Frank Cava’s ‘100 Affordable’ initiative aims to build low-income rental housing

Frank Cava, right, with Vice President of Cava Cos. Eddie Dooley in front of the Delaware Avenue home that launched his company’s “Affordable 100” initiative. (Jonathan Spires photos)

After a decade of house flipping and amassing a large portfolio of residential land across Richmond, Frank Cava sets his sights on building more long-term rental housing in a bid to add to housing options for low-income people in the city.

The founder of the real estate investment company Cava Cos. recently launched a campaign to build more than 100 new single-family homes for long-term rental to low-income households, including those eligible for Section 8 housing vouchers.

Called “100 Affordable”, the initiative aims to add, over a period of about 18 months, up to 130 of the so-called “to be built” houses, that is, units built specifically for long-term rental.

Cava kicked off the campaign late last year with an open house at one of the first homes built to achieve the goal: a two-story, 1,300 square foot home on Delaware Avenue in North Highland. Park.

City officials, housing advocates and nonprofits have been invited to tour the three-bedroom, 1½-bathroom home, which Cava says is representative of the types of homes to be built. He said his highest concentrations of residential land include the neighborhoods of Northside, Southside and the Church Hill area.

“I’ve been sitting on this land for a while, but now I can build and lease it affordably,” Cava said, attributing the circumstances to a combination of low mortgage interest rates and rising prices. Section 8 vouchers that raised rents. .

“A few things happened that were coincidental,” he said. “Section 8 raised the price of a voucher up to $250 per house and then the cost of capital after the pandemic dropped. Where I used to pay 4.5% interest, you can get between 3% and 3%. This makes a significant difference in your mortgage payment and your net worth.

Cava and staff members greet guests at the Delaware Avenue Open House. The 1,300 square foot bi-level home is representative of the types of homes he plans to build as low-income rentals.

Combine that with having bought the bulk of the properties years ago at what Cava described as bargain prices, and he said now is the right time to move forward with the initiative, which he said would add more than $35 million in value to the city. .

Along with the Delaware Avenue home, Cava bought the 0.11-acre corner lot in 2017 for $5,000 and built the home last year at a cost of around $150,000. CavaCos. now manages the house, which he says is rented to a veteran.

“We’ve now gotten to a point where we have enough of these units to achieve economies of scale,” Cava said.

Of the lots the company owns that are set aside for the initiative, Cava said about 75 are buildable by right, that is, without rezoning or special use permit approvals. He said about 40 of the homes are currently under construction or in the process of being cleared. With no supply chain issues or permit delays, he said the company could transform those lots with new homes built in about 75 days.

He said Cava Cos. will own and manage the bulk of the new homes, while some may be sold to outside investors, as was the case with the Delaware Avenue home. It was sold Dec. 30 for $250,000 but is managed by the company, Cava said.

“I think the city needs it, and I think the time is right,” he said of the initiative. “I’ve spoken with many people who are in affordable space, and the best thing you can do for people’s health and wellbeing is to get them out of concentrated pockets of poverty.

“If the pandemic has taught us anything, getting people into single-family homes has been of tremendous value during this time. That’s why the housing market has gone crazy on prices, because people want their own space,” he said. “We just think there’s a very viable market now and we have enough inventory to make a dent.”

Laura Lafayette, CEO of the Richmond Association of Realtors and the Central Virginia Regional Multiple Listing Service, was among those who visited the Delaware Avenue home. She called Cava’s 100 Affordable initiative “laudable.”

City officials, housing advocates and nonprofits have been invited to visit the home to help rally support for the initiative.

“If Frank achieves his goals, he will end up installing 100 of these units over the next year or two. It’s quite an injection into our affordable rental single-family inventory,” said Lafayette, who also chairs the nonprofit Maggie Walker Community Land Trust.

“I think that’s quite commendable. Additionally, Frank is particularly interested in accepting people coming out of public housing who have vouchers. It’s huge,” she said. “Often people with vouchers have trouble finding accommodation, and once the voucher is activated, they have a limited time to find that accommodation.”

Adding that voucher recipients often have less financial means to work, Lafayette said, “To be able to find housing for these people, especially new single-family homes, is really just remarkable.”

The more than 130 hospitality sites targeted by the initiative add to more than 200 units that Cava said his company currently leases in the city. He also converts rental properties into homes for sale, as he did with a 75-home portfolio he snapped up in 2020 for $5.5 million.

Since 2007, Cava Cos. has developed more than 3,000 residential sites, built 2,500 homes and sold 2,000, according to its website.

The company has also recently ventured into commercial real estate, picking up an acre of land and two buildings along Westwood Avenue in a deal last year totaling $1.8 million.

Also last year, in response to a 2020 New York Times article that highlighted the lack of trees and higher heat in lower-income neighborhoods in Richmond, Cava embarked on another effort he called his Canopy RVA initiative, in which the company planted a single tree at each of its more than 150 single-family properties. Cava valued the investment at over $30,000.

“The goal is that in five or 10 years it will make a big difference, and then we’ll really start changing neighborhoods where we own a bunch of homes,” he said. “We have a big enough footprint, I think we can make a difference in our own way.”

Julio V. Miller