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Raleigh may consider an affordable-housing bond this fall. How high will voters go?

Is it ‘reasonable’ for large developments to have no affordable housing, asks Raleigh Council member

Members of Raleigh City Council and City Attorney Robin Currin discuss voluntary affordable housing conditions for developers.
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Members of Raleigh City Council and City Attorney Robin Currin discuss voluntary affordable housing conditions for developers.

City voters will likely see an affordable housing bond on the October ballot, but the exact dollar amount — and how much the property tax would have to go up to pay for it — hasn’t been decided.

Raleigh staff outlined three options for the City Council on Tuesday, ranging from $37.7 million to $75.7 million, which if approved would require an additional half-cent to one-cent increase in the city tax rate. Each cent on the tax rate costs the owner of a $300,000 home $30 a year.

The city of Durham is considering a $95 million affordable-housing bond this fall. It would take a 1.25-cent increase in Raleigh’s tax rate to match that amount.

Regardless of the final amount, this would be Raleigh’s largest affordable housing bond in recent history.

“We do want to continue to be a city where a wide range and a diverse range of people can live here,” said council member Russ Stephenson, who’s pushed for the bond referendum this year. “We want to be inclusive. And there are only so many ways to do this.”

Raleigh leaders voted to increase the property tax rate in 2015 to build 5,800 homes over 10 years. But the city is continuing to lose affordable housing, said council member Stef Mendell.

There are more than 100,000 cost-burdened households in Wake County, meaning they spend more than 30% of their monthly income on housing and related costs like utilities.

“We know the hole gets deeper every year,” Mendell said. “And we know we can’t replace what we are losing.”

Although they did not agree on an amount, council members did agree on how the money should be spent.

Here’s what that would look like, according to the city presentation:

30% would go toward buying land along transit corridors, including along bus rapid transit lines, to make sure people can afford to live near transit. This would be a new city program.

25% would go toward gap financing for tax credit projects — something the city already does. This is where the city provides loans for affordable-housing developers to cover construction costs. The city approved six projects through that program during Tuesday’s meeting.

25% would go toward public-private partnerships, meaning the city would seek partners to create affordable housing. This would be a new city project.

10% would go toward the city’s homeowner rehabilitation program, which provides homeowners a forgivable loan to help fix their homes so they can remain in them.

10% would go toward the city’s down payment assistance program, which helps homeowners buy homes.

Council members must decide whether to move forward with a bond this year or wait until the 2020 election. Council member Nicole Stewart agreed that the bond is a priority but worried about rushing to get it approved.

“I am really conscious of what the county proposed last night for their (tax) increases,” Stewart said. “And recognizing our residents do not operate within a bubble when it comes to taxes.”

The Wake County manager proposed a tax increase of 6.36-cents, with 3.8-cents coming from three voter-backed bonds, during Monday’s county commissioners meeting. The owner of a $300,000 house would pay $2,154 in county property taxes, a $191 increase.

The city has had three affordable-housing bonds since 1999, totaling $50 million. Charlotte voters backed a $50 million bond last year. Chapel Hill voters approved a $10 million affordable-housing bond last fall.

The city has until June 18 to make a decision about the amount, and the council will discuss the details at its first meeting in June.

The bond wasn’t the only affordable housing item on Tuesday’s afternoon agenda. City leaders approved $8.5 million in gap financing for six affordable housing projects that would create 645 units. But those units will only be built if they receive backing from the North Carolina Housing Finance Agency.

Here’s a look at the projects the city approved:

Note: Wake County’s area median income (AMI) is $59,100 for an individual or $84,300 for a family of four.

Abbington Square

Location: 6201 Litchford Road, Raleigh

Total Units: 82 units for all ages

AMI target:

30% AMI: 26 units

60% AMI: 56 units

Proposed rent: $412 to $1,222

City contribution: $205,000

Average loan per unit: $2,500

Developer: Rea Ventures, 803-788-3800

Abbington Village

Location: 2929 Forestville Road, Raleigh

Total Units: 85 units for all ages

AMI target:

30% AMI: 27 units

60% AMI: 56 units

Proposed rent: $412 to $1,222

City contribution: $603,000

Average loan per unit: $7,094

Developer: Rea Ventures, 803-788-3800

Booker Park South

Location: 1900 Booker Drive, Raleigh

Total Units: 68 units for people over the age of 62

AMI target:

30% AMI: 17 units

60% AMI: 51 units

Proposed rent: $400 to $920

City contribution: $1.95 million

Average loan per unit: $28,676

Developer: DHIC, 919-832-4345

Hampton Spring

Location: 216 Buck Jones Road, Raleigh

Total Units: 56 units for people over the age of 62

AMI target:

30% AMI: 14 units

40% AMI: 4 units

50% AMI: 8 units

60% AMI: 30 units

Proposed rent: $400 to $775

City contribution: $800,000

Average loan per unit: $14,286

Developer: Evergreen Construction, 919-848-2041

The Summit at Sawyer

Location: City-owned property surrounded by Garner Road, Sawyer Road and McMakin Street, Raleigh.

Total Units: 154 units for all ages

AMI target:

40% AMI: 11

50% AMI: 22

60% AMI: 80

70% AMI: 41

Proposed rent: $515 to $1,050

City contribution: $3 million

Average loan per unit: $19,481

Developer: Solstice Partners, n/a

Toulon Place

Location: In the South Park/Garner Road area

Total Units: 200 units for people over the age of 55

AMI target:

40% AMI: 11 units

50% AMI: 31 units

60% AMI: 109 units

70% AMI: 49 units

Proposed rent: $560 to $1,200

City contribution: $2.01 million (The city committed $3 million previously.)

Average loan per unit: $10,089

Developer: Solstice Partners, n/a

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