I recognize half the names. They're always on it. Ray Cadell and Woody and others.

And Richard and I have been friends, and we've been doing projects since the 90s? 25 years, something. Yeah, a long time. Yeah. And I'd like to say we both went to Harvard. Richard for three years. I went for three days. Richard Price, an individual that is also a household name.

You will see him often on a bicycle around downtown Charlottesville. You will see him walking up and down the streets of the city of Charlottesville from time to time. A tall guy. And on the squash courts. On the squash courts, of course. Why don't we start with you, Richard. Introduce yourself to those watching the program. Sure, Jerry.

Thanks. Richard Price, architect. I've been here in town for close to 30 years now. I stop and think about it. And a small-scale developer. I've been doing small-scale projects here for, I guess the first thing we worked on was... River's Edge? River's Edge, probably 20, 25 years ago or so now and have done,

gone on to do several other small scale development projects since here and other places around in the, in central Virginia. And Roger Wozenay,

for those that don't know you. Well, let's see. I moved here from Montreal in 1978. A guy named Bob Monroe

with the Monroe Institute was an investor in our company. I lived on the downtown mall right next to Miller's, the very first condo. They were just putting the bricks down and the trees were being planted and that's where I started Virginia Solar. Yeah.

I also was involved starting Live Arts, Charlottesville Blues, some of my pro baseball team, extreme team, roller hockey, state champion roller hockey team. Oh what else you know and then got into real estate when solar was basically destroyed in 1986 by the government. First they started this great industry and we did you know wonderful things and then they just let it go to seed. That's when I got into real estate.

I really wanted to be self-employed. And then I bought my house in the Woolham Mills and started learning about real estate. And I bought my first single-family investment home, which is the topic of today's conversation, 1317 East Market Street. And, of course, I've done other things. Coached UVIS Hockey.

Started TEDx Charlottesville, which we've talked about on the show many times. I think that does it. Married your beautiful wife? Yeah, I married Jessica. Yeah? I was 65 when I got married. I waited a long time. But it was worth it. You are aging like a fine wine,

my friend. Thank you. I'm going to get out of the way of this fantastic panel of experts. Richard, why don't we, actually, why don't we start with you here, Roger? Let's talk Woolen Mills. Because I think when Woolen Mills,

the neighborhood Woolen Mills comes to mind, people think the church. People think the church. People think you. People may think the wool factory. It's a fantastic location. So the Willow Mills was pretty rough in 1982. I bought my home from Chris Murray, who's still around, Panorama Farms.

At that time, it was Mike Vanieres and Peggy Vanieres. That's it, basically. And my house was pretty crude, but I loved it. I had already discovered this home by accident on a bicycle trip. When I lived on the mall, I used to explore the city, and something made me stop at this home. I didn't know who lived there. That was 1980. And then two years later, Chris Murray said, I'm moving to Philadelphia.

Would you like to buy my home? And I was ungainfully overemployed at the time, which meant I had too much work to do for too little money. And interest rates were 16%. And at Virginia Solar, we paid 24.5% interest for our corporate loan. So that was my context. But my father helped me buy the house. It was only $56,000. Actually, it was $60,000 when I did a lease purchase.

I moved in for six months before closing. And it was the first adjustable rate loan. Bonnie Herndon got me this adjustable rate loan with VNB. So I learned about real estate and then in 1997 this home I drove past in 1317 East Market for you know 20 years I always thought it was like one of the ugliest houses around I wish I didn't want to go anywhere near it but the woman who who owned it then sort of freshened it up a bit and went for sale.

So I bought it, and I think the first time I got a loan to get it, FHA loan, I think. I had to pay private mortgage insurance. And then two days after I closed, Oliver Kutner said, I wanted that house. Damn you. And he said he wanted to put a parking lot in the backyard so he would have cut down all the trees 27 years ago. But I never thought about anything other than just starting my investment portfolio. But as time went on, I kept thinking, you know, in the backyard,

it's on this quiet dead-end street. The backyard's unused. It's grass. It's flat. Wouldn't it be great to build another house? So you need, this is what's changed. You needed 6,000 square feet to build a house in the city. Although there's hundreds of homes, particularly in Belmont, that are on 5,000 square foot lots. For some reason or smaller. Or townhomes and condos. Anyways, I could never build a second house. So I kept thinking,

I'm going to wait and wait and wait, and then something will change at some point, and of course it just did. And then, well Richard knew I was thinking about this, so Richard's been thinking about how we can put two or three homes in the back. So we're going to show some pictures that I have and Richard has. By saving the current home, we're not tearing it down, we can build three houses in the rear. So maybe we can start showing those pictures. Absolutely. So Judith's going to call them on screen in order with before, bird's eye view, arrows, and current.

