Wake County

Details of Raleigh’s $20 million affordable-housing plan emerge

AmeriCorps volunteers build walls for Habitat for Humanity during a 2013 event at the Downtown Raleigh Farmers Market. One part of the Raleigh City Council’s proposal to encourage developers to develop affordable housing would allow the city to make loans to groups such as Habitat for Humanity, encouraging them to rebuild vacant or dilapidated properties near transit stations.
AmeriCorps volunteers build walls for Habitat for Humanity during a 2013 event at the Downtown Raleigh Farmers Market. One part of the Raleigh City Council’s proposal to encourage developers to develop affordable housing would allow the city to make loans to groups such as Habitat for Humanity, encouraging them to rebuild vacant or dilapidated properties near transit stations. ehyman@newsobserver.com

The city’s broad new push to create affordable housing came into focus on Tuesday. For the first time, Raleigh City Council discussed details of a plan that could put $20 million into a proposal to encourage developers to create new limited-rent housing while setting aside more land and money for its affordability programs.

Larry Jarvis, the city’s director of housing and neighborhoods, led the 90-minute presentation and discussion. It was the strongest indication yet of his plans and philosophy for the department he was hired to lead last year.

The city’s goal, in large part, is to provide money or find money so that developers can offer lower rents or sell houses at lower prices while still making a profit.

“We’re looking at closing the gap,” Jarvis said.

Among other possibilities, the council discussed the following ideas:

▪  The city currently encourages developers to distribute their rent-limited housing around Raleigh. The “scattered-site” policy discourages developers from putting subsidized communities in areas with high concentrations of people of minority group or people with low income. Instead, it effectively guides investments to suburban areas.

Jarvis proposed that the city make its policy more flexible, giving higher priority to the development of affordable housing in the downtown area, on sites within a half mile of proposed transit stations and in neighborhoods where the city has “revitalization” plans, while otherwise continuing to discourage the clustering of subsidized housing.

▪  The city also could offer incentives for developers to set affordable rents near transit stations. Raleigh could make loans to groups such as Habitat for Humanity, encouraging them to rebuild vacant or dilapidated properties. The city could forgive the loans, erasing part or all of the groups’ debt, upon completion of affordable housing on the sites.

▪  Raleigh also could help groups fight the loss of affordable housing to gentrification. The city would provide forgivable loans for the rehabilitation and preservation of affordable units in fast-developing areas. The city also could try to mix new, full-rent development with affordable units in “mixed income” communities, similar to the planned rebuilding of Washington Terrace.

“…We want the opportunity to basically negotiate public-private partnerships that would come to council,” Jarvis said.

▪  The city already is looking to spur neighborhood-wide improvements in East College Park. That will include improvements to utility lines and other infrastructure, and the city could sell government-owned residential lots for the development of new housing.

▪  Jarvis hopes by 2018 to create a new center to provide services for homeless people. This would replace the Oak City Outreach Center, he said.

▪  Raleigh could consider the creation of 24 to 40 limited-rent studio units in downtown.

▪  The city will try to offer clear standards for developers seeking city assistance in developing affordable housing.

The city has about $20 million ready to fund the initial push, Jarvis said, including bonds that voters approved in 2011. Essentially, the city is not spending money as fast as it receives money for affordable housing.

“How can we be more aggressive?” asked city manager Ruffin Hall. “ … The programs have been good, but not aggressive enough to keep up with the funding that we have. The first $20 million allows the city to move forward with some of these programs right away.”

In the long term, Raleigh could create permanent new sources of funding for affordable housing. One option would be to tap downtown development for new revenue. The city could take a certain percentage of the new tax revenue associated with the construction of new buildings and put it toward an affordable-housing budget. The city also could set aside a certain amount of the general fund, or sell bonds to fund affordable housing on a set schedule.

Councilman Bonner Gaylord was optimistic that the new “toolkit” could make housing easier to find for people with low incomes.

“It’s extremely positive. All these make a lot of sense,” he said of the proposals at hand.

Councilman Russ Stephenson suggested that the city set a specific goal for how many new affordable units it wants to see created.

“At some point, we’re going to have to have enough information about what we think is the right number,” he said. Councilwoman Mary-Ann Baldwin said that a more predictable program could help draw in private developers to the city’s mission.

Councilman Wayne Maiorano said that the city needs to make sure its goals are realistic.

“I think it’s not only predictability, it’s achievability,” he said.

The council took no action on the matter, but the elected officials will be asked to sign off on new policies at a future meeting.

Kenney: 919-829-4870;

Twitter: @KenneyNC

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