Wake County leaders on Wednesday announced they’ve secured a $47 million bank loan that will fund efforts to save existing affordable apartments and homes, which have been lost by the thousands since 2019.
Raleigh is one of the many cities that is losing affordable places to live as landlords raise rents (sometimes by more than 100 percent) or sell to developers, who raze and replace the properties with luxury units. Affordable home buying is also disappearing, as sale prices in some formerly-affordable neighborhoods have skyrocketed alongside new construction. Most new homebuyers are facing unsurmountable financial barriers to getting a loan or paying a mortgage.
Advocates often refer to this kind of housing as “naturally-occurring affordable housing,” or NOAH. Since 2019, Raleigh has lost nearly 9,000 NOAH units, and experts estimate the city has a deficit of nearly 20,000 affordable apartments.
In Wake County, about 59 percent of apartments with rents below $750 per month (or $1,000, when adjusted for inflation) have been lost since 2010, along with 40 percent of units with rents below $1,000 per month ($1,360 in today’s money).
“Without preserving the existing affordable units within our communities, we’re just treading water when it comes to solving the bigger issue of our housing crisis,” said Wake County Commissioner Vickie Adamson in a news release. Adamson is unopposed in her bid for reelection.
“This is one of the biggest investments the county has ever made into an affordable housing program, and it showcases our commitment to keeping residents in homes they can afford and in communities they love.”
What will this money do?
Wake County worked with major banks Truist, First Horizon, and Wells Fargo to secure the $47.1 million loan. The money will go directly into the Wake County Affordable Housing Preservation Fund, which started last year with $10.5 million from the county and $4 million from Raleigh, and will bring the fund’s balance to $61.6 million.
The funding provides loans to cooperative developers and nonprofits so they can buy property that comes on the market and keep it affordable. Raleigh has already approved a loan to CASA, an affordable housing nonprofit, to buy the historic Grosvenor Gardens apartments. Because of the program, these apartments will remain affordable to renters.
“Right now, we’re losing affordable units much faster than we’re adding new ones,” said Baldwin in the news release. “We want to turn that around … This fund is exactly how we want to be investing our local housing dollars.”
With the addition of $47.1 million to the preservation fund, the county “is immediately able to allow loans to be made fast enough for development partners to take advantage of competitive acquisition opportunities,” states the news release. “It’s estimated this fund will be able to preserve 3,170 affordable housing units over the next 15 years.”
Developers can qualify for one of two loans:
• Bridge Builder Loan, a short-term revolving loan to help acquire or maintain affordable multifamily rental properties, giving developers time to stabilize the properties and obtain long-term supportive financing, or
• Place Saver Loan, or permanent financing loans to acquire, rehabilitate, or preserve multifamily rental properties, whether naturally occurring affordable housing or expiring legally binding affordable housing.
The loss of affordable housing has become a major campaign issue ahead of this year’s elections for Raleigh City Council and the Wake County Board of Commissioners. Mayor Mary-Ann Baldwin is facing strong criticism from opponents Terrance Ruth and DaQuanta Copeland on the loss of affordable housing, as well as from other city council candidates who say she’s not doing enough to regulate the market.
The announcement of a multimillion-dollar investment in preserving NOAH, just 13 days before the election, could sway voters on Nov. 8.
Potential investors and developers can learn more about the Wake County Affordable Housing Preservation Fund at wakegov.com/preservationfund.
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