Gentlemen, the show is yours. I'm just along for the ride. Okay. So is it up yet, Judah? Before is on screen. Before is on screen. Okay. This is what the house looked like for 27 years. The first thing I did when I bought it was put up vinyl siding because the siding was pretty bad. And then the tenant over the last 14 years put up the rail, there it is, put up the

little pathway for the wheelchair. His wife was sick. And the tenant, I mean, he's been there for 14 years. And so when he bought a home in Waynesboro, it was coinciding with what we're doing. So the second image shows where we're talking about. So if people haven't seen it yet, if you know where Firefly is, one block to the east of Meade, the Meade light at Firefly is 16th Street. 16th Street, if it extended, would go right to Meade light at Firefly is 16th Street. 16th Street, if it extended, would go right to Meade Park Pool, but it's dead ends.

There's only three houses on the street. And there's two that face east, Mark, and the three on 16th. So here's this great, quiet street with 200 feet of road frontage behind the existing home. So the first thing I did when I hired Ben Myrtle's crew at Rex to take off the siding and paint the asbestos, because it looks, Judah, can we show the after? Yeah, you can. Benjamin Myrtle deserves some props. He's somewhat of a local luminary as well. Heck of a foosball player. Yeah. Buffalo Bills Bills fan. A guy who enjoys a cold beverage like yours truly as well. And someone who's very talented at what he does. I had to just offer a little color.

I told him I'd mention him on air because Drew and his crew are just super. I love those guys. So they did all the exterior work. Then I hired Alpha Dog Junk Removal because the tenant left behind $2,000 to $4 thousand dollars of junk wow it cost me that much to remove it all and then ben recommended a monster cleaning service they're

the ones who go in to a home if it's a crime scene or they do the worst of worse so this wasn't that bad but i'm hired so it's cleaned up now. And I decided not to fix it up. And we'll talk about why when we start talking into the development details. So what's on screen now? He showed you had bird's eye viewed and you put current on screen as well.

We can put anything you want and what you will see will be a 10 second delay. The viewers and listeners will be seeing exactly what you're talking about. So you let them know what photo you want on screen. And then the fourth image was the aerial view of the backyard, Judah. Okay. That's arrows? Yeah, the arrows.

Okay. You'll put that on screen? That's on screen now. So you can see that's actually the tax map with Google Earth overlay. It shows the three arrows pointing to our three future home sites. So now we can talk about what we have in mind under the new zoning. That's where Richard's focus has been. Richard's been working with the city of Charlottesville, various departments, right,

for years helping them craft this new zoning regulation. Well, I don't know how active I was other than, you know, like a lot of people providing comments as they were working through this. Now, I guess we've been calling it the draft zoning ordinance, but it's actually enforced now. We should probably call it the new zoning ordinance. You're right. Yeah.

Okay. So it's not the DZO anymore. We're going to call it the NZO now. New zoning ordinance. New zoning ordinance. Okay. Upzoning. Well, yeah, upzoned.

And, yeah, obviously a lot of the intent there was to increase the supply of housing in the city by allowing people to densify on their properties? And the thinking is, and I'll put it in an approachable way, then throw it to you, if density increases, there's more options, which should create price stability for potential tenants and buyers of real estate in a limited or landlocked 10.2 square mile city? Great. In a nutshell. Well put. Yes.

Okay. No, well put. Yeah, I think obviously with the landlocked city, there's limited opportunities. A lot of people who want to live in the city and the demand way outpacing the supply. So it's obviously had a major effect on the cost of real estate in town. So I think the very least that this new ordinance will do will hopefully help stabilize prices and we won't see so much increase. So kind of

step one in a larger agenda to increase supply and hopefully provide some more housing at the bottom end of the market So kind of step one in a larger agenda to increase supply and hopefully provide some more housing at the bottom end of the market as well. So all that to say, when Roger and I first started talking about this project, it seemed like a great opportunity to put in place what the new zoning ordinance was hoping to accomplish. It's a relatively flat piece of property

which is easy. The context looked like it was right on target for a little infill development. So based on that we developed a scheme that is currently working its way through the entitlement process

and if you want to put up the the first my first image there Judah is that 1317 bird's eye bird's eye okay the bird's eye Judah can do that you got a lot of comments already coming in for you guys okay so the idea is with an existing an existing, we're adding three additional single-family houses on the same lot, small-scale lots. But we'll have, you know, on a nice, quiet side street should make a nice little pocket neighborhood, I guess we'd call it. Yeah. So we're in the middle of the entitlement process right now with that. I should probably say that the NDS is well aware that the zoning ordinance, the new zoning ordinance, was kind of the first step in this process and as we're working through this process we discovered several other little glitches that need attention to in the city city's code so primary among those is the stormwater rigs which are right now are very difficult to manage for projects of the size of this project

we're working on with Roger. So the city is actually working on revisions to the stormwater regulations right now. It's a state reg, so there's some back and forth with the state to do there. There are some fire protection and utility questions that we're working through them on that. Hopefully, over the course of the next

several months, we'll see a lot of these roadblocks start to, or these obstacles, I guess, start to ease up and make things a little more straightforward. Comments are coming in. We have one prominent local developer that is hoping

we talk about the affordable housing criteria for some of these projects and how it's potentially making projects difficult to materialize. Maybe that's a topic for the show. If memory serves correct, it is tied to a threshold of 10 units or more. The affordability requirements for projects, you guys are the experts on that. I'm just a pace setter. We do have one of our favorite viewers and listeners,

