Got questions about Raleigh’s $80 million affordable housing bond? We answer them.
Raleigh has an $80 million affordable housing bond on the ballot this fall, the city’s first housing bond in nearly a decade.
If approved by voters, the money would help those who can’t afford to rent, buy or stay in their homes.
Raleigh is the only city or town in Wake County with a bond on the ballot. It appears on the back page, so voters will have to turn their ballot over to weigh in.
Mail-in ballots are already coming in, and early in-person voting begins Thursday, Oct. 15. Election Day is Nov. 3.
What is affordable housing?
To be affordable, experts generally say, housing (either rent or mortgage) and utilities should not consume more than 30% of a family’s income. Over that, a family is considered “cost-burdened.”
Affordable housing programs typically target those making less than 80% of the area median income. The AMI used for Raleigh covers all of Wake, Franklin and Johnston counties.
People at 80% of the AMI or less are considered low income, and those at 30% or below, extremely low income, according to U.S. Housing and Urban Development definitions Raleigh uses in the city’s five-year plan to address affordable housing.
Altogether there are 77,990 households in Raleigh below 80% AMI. That’s more than the 74,340 households that make more than 100% AMI.
There are 24,685 households at or below 30% AMI. At that level, a one-person household makes $19,800 or less a year and a family of four, $28,250 or less.
The city’s affordable housing bond would address the housing needs of people at all of these income levels, but some critics of the bond say more focus should be placed on those at the bottom income levels.
How many people need affordable housing in Raleigh?
Let’s go back to those 24,685 Raleigh households that are considered extremely low income.
More than 15,500 of those households spend more than half of their income on their homes. That number jumps to more than 24,000 households if every household at 80% AMI and below is included.
Those are the households that need affordable housing.
The situation is just as severe throughout Wake County.
In 2019, more than 97,000 Wake County households — about 24% — were cost-burdened, or spending over 30% of their budget on housing and utilities.
The situation is most dire for Wake County renters. Nearly 56,000 rental households — about 41% of all rental households — are cost-burdened. About 16,500 of them faced possible eviction in Wake County in 2019.
There are nearly 42,000 homeowners struggling to pay for their homes, or 16% of all homeowners in Wake County.
What is the city’s role in providing affordable housing?
The city of Raleigh doesn’t directly build housing but gives money to nonprofit and for-profit groups to help build affordable housing sites.
Other times the city will offer developers land for a reduced price for affordable housing projects like East College Park. Other affordable housing efforts include city programs that help homeowners repair their houses or first-time homeowners to buy a house.
This money comes from the council increasing the property tax rate by a cent in 2016. That “Penny for Housing” fund has generated $23.75 million for affordable housing, according to the city’s Raleigh’s 2021-2025 Consolidated Plan.
How would the bond money be spent?
The money would be spent in five “buckets.”
- $16 million to buy land for future affordable housing. Most would be spent to build affordable housing along transit lines. But it could also be used to preserve existing affordable housing.
- $28 million for public-private partnerships. Part of this would go toward nonprofits to help those who are homeless.
- $24 million for gap financing. This is traditionally how the city has helped created affordable housing. This money would be given to nonprofits or developers to help cover the cost of building affordable housing.
- $6 million for first-time homebuyers. This builds off a program already in the city’s affordable housing department. People must meet income requirements and be buying a home for the first. The $6 million would help create 200 units.
- $6 million for the rehabilitation of homes. This also continues a program already used by the city to help people make repairs so they can remain in those homes.
Will the bond increase Raleigh’s property tax rate?
If the bond is approved it will likely raise the property tax rate by 0.78 cents per $100 valuation. The median home value for Raleigh is just short of $300,000, according to Zillow. That means it would cost the median homeowner $23.40 more a year in property taxes.
Has the city had an affordable housing bond before?
Yes, four times but the bonds were much smaller.
Voters approved a $20 million bond in 1990, a $14 million bond in 2000, a $20 million bond in 2005 and a $16 million bond in 2011.
What is the format of the question?
The question is presented in a yes or no format. People who support the bond should vote yes and those who oppose it should vote no.
What is the wording of the bond question?
“Shall the order adopted on July 7, 2020, authorizing not exceeding $80,000,000 HOUSING BONDS of the City of Raleigh, North Carolina, plus interest, for the purpose of providing funds, together with any other available funds, for community development programs to provide and rehabilitate multifamily and single family housing inside the corporate limits of said City, principally for the benefit of persons of low and moderate income, including, without limitation, (a) the construction or rehabilitation of housing or neighborhood revitalization improvements, (b) programs to provide loans and other financial assistance to such persons and to public and private providers of housing and (c) the acquisition of any related land, rights of way and equipment, and providing that additional taxes may be levied in an amount sufficient to pay the principal of and interest on the bonds, be approved?”
Do you have a question about the bond? Email it to Anna Johnson at ajohnson@newsobserver.com
This story was corrected on Monday, Oct. 19.
This story was originally published October 15, 2020 at 5:00 AM.
