Asheville Council approves $1.9 million grant for microhousing development

Asheville City Council awarded a $1.9 million tax abatement to Aston Flats, a 231-unit microapartment development, at its July 25 meeting. The funding is through the city’s Land Use Incentive Grant. The approval came despite a staff recommendation to delay the project until new LUIG policies were established to address microhousing units.

“Currently, we do not have any guidelines in LUIG policy regarding microhousing,” said Sasha Vrtunski, affordable housing officer, in her presentation to the Council. “[City Council] previously voted to delay the consideration of this request, and staff would recommend another delay so that we are able to develop new policies for microhousing units.”

According to the presentation, the Affordable Housing Advisory Committee had previously expressed multiple concerns with the use of LUIG grants for microhousing, including whether the incentive should be adjusted to account for the smaller unit size, what the demand for smaller units would be among those people seeking affordable housing as well as whether microhousing projects need subsidies to be built.

Vrtunski stressed that the recommendation was “not a reflection of the overall quality” of the Aston Street project. The delay, she noted, was meant to offer additional time to revise the policy in “a more holistic way.”

This is not the first time that the project’s developer, David Moritz, has sought a grant for a microhousing development. In 2021, Council approved a roughly $593,000 grant for his 80-unit microhousing development at 217 Hilliard Ave. Each unit in the development was sized at no more than 250 square feet and would share a communal kitchen and living space with up to 17 other units.

The Hilliard project technically adheres to all requirements for the LUIG program. However, as mentioned by Vrtunski, the approved grant was a significantly smaller amount.

“City staff saw benefit in using the 217 Hilliard Ave. project as a pilot program for microhousing units,” Vrtunski said. “To date, that project still hasn’t gotten all of the necessary permits required to even break ground, so we really haven’t seen the impact that this type of housing will have on the community.”

Despite this, several Council members voiced their concern that further delaying a decision on the grant for the Aston Street project, which Moritz initially applied for in September 2022, could lead to the development being canceled altogether. Vice Mayor Sandra Kilgore noted that while there may be risks associated with the project, it would ultimately bring in more affordable housing, which was the purpose of LUIG.

“I think that this development is a good fit for the city and will help to bring more diversity downtown because people could actually live where they work instead of having to commute,” Kilgore said. “Yes, it will serve as a pilot to see if this kind of housing will work, but I think that we may not want to take a chance at losing this development.”

After voting down the motion to delay the consideration of the request, Council member Sage Turner moved to approve the LUIG application that evening. She noted that while the policies within the LUIG program should be updated, Council should not further delay a housing development that has been in the works for nearly a year.

“I fully agree that we need to look at our LUIG policies, but in the meantime, let’s not stop what is already in the queue,” Turner said. “We put so much effort into addressing our housing crisis … and this project is helping with the issue.”

The motion to use LUIG funding for the Aston Street development was approved in a 5-2 vote, with Council members Sheneika Smith and Antanette Mosley opposed on the grounds that they were unsure if the development would meet the needed requirements for affordability as laid out in the LUIG policies.

With the development approved for grant funding, the developers will now begin the process of applying for building permits and approvals to begin construction. According to Moritz, they hope to begin breaking ground within 18 months.