Deep Throat, watching the program from his Montana estate. He lives locally in the city as well. Number one in the family here, we can get his photo on screen. He says this from Montana. This project seems like the good case for the NZO. Wow, he's already adjusting to the new acronym. He says, this project seems like the good case for the NZO. A reasonable number of units on a lot that

had a lot of frontage on the side street. So probably not the sort of lot that would be targeted by minimum lot size rules. One question for the panel, is this going to be an actual subdivision or is it using the sub-lot concept? If the latter, I'd love to hear how that works in terms of fee-simple ownership. Is the land shared in some way between the homeowners or their interior sub-lot lines that divide the line? And he also says, this obviously is a sophisticated viewer and listener here, he says, and obviously these look like non-luxury homes that could actually hit in the middle of existing price distribution, which is good for the market.

So where do you guys want to go with that? A lot of questions here. Anything in particular you want to talk about? Yeah, I'll start. We've hired Roger Ray and Associates, Brian Ray, and they did the survey. And we're going to have four sub-lots. The existing home will be on a 3,200-square-foot lot,

and each of the three on roughly a 2,100-square-foot lot, and we can sell them fee-simple. In fact, I'll be selling lots to Richard getting one, and then Mike Sadler of Charlottesville Area Builders will get two. I think it's a good time to explain the homes now. We've come up with a 1,300-square-foot, two-story, three-bedroom, two-bath, nice house. Mike does a terrific job. We're hoping to put a basement in each one,

and the basement could either be unfinished or possibly a basement apartment, which we're hoping could contribute to the affordability. So I think we're going to aim for $600,000. I wish it could be lower, but that's it. $600,000? For the home. Okay. I mean, let's be realistic.

It's probably going to end up there because we've got to put in sidewalks and a lot of things the city wants. We're going to get into that. But I left the front home unfinished. I didn't want to finish it myself because I'm not a contractor. And I thought it would be better to let someone maybe get it at a lower price point and do the sweat equity because there's four ways you could improve that house. Richard's got some ideas for improving. I took Larry Goldstein in this morning. His son's a contractor.

We could redo the first floor. It's just two bedrooms, one bath. You could leave the upstairs unfinished or put carpeting. Then you could either connect to the basement apartment or leave it as an unfinished basement or make it into a studio. I don't know.

Richard knows this. I don't know if it could be a duplex officially. I think he said it couldn't be. Yeah, good point. It's going to cost some money though to make that a duplex. Well, it already is a duplex. It's got two meters and it's going to duplex the whole time. I'm talking in remodeling. Yeah, it's going to cost some money for sure. But a lot of people tackle that. So right now under the existing zoning ordinance, the new zoning ordinance, by keeping the existing house, you can have a total of four units on the property. And I think I've got my numbers right.

And that's what we've applied for with the city. It's also possible if we have affordable housing that meets the city's criterias for affordable housing, which includes documentation and things to demonstrate that, that I believe it's two additional units can be on there, which would mean the basement apartments in the existing house and one of the other houses as well. I was thinking it would be a great property for the land trust, and I was hoping Keith would come see it or Roxanne. They know about it, so I'm hoping still that they'll come over. I could even do owner financing, and I'd love to have the land trust get involved.

Roger Voisin is going to close the deal right here on the talk show. That's right. Keep going, John. Yeah. Well, and I can talk about the sub-lot thing because I've been through that not just with this project, but with several clients now with property around town. The easy place to start with that is it's confusing. And maybe unnecessarily so.

I think there was one of the discussion items during the whole process was, why are we doing this sub-lot thing? Why don't we just get rid of the minimum lot size requirements and just make everything lots? Whatever, that didn't happen. So now we have this distinction between sublots and lots. And from a sales perspective, there's really no difference between the two. It's a fee-simple piece of property. You buy the house and the ground that it sits on like you would buy any single-family house.

So there's no difference, really, between a lot and a sublot. It really comes down to how it's approved and what regulations apply. So the zoning regs apply to lots with the setbacks, the minimum lot size, that kind of thing. And then in residential zones, you're allowed to have sub-lots, which means you can actually divide off a piece of that lot and sell it fee simple. Yeah, which made the whole process and project feasible. Yeah. And so the bottom line is there was, and I can just give an example. I had a friend and a client who was asking me about one of his properties, how to, I've been working with him a bit, about how to subdivide his property.

