A planned affordable housing development next to Durham Station has been awarded a competitive tax credit, allowing construction to begin next year.
Nonprofit development partners DHIC and Self-Help, which have been worked with the city on plans for the site, learned Thursday that the North Carolina Housing Finance Agency had granted its application for 9 percent Low-Income Housing Tax Credits.
According to a statement from the city, the award amounts to about $9 million of the $17 million project, now known as the Willard Street Apartments. Construction could begin as early as next summer and wrap up in 2020.
“These tax credits were the key missing piece to allow DHIC, Self-Help and the City of Durham to move forward together to develop eighty-two much-needed affordable apartments that will serve households earning 60 percent of Area Median Income and below,” Den Levine, director of business development with Self-Help’s real estate team, told the INDY in an email. Sixty percent of Durham’s area median income equals about $48,000 for a family of four.
The development, at the intersection of Jackson and Willard streets, will also include retail space and parking. The city has already committed $3.6 million to the project, and Duke University and Capitol Broadcasting are kicking in another $2.5 million, which could alleviate the need for revenue-generating office space to offset costs.
“I am thrilled with this tax credit award, which will provide crucial investment in affordable housing right in the middle of downtown,” Mayor Steve Schewel said in a statement. “The City, Self-Help, DHIC, Duke, and Capitol Broadcasting have all come together on this project of truly affordable rental housing on City-owned land adjacent to Durham Station. We are grateful to the N.C. Housing Finance Agency for this tax credit award, which allows construction to begin.”
The tax credits were a critical part of the development. There are two types of low-income housing tax credits: 9 percent, which will subsidize much of a project but are harder to come by; and 4 percent, which are much easier to secure but cover fewer costs.
Under the Low-Income Housing Tax Credit program, the IRS distributes a certain amount of tax credits to state and local agencies, which pass them on to developers. Developers then typically sell them to banks and investors to create equity. In North Carolina, the credits are distributed by the North Carolina Housing Finance Agency.
The Durham Housing Authority plans to seek 9 percent tax credits to redevelop one of its properties downtown beginning in 2020.
