New affordable housing slowed in Raleigh last year. Can the city keep up with its goal?

As home and rent prices in the Triangle continued to climb over the last several years, the City of Raleigh has been seeking out new avenues to accommodate the growing affordable housing need.

In recent years, city government has passed and proposed several measures to increase the number of affordable units, including an $80 million housing bond approved by voters in 2020.

However, the city’s Affordable Housing Report released this week tells a story of rising housing costs and slowed production of new units. The city outlines “significant barriers,” such as ongoing pandemic-related supply-chain issues and high material costs, that have slowed the process. Raleigh has fallen behind on its ambitious goal of creating or preserving 570 affordable housing unit each year.

By 2026, the city hopes to ensure 5,700 affordable housing units, but data from the report shows the city may struggle to keep up that pace.

Affordable housing continues to be a top campaign issue for city council and mayor candidates running for election this fall.

Here are the highlights of the report, which also shows priorities for the 2022-23 fiscal year.

Rising prices

Both home prices and rents have skyrocketed in the past year, and the city’s report provides additional data to illustrate the need for affordable housing.

• Rents rose by 21% from 2014 to 2021, compared to just 9% nationally.

• Home prices increased by 22% in just one year from 2020 to 2021. Triangle MLS shows home prices peaked in June, with the median home sale price over $493,000, The News & Observer reported.

• Nearly 29,000 low-income renters and 15,000 homeowners are “housing cost-burdened,” meaning they pay over 30% of their income on housing costs.

Affordable Housing Preservation and Creation

In 2016, the city set the goal of preserving and creating 570 affordable housing units per year for the next decade, for a total of 5,700 units. But the report shows the pandemic and ongoing supply and labor shortages have hindered that progress.

• Last year, 156 units were produced, according to the report.

• In total, the initiative has produced 3,028 units since its inception.

• Now, over halfway through the project, the city has four years to complete 2,672 units.

• Even if they completed all the projects listed in the pipeline by 2026, the city would be 172 units shy of their initial goal.

In the Pipeline

But the city has nearly 2,500 affordable housing units in the pipeline. Here is the breakdown of locations in pre-construction by number of units.

• Milner Commons - 156 units

• New Bern Crossings - 192 units

• King’s Ridge - 100 units

• Sumner Pointe I & II - 192 units

• The Pointe at Town Center I & II - 264 units

• Hampton Spring - 56 units

• Thrive at South End - 90 units

• The Summit at Sawyer - 154 units

• Toulon Place - 200 units

• Aspen Spring - 84 units

• Lake Haven - 56 units

• The Preserve at Gresham Lake - 156 units

• The Terrace at Rock Quarry - 132 units

List of ongoing construction

• Abbington Square - 82 units

• Walnut Trace - 180 units

• Booker Park South - 68 units

• Oak Forest Pointe - 120 units

• Primavera - 164 units

Tackling Homelessness

HOME-ARP and other sources of funding are expected to fund housing, rental assistance, supportive services, and non-congregate shelter for those experiencing homelessness.

Here are two projects aimed to help those seeking shelter.

• Renovating the Healing Transitions Men’s Campus with the remaining $2.4 million already allotted. The project will add 100 shelter beds.

• Studios at 2800, an extended stay hotel, will begin “capital improvement.” As tenants move out and units turn over, a portion of units will be set aside as permanent supportive housing for individuals experiencing homelessness. The city bought the 113-room hotel at 2800 Brentwood Road, not far from Capital Boulevard, in late 2021, The N&O reported.

Neighborhood Stabilization

The city has programs to help first-time homebuyers as well as pay for repairs on homeowners who are elderly or disabled. This year’s Homebuyer Assistance Program goals are:

• Provide financial assistance to 25 first-time homebuyers
• Limited Repair Program: Fund repairs to 35 owner-occupied homes
• Substantial Rehabilitation Program: Fund rehabilitation of 15 owner-occupied homes

This story was originally published October 13, 2022 at 11:31 AM.