And he asked the question to the city, you know, is there a minimum lot size? And he got the technically correct answer back from the city, was the minimum lot size in that zone is 2,500 square feet. But what he didn't understand and wasn't clear was that there is no minimum sub-lot size on these lots. So I had to get that clarified with him. So all this to say that the nomenclature is confusing for people, especially the first time through this. But the intent is

and I should, just to back up, I can give some background on that because the idea of a sub-lot started I think with an infill ordinance in Portland, Oregon probably 10 years ago now, but basically trying to take large single-family lots and subdivide them into smaller lots. And they've done a bunch of those now in Portland, this similar housing crisis, trying to keep housing in the existing scale but subdivide it. And that's where it came from. And I think I should probably

shout out to James Freese, now the... Former head of Neighborhood Development Services, now a lieutenant under Sam Sanders. I did, in the very beginning of this new zoning process, met with him at my development project. Roger and I worked together on the 1130 condo project. That's his high street development. I think that sold out, right? Oh, yeah, it sold out a long time ago.

That turned out fantastically well. I did ask you in previous shows, would you do that project again? And my answer was no. Your answer was no. And the reason, I'll tell you the reason, and this goes right to what I was talking about, was I did meet James out there early on when he was starting this process, and he asked me that same question, would you do this again? And I said no, because the issue for me was selling the units. The

only way I had to sell units in that project was to create a condominium. There was no way to sell fee simple at the time because lots at the time had to front on a public street. There was no way to do that. And the costs of creating a condo were somewhere between $5,000 and $10,000 a unit. And not to mention a lot of headache. Both on my side and on the

sales side, it's harder to sell condos, I think, than fee simple. So I would do, now that the new zoning is in place and I can do something similar, fee simple, sure, I'll do, now that the new zoning is in place and I can do something similar, fee simple, sure, I'll do that again, but I'm not going to do another small condo like that. It was too complicated, too much money. So this, the sub

lot was a response to that exact concern that it's very difficult to subdivide these houses and sell them if sub lots have to have street frontage. There's comments coming in. I'll address a couple here. I can answer this one for you guys, but I will not do that. There is some pushback from the viewers and listeners, and I'm seeing some potential first-time homebuyers on the $600,000 that. There is some pushback from the viewers and listeners, and I'm seeing some potential

first-time homebuyers on the $600,000 price tag. From an affordability standpoint, I'll set the stage on that, pass it to you. If we could build a three-bedroom, two-bath. We started with what's sellable, right? Yeah. Three-bedroom, two-baths, 1,300 square feet. We're slightly bigger than the condo at Belmont Lofts. That's two bedrooms for $500,000 or $600,000. I mean, it all has to do with price, I think, cost of materials, labor. Cost of goods, labor.

Yeah, we just come up with that price backwards. We're now in the process of moving from Keswick to Ivy, my family and I. Sold our house in Keswick, bought one in Ivy. Sanding the floors on a house and painting a house, just those two projects alone, we're talking between $40,000 and $50,000. These guys are building homes. So I want to offer a little grace, I guess, if you may, for what you're doing. There was some sticker shock with the viewers and listeners, which could be as expected

from folks. With me, too. That's why I left the front house. Let someone else get in at a lower price point, maybe even do owner financing. Yeah, I mean, the price didn't come from how much can we get for a house. It started with if we build, you know, a modest-sized three-bedroom house on this lot in this location, what are the costs? Here's the costs.

And, you know, with putting in, you know, a modest profit return on our investment, that's where you come out these days. It is shocking how much that is. I mean, I couldn't afford to live in Charlottesville anymore. And we don't know what the city is going to require me as the lot creator to do. Are we going to have to put in a $21,000 sidewalk or not? Probably will. That's $7,000 adding to the house price

and no one will ever use that sidewalk. That's coming on the feed right now. Can Roger or Richard put in perspective the cost of the red tape associated with the project? That is a great question. We'll know in three months more. Yeah. And we should first put in perspective

for those that are watching that may not be in the game what red tape is. Sure. And then we highlight what the cost could be. Well, I'm not sure I'd call it red tape as much as just the cost of entitlement. And this is not just this project, not just Charlottesville. concern around the country with what are the costs of getting approvals to build and some of that is

requirements that developers make public improvements like sidewalks fixing streets adding fire hydrants turnarounds for fire trucks all kinds of things that city regs here streets, adding fire hydrants, turnarounds for fire trucks, all kinds of things that city regs here and other places require that, you know, small development projects take on as part of their expenses.

Utility hookup fees. I mean, utility and then there are. You should highlight that. I don't even know what they are yet. I thought it was, I heard through the grapevine it was $19,000. Yeah. Just for the utility hookup. $13,500 right now per house, I think.

