Arlandria Housing Project Faces Funding Gap Despite $16M Bond Deal

Community Lodgings, Inc. is asking the City of Alexandria for a tax abatement to close a funding gap on a new affordable housing development in the Arlandria neighborhood. The project involves demolishing three 1940s-era apartment buildings and constructing a six-story replacement structure.

The city’s housing director, Aspasia Xypolia, told the City Council that the $58.8 million project still lacks sufficient funds despite identified tax credit equity and a first mortgage lender. She noted that the developer has paired financing with $16 million in tax-exempt bonds issued by the Alexandria Redevelopment and Housing Authority. Xypolia stated that the developer will close on those bonds before the end of the calendar year.

A new zoning text amendment is required to accommodate this financing structure. Xypolia explained that the tax abatement is necessary to bridge the remaining financial shortfall. Construction on the site is expected to begin in April 2027.

The site at 3908, 3912, and 3916 Elbert Avenue currently contains three buildings with 28 apartments. A special use permit approved by the City Council in 2023 allowed for the demolition and replacement with a 91-unit building containing 182 bedrooms. That permit expired earlier this year, prompting the developer to seek an extension in February.

All 91 units in the new building will remain affordable for renters earning between 30% and 60% of the area median income. Wesley Housing has been selected as the development partner for the project. Xypolia confirmed that residents of the existing 28 apartments were relocated during the summer and can return to the property once construction is complete.

City Councilman Canek Aguirre expressed optimism about the project’s progress. He said, “This project is a long time coming, so we’re almost there, almost across the line. Really excited about it.”

The Planning Commission will hold a public hearing on the zoning text amendment on Nov. 5. The City Council is scheduled to hold a public hearing on Nov. 14 to consider both the zoning change and the tax abatement. An implementation hearing is set for Dec. 12.