Affordable Housing in the Triangle: A Primer Ken Bowers, AICP
What is Affordable Housing? Housing is affordable if the total cost of occupancy does not consume more than 30 percent of household income Rental housing: rent + utilities Ownership housing: mortgage + taxes + insurance + maintenance Affordability is benchmarked against percentages of Area Median Income
Income Limits Source: U.S. Department of Urban Development. Values in blue bars are HUD calculations; others are calculated by Community Development staff.
Estimated Allowable Rents 60 and 80 percent of AMI Source: HUD, City of Raleigh
Subsidy Required to Fill Gap Value at Stabilized NOI 100% 90% 80% 70% Market Rate 80% AMI 60% AMI Profit Hard Costs Soft costs Land 60% 50% 40% 30% 20% 10% 0% Unit cost
Who Pays? Public Sector Low Income Housing Tax Credit (LIHTC) HUD (CDBG, HOME, Section 8, Section 202) Local housing bonds General fund revenues Tax Increment Financing Private Sector Inclusionary zoning Community Benefit Agreements Exactions Payees may include land owners, developers, and owners/renters of market rate units
3 Flavors of Inclusionary Zoning Mandatory Fixed-percentage required of new development Incentive-based Density bonuses, fee waivers, or other incentives offered for inclusionary units Rezoning-based Approval of rezoning tied to inclusionary requirement
Fees-in-Lieu Arguments in favor: Fees may produce more units elsewhere when in the hands of the public or non-profits Buyout from a mid- or high-rise may produce more family-friendly units Acceptance from development community Arguments against: Works against the goal of mixed-income communities
Affordable Housing Decisions What size/age/type of households? What income levels? Ownership or rental? Mixed-income or 100% affordable? Where? Cheap land = concentration Expensive land = mixed-income but fewer units
What is the Need? Renter Owner Total Households < $50K 50,855 23,133 73,988 Cost burdened 33,730 15,245 48,975 Percent 66% 66% 66% Source: American Community Survey, City of Raleigh Nearly 50,000 households with incomes under $50,000 are cost burdened within the City of Raleigh.
What is the Supply? City funds 4,513 35% LIHTC only 1,974 15% HUD 6,342 50% Total 12,829 100%
What is the Supply? Inclusionary Housing in Chapel Hill Town Council Approvals Total project units approved since 1995 4,056 Affordable dwelling units 368 9.1% Units sold 235 64% Payments in Lieu $3.6 M Received to date $1.1 M 31%
What is the Supply? City of Durham Affordable Housing Inventory 5,647 total units Type Units Aff Housing 58 CASA 35 CASA/Section 8 21 DCLT Rental 102 DHA 50 HFDA 65 HOME 12 HOME/Section 8 44 Housing for New Hope 54 LIHTC 548 LIHTC/Affordable Housing 102 LIHTC/Section 8 1,756 PRAC/202 77 PRAC/811 74 Project based Section 8 301 Public Housing 1,716 Section 202 48 Section 8 584 Total 5,647
The Panel Loryn Clark, Executive Director of Housing & Community, Town of Chapel Hill Gregg Warren, President, DHIC Inc. Patrick Young, Assistant Director for Development, Durham City/County Planning Department
Current Affordable Housing Density Bonus (AHDB) Standards Projects of 15 units or greater Base bonus of 15% At least 15% of affordable units for households at or below 60% of AMI Bonus of 20% if affordable units for households at or below 50% of AMI Bonus doubled if project has at least 500 feet of frontage on a major thoroughfare Rental units must keep affordability standards for 15 years www.durhamnc.gov
Evaluation of successful incentives Density bonus of at least 2:1 Height increase Parking reductions Administrative review, no legislative process www.durhamnc.gov
Station Area Demographic Summary Median household income in station areas is significantly lower than Durham County s. Station areas exhibit high rates of renter-occupied housing and vacancy. Vast majority of residential structures are in normal or fair condition, with variation among station areas. Transportation is a significant cost for Durham County residents and should be a factor in future housing policy. www.durhamnc.gov
Sample Rental Options $915 Units are available for those earning 60% AMI, but not necessarily near transit $762 Market-rate units can be difficult to afford for those at 50% AMI Community Monthly Rent Monthly Utilities* Monthly Housing Expenses Alden Place $990 $93 $1,083 Pinnacle Ridge $955 $93 $1,048 New Haven $925 $93 $1,018 Independence Park $850 $93 $943 Spring Ridge $845 $93 $938 Yorktown Club $780 $93 $863 Northpoint Crossing $729 $93 $822 By HUD 2013 Income Limits, a family of three at 80% AMI can afford $1,218 in living expenses. *Based on DHA allowance rates and an all-electric unit www.durhamnc.gov
Lowest Income Residents are Most Cost Burdened www.durhamnc.gov