Okay. And we're not going to have gas. Okay. Just electric. So the first is just the cost of building things. The second is there's all kinds of fees associated with that. One is the utility hookup fees. Sometimes there are affordable housing costs you have to kick in,

not necessarily here in Charlottesville and other places, other exactions. There's per-unit fees exactions, they're called, that the developer has to pay to the city. Tree planting, we're going to have to plant quite a few trees. A lot of projects have to add turn lanes and things like that. So these are all costs. So what should be taken here, any developer that's doing projects in this community

should take a snapshot of the last four minutes of the program so they can utilize that to highlight how difficult it is to bring projects online and how when a number to list or sell a home, everyone is quick to push back on the developer. And I would say not so fast, my friends. Look at what's baked in doing a project like this that's not even tied to the bottom line. I mean, not even tied to profit, I guess I should say. A lot of questions coming in for you guys.

Yeah, yeah. I think there's other costs as well. For example, when you're doing public improvements, you have to post a bond, and that comes with a cost. There's also, and I just Roger mentioned, we just submitted a 13-page set for

entitlements, which, you know, because I'm an architect, it wasn't a huge deal for me, but that's an out-of-pocket expense to most developers. And I was just looking at that set, and it's interesting that I would say of those 13 drawings, two or three are things that I needed to work out, we needed to work out in order to build the project. And the other drawings were all about demonstrating to the city, demonstrating compliance to the city. And there's an engineering cost behind doing that as well, or a soft cost, whether it's architect's fees or engineer's fees,

somebody has to do those drawings and demonstrate to the city. There's a lot of, before you even begin to think about breaking ground, there's a lot of expenses that are adding up completely apart from construction costs. Let's put it in perspective.

That's called risk here. This question right here is a fantastic one from Janice Boyce Trevelyan. If Roger and Richard were doing this project, this exact project, in Waynesboro or Louisa County, what would the cost difference be? Well, I don't know yet, but before we get into that, I'd like to say that the average homeowner couldn't put together this all-star team as fast as I was able to. Yeah, you're in the game.

I know Daniel Hires, our engineer, Brian Ray, Mike Sadler's our builder. I mean, he bought one of our condos. Richard and I have been doing projects with him. Richard and I, just that alone is very daunting. The average homeowner would have to find and hire Richard just to study this opportunity and then pay him what his time is. I don't know how much dollars we have in your invoice, which we're working off on his lot cost, but it's quite a bit.

And that's just to get going. We haven't even been past our first week of our site plan submission. And then there's people who are advertising homes to sell, like the one on Chesapeake, to develop three or four. They're going to try to get $500,000 from a builder to go in and do this one. I can start from practically zero. I mean, we highlighted the— People like me have to do this,

not people selling at a high price to attract people like Richard and Mike. We highlighted on this show, it was a listing by Luke Cole of, I believe, Long and Foster in the Lewis Mountain neighborhood, a brick rancher that traded for a million dollars. And it was marketed, as you know, with the opportunity that the new zoning ordinance provided. You're talking a brick rancher that hadn't been updated in decades that some would maybe say could be on the cusp of teardown that traded for a million dollars. It remains to be seen whether that will work out for the buyer. 100%. Yeah. I mean, that's pretty risky.

Yeah. for the buyer? 100%. That's pretty risky. One of the things I hope we can do as part of this project is really get a better handle on what kind of costs other property owners would be faced in doing this kind of small scale development. I think

you guys could be, we call it in the branding advertising world, a pop, a proof of performance yeah because you guys are potentially first in this new zoning ordinance ecosystem you guys might be the pop the proof of performance the barometer if you may a lot of people say in the business world first to market the folks that get slaughtered i'm not going to say that with you guys because you guys are the expert but you might be first to market here and James actually saw that I think James Fries

he once told me this is his favorite little project because he can see obviously it makes sense and the expertise involved yeah and we're definitely working with the city helping work out the bugs in this but I think

and I should probably also point out that because Roger is going for four units, we're going for four units on this property, there's a higher hurdle for approvals here. So if you're just adding one single unit on – If you're just adding an ADU or a cottage in the backyard, you're saying there's less friction. It's less, a far lower bar to do that. So I think there probably would be a bigger market for that kind of work than to do something larger like Would this project have made sense for you, your business person? Would it have made sense for you if it was any less than four units?

I probably could make it work for three. If we tore down the existing home and made the sub lots larger, we'd end up selling the homes for even more money. And they're trying not to do that. I think our homes will be like an alternative to someone buying a townhome or a condo at Belmont Lofts because they're going to have a backyard and a front area and a quiet, safe area. A walkable to downtown like Belmont Lofts. Because they're going to have a backyard and a front area and a quiet, safe area. Walkable to downtown like Belmont Lofts.

About the same, yeah. I love this idea. How about this? Given how tight these houses are, sited relative to each other, do you anticipate some sort of HOA or covenants to make sure everyone plays nice in close quarters? No, I don't think so.

