City Hall planners have an idea for sweetening the never-used “density bonus” to boost “affordable” housing near future light-rail stations: a three for one deal.
Created more than a decade ago, the current bonus lets a developer build one more market-rate house or apartment more than zoning allows for every affordable house or apartment included.
For instance, if 45 units in a 300-unit apartment complex are designated affordable, developer can build another 45 units to rent for whatever the market will bear. The planners’ new idea would allow three times that many: 135 extra market-rate units in exchange for the 45 affordable ones.
“It may help,” Assistant Planning Director Pat Young told the Joint City-County Planning Committee. “It’s certainly not going to hurt.”
Durham’s city and county governments have made a priority of increasing the stock of affordable housing, particularly within walking distance of stations on the proposed Durham-Orange Light Rail line. In 2014, both set a goal of ensuring at least 15 percent of station-area housing would be affordable.
Meeting the goal, though, means finding ways to offset the rising property values that have come with mass-transit systems in other cities, such as Charlotte. Tweaking the density bonus, which no developer has ever taken advantage of, is one “low-hanging fruit” among measures Durham could try, Planning Director Steve Medlin said.
‘It will help’
Experience elsewhere has shown density bonuses effective at at least a 2-for-one ratio, but usually they have been used in tandem with other incentives, said Planning Supervisor Aaron Cain.
Besides the 3-for-1 bonus, Durham planners suggested allowing extra height for buildings with afforable housing units, and eliminating the parking-space requirement for affordable units in the “compact neighborhood” zoning districts envisioned for the light-rail station areas.
“This is a viable aspect to look at,” Senior Planner Michael Stock said. “Getting the ordinance out of the way in terms of the cost of land development.”
“Do you think these will actually work?” asked City Councilwoman Diane Catotti.
“It definitely will help,” Stock said.
Catotti also pointed out a “possible paradox” in that, if the density bonus is based on a project’s original size – say, 300 apartments with 45, or 15 percent, affordable – the 135 bonus apartments raise the project total to 435 and the affordable share becomes less than 15 percent.
“Does that mean we’re weakening our total affordable percentage overall?” Catotti asked.
“That’s one of the things we’ll look at,” said Medlin, adding that more approaches to encourage affordable housing will be coming along over the next few years.
Councilman Don Moffitt and County Commissioner Wendy Jacobs encouraged Medlin and his staff to consult Durham developers about the proposed incentives, and ask them to model combinations of costs and incentives to see what an attractive package of rule revisions might be.
“I understand this is part of the big picture,” Jacobs said, “but we do want to implement something that has a good chance of being used.”
Medlin said the planners will review their ideas in light of the committee’s comments and come back in about 60 days.
“I don’t think (these steps) are going to result in massive amounts of affordable housing,” he said. “But we do know ... this will at least be a little more workable to get (developers) to look at potentially providing affordable housing.”
In 2014, the Durham Board of County Commissioners and City Council set a goal that at least 15 percent of the housing within a half-mile radius of future transit stations would be “affordable” for households receiving 60 percent or less of the area median income (AMI).
Area median income is a standard the federal Department of Housing and Urban Development sets, specific to particular counties and metropolitan areas, and updates each year. HUD defines “affordable” as rent or mortgage payment that takes up no more than 30 percent of a household’s income (nando.com/hud).
For Durham County, the 2014 AMI was $65,700; median for a family of four at 60 percent AMI was $39,420
The planning department’s draft revisions of the density bonus and other incentives is available at nando.com/bonus.