Wake County

Southeast Raleigh proposal prompts City Council members, activists to question affordable housing policy

CORRECTION: Previous versions of this article said a Raleigh City Council meeting occurred Oct. 28. It actually occurred Nov. 5. Correction made on Thursday, Nov. 20, 2014.

RALEIGH -- Every evening, the headlights on Sunnybrook Road illuminate people walking on the shoulder of two busy lanes of traffic, no sidewalks to guide the way. Many are traveling the mile from a stop on Raleigh’s No. 18 bus line down to Walnut Ridge, an apartment complex where some rents are government-subsidized.

“Starting next week, I’ll be humping down to that bus stop – and I’m not looking forward to it,” said Angela Hawkins, 40, who with her family rents a four-bedroom for $1,050 a month in Walnut Ridge.

She figures she’ll have to be out of the house two hours early to catch the bus to her new job at the Triangle Town Center Toys R Us, some 10 miles north.

Hawkins’ situation illustrates why some city officials and activists are questioning Raleigh’s housing policy: Too often, affordable housing is built far from the transportation most needed by residents, and it’s concentrated in low-income neighborhoods.

The issue surfaced in City Hall last week as Raleigh City Council members considered another affordable-housing development proposed for Southeast Raleigh, about 1.5 miles east of the transit-thin neighborhood where Hawkins lives.

Indiana-based Pedcor Investments needs a crucial city approval for the Bluffs at Walnut Creek, but the City Council raised questions about the location and accessibility of the proposed development.

The development on South New Hope Road, to be funded in part by government tax credits and bonds, would include 198 apartments in 11 buildings, plus a clubhouse, just south of Maybrook Crossing Drive.

While Pedcor won praise for proposing apartments reasonably priced for low- and moderate-income people, some asked whether the project’s location would worsen the challenges of sprawl for residents and the city alike.

“My concern with this particular site is, if we don’t provide transportation services to this site now, what is it going to cost us to service this area?” Councilwoman Mary-Ann Baldwin asked at a meeting Nov. 5.

“ ... We’re trying to build ridership. Instead we’re spending money (extending) coverage.”

Before it can proceed, Pedcor needs the City Council to sign off on $21 million in bonds. The developer will be responsible for repaying the loans, but city approval would give the company access to special funding, potentially at better interest rates.

The question on the table is whether the city should use its authority to try to force such developments into existing transit corridors and denser areas – or whether Raleigh should take any affordable housing it can get as rents soar and existing apartments are rebuilt for wealthier tenants.

“We’re getting 198 units of affordable housing, with no burden to the city, as far as debt. For the people who have cars, it could be a very, very good deal. But people who need a bus will just not want to rent there,” said Joe Rappl, chairman of the Congregations for Social Justice’s housing team.

Though the area already is populated by lower-rent apartments and neighborhoods of tightly packed houses, Raleigh’s bus service only barely extends east of Interstate 440. The nearest stop to the Bluffs would be about 1.1 miles north, along a two-lane road lacking sidewalks.

Baldwin likely will vote to endorse the project, she said, but she wants to see future affordable development built along major transit routes, such as New Bern and Atlantic avenues.

Councilman John Odom also is concerned that the project violates a city policy meant to spread government-subsidized developments across Raleigh, rather than clustering them in minority and low-income areas, particularly in Southeast Raleigh.

“It was put in place to make sure that affordable housing wasn’t burdensome to particular neighborhoods,” Odom said.

The same objection arose last year, when the council gave $750,000 from its affordable-housing fund, and an exemption to the “scattered site” rule, for the nonprofit DHIC Inc.’s development near the intersection of Tryon and Lake Wheeler roads. DHIC , formerly Downtown Housing Improvement Corp., is a Raleigh nonprofit dedicated to housing.

“You cannot take the scattered-site policy, keep it here and bring it out when you want it, play peekaboo with it,” Octavia Rainey, a Southeast Raleigh activist, told the council.

The council already has granted Pedcor an exemption from the scattered-site policy, but Odom worries that the city is waiving the rule too often.

Lower rents at stake

Pedcor’s primary business is the development of affordable housing, though the company hasn’t built a project in Raleigh before, said Vice President Mike Byron.

Renters at the Bluffs would make between 50 and 60 percent of the area median income, or a maximum of about $45,500 for a family of four. Rent for a household making half of the median income would range from about $600 for a one-bedroom to about $800 for a three-bedroom.

“The majority of our tenants, they work – they’re teacher’s aides, they’re sheriff’s deputies,” Byron said in an interview.

The development would also receive state tax credits and private funding from an equity investor, Byron said.

Responding to concerns about bus access, Byron noted that only about 3 to 10 percent of the residents of another Pedcor community use public transit.

Transit isn’t the first priority in development; instead, the search for land often brings the company to a city’s fringes, he said.

The council held off on approving the Pedcor bonds, asking for more information from staff about transit and other details. The matter likely will return Tuesday.

The city, meanwhile, has long discussed potential changes to the way it tries to direct and encourage affordable housing. It recently hired Larry Jarvis as director of its new Housing and Neighborhoods Department, which will complement the Raleigh Housing Authority.

Rappl, of the Congregations for Social Justice, wants to see Raleigh set proactive requirements for affordable housing, possibly encouraging proximity to bus stops and schools.

But that mission is getting harder, he said, as developers fight for the city’s last open land.

“People will go wherever they have to go to live,” he said, “but that doesn’t mean it’s easy to live there.”