Generally, you set up an HOA when there's some kind of property in common or houses are going to be developed over a period of years that you want to control the design. In this case, we're going to design and build all the houses. Is there any common elements to this? No. Okay. No, no common elements.

No common elements. And, you know, partly this is, it's an in-town property. It's on a quiet side street, and it's literally half a block away from Mead Park. So this is very much about in-town living, not about, you know, living in the country with a big backyard. Yeah. Which I think is going to appeal to a lot of people. Yeah, which I think is going to appeal to a lot of people. Yeah, and there's other projects in town here that have very small, fee-simple lots, and they've worked just fine for the right market.

We'll highlight John Blair watching the show. We love John when he watches the program. You've got a number of local media watching you guys on the program. These guys love doing interviews, in particular, Roger, boys in A, which you're very good at. This is an interesting question. When does the panel anticipate the first for sale sign in the ground or an active listing? To be determined? I would like to see it in

three to four months, but that really depends on the city's feedback. To break the ground? Yeah. On the existing house, I mean, yeah. No, I mean the new houses. Well, and we won't have those built until... Oh, I mean to break ground. Yeah, break ground.

They're asking for when can someone potentially buy it. When do we have an active listing? We probably, if we break ground in four months, we wouldn't advertise it for sale or lease for five, six months down the road. So next year? So we're talking about potentially this time next year? Next year, probably. Man, you talk about you guys. What you guys are doing is impressive.

The carrying costs, the risk profile here. I mean, these guys are taking risk here. And he's hedging his risk by offering subsidized lot prices to the people involved in the project, which is basically diminishing your carrying costs a little bit. That's not everyone to do that. Do you know that there's a lot that sold today at River's Edge, our first project? I won't tell you who bought it. $230,000 for a 6,000-square-foot lot,

most of which is what's completely treed and in the floodplain right across from Riverside Park. For a post stamp. Yeah. That's not flat. Not at all. Yeah, and that's a great caveat here. I mean, we're able to make this project work because of

Roger owns the existing house, free and clear. He has huge advantages here. I am taking my fees and my profit on this on the back end when the houses sell.

Not everybody would do that. Few would do that. It's only because Roger and I worked together for so long on these kinds of projects that I'm willing to do that. Someone comes to me and says I want to buy a house, a million dollars, whatever it is,

pay my fees up front, and they want this whole project to work as a development project, my initial response is going to be good luck. Yeah. The carrying costs are going to be significant. Right. Yeah.

The carrying costs are significant, and the uncertainty is tangible. It's palpable. Yeah. Yeah, we have to make sure we build something people will want to buy or live in, right? We have to start there and work backwards. Yeah. And I think that most of the infill development under this code, We have to start there and work backwards. I respect what you're doing. I think most of the infill development under this code we're going to see is people either doing...

The rainy flat or the cottage in the backyard. Well, that would be great, but those are expensive too. I think probably more so people dividing internal divisions of existing houses. So you're talking like a basement apartment? Basement apartment or an internal granny flat. They used to call them internal accessory units under the old code. So it's important to highlight what he just said. I'm going to put this in very straightforward language.

What he thinks is going to be the primary byproduct of the new zoning ordinance is basement apartments or living options tied to economics. Yeah. Okay? This has nothing to do with the intent of the code or my predilection or my interest, anything. If you look at the economics... Cost of goods, labor. And the complications of doing a project like this, even building a single

ADU in the backyard, a granny flat in the backyard... It was a quarter million dollars? At least, yeah. It's going to be expensive. It's complicated. The average homeowner just doesn't have the money, the time, the skills to make these kinds of things. Or finding the financing. The financing, yeah.

So the easier, simple project is a retired couple, a single person living in a house that's too big and they need some income. And that's a much more plausible, much more attainable kind of renovation to... Because that's a remodeling project. It's a remodeling project. Yeah, exactly. I think we'll see... Those are in the realm right now, I would say, probably of financially feasible. I mean, because the return on investment, business guy to business guy to business guy here,

the return on investment on building a $300,000 ADU on your backyard, it's not going to be the seven points that a bank is offering on a primary residence. It's going to be much higher than that. Your ROI on that is going to be never. It could be your kids getting the ROI. Yeah, at 7% interest. It's not going to be 7% on that because that would be an investment property, rental property. Right.

So that's probably a point and a half higher than the 7%. Eight and a half percent, sure. I mean, bottom line is you're right. The return on that is never. Is never. Is never. Yeah. It's not going to work.

So people aren't going to do that. That's correct. And I've been through this with enough people now, looked at the numbers, looked at the property. Interest rates come way down. Construction costs stabilize a bit. Rents stabilize. Yeah, we might see that. Well, the other thing that's interesting that's happening in a couple of markets, not in Charlottesville because it's not big enough, is companies have a couple, I can think of Los Angeles in particular,

a couple of startups have gotten into the business of turnkey ADUs in the backyard. So they have standard designs. They have products ready to go. They've got the financing all set up. So is it a prefab house? Is it like the Sears rollback houses? It may be. Is that what it is?

