Mayor Bill Bell wants the City Council to take faster, more aggressive action on affordable housing by exploring creating a rental assistance program this year.
“We don’t have to wait,” Bell said. “We aren’t going to force developers to admit people into their units, unless they can get the rent from them.”
Bell’s proposal includes the city covering the difference between the market rate rent and what families earning 60 to 80 percent of the median area income can afford to pay.
The program is needed sooner rather later as downtown’s renaissance has increased housing prices, preventing some individuals and families from living in an area in which the city has invested millions,he said.
“We are going to end up with a downtown with nothing but median- and market-income families living there,” Bell told the City Council. “That is unacceptable to me as mayor of this city.”
Money from the city’s 1 cent property tax, which is dedicated to affordable housing, would be used to pay the rent gap.
Bell initially discussed the proposal at an Aug. 3 meeting after the council approved zoning changes intended to encourage developers to incorporate affordable housing into their developments. He said he isn’t convinced that such tools will be effective.
Bell brought up his rental assistance program again at Thursday’s work session as council members discussed hiring consultant Enterprise Community Partners to help the city develop policy options and recommendations around affordable housing and transit areas. The City Council plans to vote on the $77,000 contract at its Aug. 17 meeting.
After Thursday’s discussion, the council asked Enterprise Community Partners to present an option of increasing that fee to explore implementing Bell’s proposal.
Bell’s initial proposal assumed that the rental gap would vary from $200 to $600 per unit, costing the city from $2,400 to $7,200 per unit per year.
Annual cost for a 100 units could vary from $240,000 to $720,000 annually, which would equal 10 to 30 percent of the annual $2.4 million affordable housing property tax revenue stream.
The proposal received a mixed response from City Council members Thursday.
Councilman Eugene Brown, who had reservations about Bell’s previous proposal to buy four condos in a proposed downtown project, said he’s open to exploring the rental-assistance program.
As the downtown area already has a plethora of new apartment units and a proposed 850 in the pipeline, now is the time to take advantage of complexes that aren’t filling up.
“The availability is there,” Brown said.
Council members Steve Schewel and Diane Catotti expressed concerns about the city maximizing the use of its limited affordable housing funds and expressed interest in exploring the broader issue of affordable housing across the city.
“My priorities are not 100 units downtown in high-end apartments,” Schewel said.
The City Council and Durham County Board of Commissioners passed a resolution in May 2014 that set a goal that at least 15 percent of housing within a half-mile of future transit stations would be affordable to households earning 60 percent or less of the area median income.
Regulatory mandates for affordable housing are no longer an option in the state, but counties and cities can offer developers incentives for building affordable housing units.
My priorities are not 100 units downtown in high-end apartments.
Steve Schewel, City Council member
The changes that the City Council approved Aug. 3 eliminated parking requirements for affordable housing units in certain areas in the city and adjusted the current affordable housing density bonus, which hasn’t been used since it was made available in 2003.
Under the Unified Development Ordinance, developments are required to have two spaces per unit. Parking numbers are reduced to one space per unit in the Compact Neighborhood Tier, which is designed to allow density around future transit stations. There is no required minimum parking rate in the Downtown Tier. Under the change approved Aug. 3, no parking spaces will be required for affordable housing units in the Compact Neighborhood Tier.
In general, the current affordable housing density bonus allows a developer to build one market rate unit for every affordable unit within the project, but has yet to be used, according to a city report.
The change increases the density bonus in the Compact Neighborhood Tier to three market rate units for every one affordable housing units.
The changes also define affordable housing as a residential unit committed for a 15-year term as affordable to households with incomes at 60 percent or less of the area median income for a family, as defined by the U.S. Department of Housing and Urban Development.
The Durham County Board of Commissioners was scheduled to vote on the changes Monday night.
During the Aug. 3 public hearing on the changes, Becky Winders, who spoke on behalf of the Coalition for Affordable Housing and Transit, asked the council to add equity, socioeconomic diversity and affordability into the Unified Development Ordinance’s language relating to densely developed neighborhoods.
Such changes might allow for the socioeconomic impacts to be considered along with impacts on infrastructure and the environment, she said.
“As currently written the definitions and purpose statements in the UDO speak only to density and to the physical characteristics of development,” she said. “Adding equity and diversity values would change the framework for designing and evaluating development.”
Since planning and other staff didn’t have much time to review Winder’s proposal, the City Council sent the request to the Joint City-County Planning Committee.
Median Family Income
The U.S. Department of Housing and Urban Development establishes the formula that defines area median income limits in the Durham-Chapel Hill area, which includes Chatham, Orange and Durham counties. The area’s median income is $67,400.
Income limits for families earning 60 percent of the area median income as calculated by HUD: (Number in family) income limit: (1)$14.150, (2) $16,200,(3) $20,090, (4) $24,250
Income limits for families earning 80 percent of the area median income as calculated by HUD: (Number in family) income limit: (1) $27.750, (2) $43,150 (3) $48,550, (4) $59,900