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WEB EXCLUSIVE This election cycle, Raleigh voters will be asked to cast a ballot in favor of an $80 million bond package focused on planning for and funding equitable housing development in the city, especially around transit, over the next five years.
The bond package, which could add an average $25 each year to Raleigh residents’ property tax bill, is broken down into five elements, or “buckets,” as proposed by the city’s Affordable Housing Bond Advisory Committee:
First, some definitions and explainers.
Transit-Oriented Site Acquisition: Money the city proposes to spend buying (or banking) land along planned future transit corridors, with the goal of building affordable housing on that land in the future.
Public-Private Partnerships: The city’s share of funding that will go towards providing permanent supportive housing for chronically homeless people and other projects in partnership with local housing nonprofits. $10 million (50 units) will go to permanent supportive housing for very low income, chronically homeless individuals; $10 million will be allocated to nonprofit partners to create or preserve small scale projects where not less than one third of total units serve very low income residents (those who make less than 30 percent of the area median income, or 30 percent AMI), and $8 million-plus will go to regulatory incentives for new rental development where not less than 20 percent of the units are affordable at 60 percent AMI for no fewer than 30 years (voluntary inclusion model) or for the development of “missing middle” affordable homeownership opportunities.
Low Income Housing Tax Credit (LIHTC) Gap Financing: Funds that supplement housing for very low income residents in the form of rental assistance (such as public housing assistance from the Raleigh Housing Authority and federal Section 8 vouchers) as well as money for first-time homebuyers. Residents who use this assistance pay up to 30 percent of their household income to rent and utilities.
Owner Occupied Home Rehabilitation: Money that will assist long term residents located near transit investments and in gentrifying neighborhoods so they can remain in their homes and age in place.
Down Payment Assistance: Money that will help low to moderate income households buy new homes located near transit improvements.
Click here to see how the funding proposals break down in more detail.
In total, city staff estimates the bond could fund a total of 3,261 affordable housing units over five years. This includes building new units, providing money to existing homeowners to repair or rehabilitate their homes and assistance to first-time homebuyers.
Larry Jarvis, the city’s Housing and Neighborhoods director, admits the units projection is a conservative estimate but “one that shows the diverse income groups served.” Rental units for very low income residents, for instance, don’t generate enough rental income to cover operating expenses for landlords, so units for 30 percent AMI residents have to be mixed with units for higher income residents in oder for projects to be sustainable.
Jarvis says two of the buckets—public-private partnerships and LIHTC gap financing— will support very low income (30 percent AMI) residents. Jarvis’s staff proposes increasing the city-assumed per unit gap financing for rental unit tax credit projects from a five-year average of $20,213 per year to an average $35,000 per year.
“The subsidy required to do that will be more than we have had in the past, and it will result in fewer total units, but we think it is a good balance,” Jarvis said in a presentation to the Raleigh City Council on Tuesday.
While some residents have expressed concerns that the bond doesn’t do enough to assist very low income residents, Jarvis says land banking along transit corridors could present opportunities to create more units for very low income residents in the future.
Council member Jonathan Melton agrees with this view.
“We’ve seen in some other cities that, as they have implemented big transit projects, the land around those projects gets bought up very quickly by market rate developers, so folks who are able to live near new transit routes can probably afford a car and the people who are dependent on frequent reliable transit get pushed out,” said Melton. “So it’s important for us to allocate money for that transit oriented site acquisition.”
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