Well, prefab is probably panelized. It's probably, you know, componentized as opposed to prefab. But they've got standard designs. They've got the financing worked out. So they've got the entitlements all worked out. So you can basically sign a contract. This is how you take the risk off the homeowner. You sign a contract with a company like that that says, guaranteed, these are your costs when you're done.

You don't have to do anything. You're providing the land and a place to put it, and here's what your costs are and here's what your rental market is. So before you do anything on this, you're sure this is actually going to be a viable investment. Which right now in Charlottesville, doing these custom one at a time with the topography we have here, I think it's going to be a stretch to make these things profitable. Yeah, plus the politics of it, and I'll leave it at that.

Ideally, the process will get easier as it goes, streamline the process a bit. But even with that, just with construction costs, with interest, with the complications, it's going to be tough. Local developer, this one here. And I'm going to respect his anonymity for the sake of the show. Can you highlight the affordable housing requirements of the, as you guys now are calling it, the new zoning ordinance? Ten percent of units, when it's a project of greater than nine units, ten percent of them have to be affordable, to 60% of the area median income, and if they're rentals for 99 years? Yeah. I mean, who's going to go down a project with that?

Yeah, the short answer to that is it's a disincentive to build affordable housing. There it is. Have you passed that along to? Yeah, I mean, the bottom line is that. It's a disincentive to build housing that's greater than nine units. Nine units, yeah. When 10% of your units have to be 60% AMI for 99 years. And, I mean, we can spend a whole show talking about affordability. That's a show by itself. Affordability, yeah, yeah. The, I mean, my experience, and where I'm coming from with this is every project I have developed over the last 25 years is, has some strategy for affordability in it. River's Edge we talked about. We sold two of the lots to Habitat.

River Bluff and High Street, 1130 Condos, both have internal accessory dwelling units that have kind of fallen into that box of affordability. So, you know, I get it. I want to do this, but, you know, I also have to, you know, as a developer, you have to come out in the black. Yeah. You're not a developer. Yeah, you're not going to do this anymore, right? So I guess my, after doing this all these years, my basic take on this is that affordability,

affordable housing needs some form of subsidy, whether that's an internal subsidy where, you know, one unit is basically subsidizing another, or there's a direct subsidy from housing vouchers, for example, or you are a not-for-profit like Habitat or PHA who can take advantage of that. So it's really very difficult to, and I say that because, for example, the accessory dwelling units at River Bluff and at High Street are effectively space that was built relatively cheaply as part of a larger unit. And so that's taking advantage of... Tell them what... So he's referring to we have two office condominiums.

Yeah. Sadler owns one. There's a separate entrance to go upstairs to a one-bedroom apartment that Mike rents for $1,500 a month. Or you could use it for a showroom. He doesn't need to rent it. But that's the, what we're calling ADU. It's not a detached ADU. Not a detached.

But it was built right in. So basically it's just the second floor of a condo. I think that's efficient and intelligent. Yeah, it was great. I would say at River Bluff, I designed about half the houses there. I think

most of those houses I designed have either have an internal accessory unit or designed to easily be changed into one. That's kind of an internal subsidy that you can build in as you're

doing this. Got a lot of stuff coming in for you here. We're at the 1.23 marker. Time flies when you're having some fun. 53 minutes in. This is a good one from there's a reason he's ranked. We do rankings of our 53 minutes in. This is a good one from, there's a reason he's ranked. We do rankings of our viewers and listeners. This is the reason he's number one. It's deep throat. He has this comment. If a mere 10% of affordable housing requirement

at a AMI level that is highly distorted, i.e. it's very high for reasons we have discussed, that tells you that zoning limits on unit count was never a big constraint. Big cities were asking for 25% to 30%, and they're getting projects done. Big cities. Yeah. So offering a little pushback, if you may, that the zoning, the DZO, now NZO, was a solution. And he's pushing on that a little bit. Yeah, I'm not sure it was ever intended as a solution to affordable housing.

I think it was just one step in the... Well, Keefe likes to call it a silver buckshot. So it's one of the pellets. Fair enough, yeah. One of the arrows in the quiver, if you may. Yeah, I mean, it's a first step. You know, the first step here really is finding a way of densifying the city without destroying the character of the city, which I think that I would argue that's probably more the intention of the new zoning ordinance. Nora Gaffney says, best of luck, my friends.

Can I say one thing that I've observed? Yes. This is for viewers who have, if you have a corner lot, if you have a house on a corner with road frontage on the side, this may work for you. It's those internal lots that are going to have a harder time.

This wouldn't work if I owned the house next door, for instance. It's all because of the side street road frontage. Well, I think what would work... And there's quite a few people who have corner lots.

