Norfolk City Council delays vote on Ocean View apartment complex after developer revokes affordable housing units

Stephen M. Katz/The Virginian-Pilot/TNS

A plan to redevelop an aging shopping center in Ocean View with a four-story apartment building and new shops is on hold after the developer reneged on including affordable housing units the day before a scheduled hearing.

Norfolk City Council delayed voting on the mixed-use proposal Tuesday, and appeared divided over whether it would approve the plan without the developer’s commitment to providing affordable housing units. The setback led to a debate about whether the council should adopt more stringent affordable housing requirements for future projects.

“I don’t think we should let them get away with not providing workforce housing. Regardless of what they say, it just means they’re going to take more money to the bank,” said Councilman Paul Riddick, who is retiring at the end of the year.

The project, known as East Beach Market Place, would demolish and redevelop the western end of a shopping center at the intersection of East Little Creek Road and Shore Drive in Ocean View. The proposed apartment building is planned for 96 units, including 12 studio apartments, 56 one-bedroom units, 28 two-bedroom units and shops on the ground floor.

The applicant for the project, Nick Jacovides, CEO of Virginia Beach-based EDC Homes, did not respond to a request for comment.

When the project was proposed earlier this year, it didn’t include plans for affordable housing. But the developer changed its plans after the Norfolk Planning Commission unanimously recommended the council deny the permit for the project if no affordable units were included.

Commissioners contended that, without affordable housing units, the proposed development would be inconsistent with the city’s comprehensive plan, known as plaNorfolk2030.

The comprehensive plan was amended in 2020 by the City Council to include design guidelines that recommend all new multi-family developments be “mixed income.” Since then, 10 multi-family building proposals approved by the council have included at least some affordable housing units, according to city planning staff.

EDC Homes added nine affordable housing units to the project after the planning commission hearing. Each of the units would have been available to people and families making 80% of the area median income, or around $52,000 per year, the starting salary for jobs like teachers and police officers in Norfolk.

But the day before the public hearing, the agreement was scrapped by the developer because of “market considerations,” according to Planning Director George Homewood.

The removal of those units prompted council members to delay its vote, and raised questions among some members about whether stronger affordable housing rules should be adopted for the city.

The council could adopt an ordinance creating more stringent affordable housing rules, but has not done so.

Virginia state law allows such ordinances to be created. Such ordinances typically allow localities to require a percentage of units be affordable in exchange for a “density bonus” allowing more total units in a project than might be otherwise allowed.

“Why we don’t have a policy? Is it because of restrictions set at the state level? Or is it that we haven’t had the political will?” Councilwoman Andria McClellan said. “Affordable housing is the biggest economic risk to our city, to our region. If people can’t afford to live here, they can’t work here.”

Councilman Tommy Smigiel said the affordable housing guidelines in the city’s comprehensive plan have caused confusion for potential developers because the comprehensive plan “is a recommendation” and not a policy.

“As a council we’ve been talking for how many years about an inclusive housing policy, and we have never voted on a policy,” Smigiel said. “We do not have a policy.”

Daniel Berti,