The $95 million affordable housing bond Durham Mayor Steve Schewel pitched during his State of the City address last week would be the largest in the state’s history, city officials say.
“It’s a big lift, I know,” Schewel told the audience. “But it’s time one city in this nation did it, and I know that city can be Durham.”
In his view, the city’s current funding for affordable housing isn’t enough to keep downtown from becoming an expensive enclave for white people. If residents are serious about preventing displacement, they need to put their money where their mouths are.
In 2000, according to the Planning Department, 49 percent of Durham’s housing stock was affordable to three-person households earning 80 percent of the area median income, and 26 percent was affordable to households earning 60 percent of the AMI. By 2015, those earning 80 percent of the AMI could only afford about a third of Durham housing units. For those earning 60 percent of the AMI, just 14 percent was affordable.
According to the U.S. Department of Housing and Urban Development, nearly half of Durham households—53,525 to be exact—earn 80 percent of the AMI or less. (In 2018, that was about $72,000 for a family of three.) Eighteen thousand families earn less than 30 percent of the AMI, about $21,700.
The city’s housing plan, which would be mostly funded by the proposed bond, seeks to drastically increase the city’s quantity of affordable housing, building at least eighteen hundred new affordable units and preserving or replacing more than eight hundred others. That would swell the number of income-restricted, subsidized homes in Durham by at least a third. About half of these units would be on Durham Housing Authority property. (Another four hundred or so affordable units are already in the pipeline between city- and county-backed projects).
The plan also includes moving at least seventeen hundred homeless households into permanent housing, creating more than two hundred homeownership opportunities for low-income families by building new units and creating a down payment assistance program, and stabilizing housing for at least eighteen hundred low-income renters by supporting eviction-court lawyers, financial assistance, and home repairs.
The city estimates all this will cost about $157 million over five years. Between a dedicated portion of the property tax and federal grants, the city already has about $11.6 million a year that it can put toward that total. That leaves a $99 million gap—which is where the housing bond comes in. (Schewel says that $4 million of the plan’s expenses, such as extra salaries and homelessness services, can’t be covered by a bond.)
If the bond is approved, Schewel believes that $95 million will lead to another $445 million in tax credits and private investment.
“We will act on a scale that few if any other cities in this country are doing, certainly no other cities of our size,” Schewel pledged in his address.
If the bond fails, community development director Reginald Johnson says many of the projects could still move forward, just at a slower pace.
This “mammoth” effort, Schewel says, likely wouldn’t be possible if the housing authority wasn’t already redeveloping its public housing stock—including fifty prime acres downtown—through a federal program that allows the agency to supplement its federal funding by borrowing money and partnering with developers. In addition to replacing about four hundred existing units downtown, the DHA plans to add about fourteen hundred new affordable units and nearly seven hundred market-rate units as well as hundreds of thousands of square feet of retail, office, and green space.
The city’s $157 million plan dedicates about $59 million to the DHA’s downtown redevelopment, plus another $20 million for that and other low-income housing tax credit projects. The DHA estimates that its program will cost $566 million.
“The stars are aligned,” Schewel said in his speech. “The only question is this: Do we have the moral commitment and the political will?”
That question will first go to the city council, which will have to vote on whether to put the bond on the November ballot for voters.
Paying back the bond will require a property tax-rate increase—Schewel estimates 2.25 cents, or about $56 per year for a $250,000 home—which will be felt by some of the very people this plan seeks to help. State law prevents the council from targeting higher-value homes or exempting lower-income homeowners with the tax increase.
“I think that the net will be that thousands of people will be positively impacted in terms of the affordability of their housing,” Schewel says. “That will be the net, but this will for sure necessitate a tax increase, and there will be some long-term homeowners that will feel the effects of the tax increase.”
The council hasn’t set a timeline for its decision, but there is support for Schewel’s initiative. During Thursday’s work session, the mayor took an informal thumbs-up poll. While some council members said they want to hear more about how the plan fits into the city’s budget, there were no objections.
“If I had more thumbs,” said council member Jillian Johnson, “they would also be up.”
Contact staff writer Sarah Willets by email at swillets@indyweek.com, by phone at 919-286-1972, or on Twitter @sarah_willets.
The Planning Department is pushing text amendments that amount to the largest rezoning in many years without providing notification to everyone that will be impacted. Why are such major changes/redefinition occurring outside of the Comprehensive Plan rewrite? This is government obfuscation at its worst. Additionally, the changes won’t actually lead to more affordable housing, but actually will increase gentrification as investors and developers will buy single family properties and chop them up. This will only increase the speed of people being priced out of the market. It will effectively tear up the existing neighborhood fabrics without any consideration for provide things like parking that will impact greatly on those of us who already live here. The ideas are not even that new. The small houses on small lots is just an updated version of shotgun houses, which the City and federal government spent millions of dollars to tear down and redevelop. We keep hearing about the need for affordable housing, yet there are no proposed regulations that address short term rentals. Almost all of the communities that are implementing similar proposals as in the text amendments have also started regulating short term rental. This is because on average 10% of units are eaten up by AirBnB and other commercial rental. Regulating them would free up a considerable number of rentals and help stabilize rental and housing prices. Yet instead of doing this, the Planning Department asked a group of developers what they wanted and then proceeded to push these changes out through these text amendments. The survey that the Planning Department is using to justified these text amendments was incredibly biased and rigged to give the answers that the Department wanted, not to mention that the digital survey disadvantages the poor and unrepresented residents. The Planning Department keeps mentioning “context sensitive development”, yet state law prevents them from regulating the appearance of single family homes and duplexes. This is the same department that has so poorly written regulations that it has led to new neighborhood protection overlay districts to prevent many of the same type of changes proposed in these text amendments. I hope the Planning Commission sends these changes back or demands true analysis of how these changes will really impact Durham based on the existing development trends.