Yeah, and actually, on single lots, it can be complicated. I think, and where we started with the high street, the 1130 condo project, that was three lots. So if you have two lots next to each other, it's relatively easy to make a courtyard project. Right. But that requires two adjacent lots to do that.

I think these units are going to sell all day, every day, and twice on Sunday. Yeah, I think so. I think next year you're going to see rate cuts. You're going to have a deeper buyer pool. And we still have not seen the impact of data science school, the new biotech school. We haven't seen the impact of $11 billion invested into Louisa County. We have not seen the impact of the 225 million Northrop Grumman facility in Waynesboro with an average salary of $94,000 per person. We are going to have an influx of population that is depocketed. We're still seeing the influx of people working remotely. Northern Virginia, bigger cities coming down here

and working through their ISP while commanding $450 an hour. I think you're going to crush it with this. I think that you will have a waiting list for people to buy. It wouldn't surprise me. Yeah. I mean, there's obviously such a huge pent-up demand here in the city, especially for a more modest-sized unit. And another, I don't call it unfortunate,

I just call it, it is what it is. That number, the 600,000 number, whatever it is, is the entry point in the city of Charlottesville. It is what it is. It's the entry point in Charlottesville. Yeah, and I should probably just, kind of an interesting thought. One of the many things I do is I'm a faculty member at a national not-for-profit called Incremental Development Alliance.

And we work with cities and towns around the country to help them develop a pool of small-scale developers. And one of the things that we like to say there is that small-scale development like this is not a how we're doing this, how it's done nationally. This is not a get-rich-quick scheme. None of us are doing this to get rich. At very best, what we're doing is building our long-term net worth equity. So the real value of, for

me, for Roger of these projects and Roger's had this now for 27 years, this piece of property, so he's finally about to hopefully get some value. Some return. Yeah, exactly. So you're holding on to property and it's helping you build net worth.

And I think, to me, that's a real legitimate goal here with this new zoning ordinance for existing property owners, that they have a chance to capitalize on the existing real estate. Yeah, yeah. It makes perfect sense. You said it that well. Well, he's got a 130 upstairs with one of our tenants. We're at 127 here.

I want to give Roger an opportunity to close the deal here. The show is yours. If they want to connect with you, anything you want to talk about. And we have to do this again, fellas. This is fun. Enjoyed it.

If people know me, they know I've been involved with a semi-secret UVA project since 1980 to build, to convince the university to build an on-grounds or on-campus ice arena for the community. So four months ago, Dan Smythe and I, who's on my little committee, there's just three of us, received a $10 million donation towards our project. And before COVID, we had already raised between two and five million. So we've assembled a team. I'm not going to tell you where the university thinks this could go or who I've

talked to at the university because I'm waiting to get a feasibility study announced. That's what I was hoping to announce, and the university will be doing their own release at some point. But I can say for 25 years I've been trying to push the aircraft carrier with a sailboat, and now for the first time the helm is looking at the sailboat, and I'm pointing in this direction, and they're looking that way. So he kind of just teased some breaking news right there. That's what that was.

That's the carrot dangling on the stick. Yeah, and as Alan Taylor said, if you have $10 million, it's pretty much a done deal. Alan Taylor, Riverbend Development. Yeah, we had lunch, and everybody's coming out to help with this project. Lieutenant to Corps and Capshaw, Alan Taylor. Absolutely, yeah. We have so much support. I mean, one of the dads from the current hockey team says, put me down for a million.

I'm going to either raise it or give it to you. We've got other people saying that since 2018. Congratulations, Roger. We have an architect. Well, we have Joe Salentano of EMDO. He's a go-to local architect for sports. Randy Leiberg of JLG Architects in Minneapolis just designs

college ice arenas. Including, if anyone listening, go to Sacred Heart University, Fairfield, Connecticut and find my favorite college ice arena. I would love this. I would love this because he has a meeting at 1.30. Which is in 35 seconds.

I would love to kindly and warmly invite you back to have an entire show on this topic, if you're okay with that. Well, at a certain time, I'm waiting to hear from a few things at the university, but Dan Smythe and I and maybe the new coach for the UVA team will all come on. That would be amazing. That'd be fun.

Guys, this was, I love this stuff. I geek out over this stuff. I'm grateful for your time. Great. Very interesting. Thanks very much, Jerry. It's our pleasure. Thank you for saying this.

Thank you for having us. We had a good time. You guys are great. Good to see you again. Same to you. Richard and Roger, guys, both local luminaries. And Cheryl Twill and Almar on Central Virginia. Judah Wittkower, I know you're against the gun.

Thank you. It's the I Love Seville Show, which you can find anywhere on social media or wherever you get your podcasting content. I think this interview from start to finish was about as informative of an interview that we've ever done. So long, everybody, and take care.

Thanks. That was excellent. He's going to tell us when the mics and cameras are off, which they will be shortly.