This is the second part of a two-part series on housing in the Triangle. Read part one here. 

After eight months of viewings, dozens of bids, and thousands of dollars, Tina Love-Hinton got the keys to her first home on August 16. At that moment, she felt profound relief.

“I was ecstatic, overwhelmed, but mostly relieved to finally have a home for my children,” Love-Hinton, a mother of five, told the INDY. “It’s a process I never want to go through again.” 

As mentioned in part one of INDY Week’s series on the local housing market, tax relief, rent control, and affordable housing preservation could help many people stay in their homes. But for people looking to buy a new home in Raleigh or elsewhere in the Triangle, there’s another problem—they simply can’t afford it. 

Love-Hinton started looking for a home in January, she says, but even in places like Dunn and Angier, fairly far to the south of Raleigh, the persistent housing shortage inflated prices and created competition impossible for her to beat. 

“I wanted to stay in Harnett County, where I was born and raised, but the housing market was crazy,” Love-Hinton says. “You have people from various places upstate, Connecticut, New York, who are coming down here with cash. They aren’t playing either. Some people have outbid me by $30,000 or $40,000.”

For those making less than $70,000 a year, it can be a struggle to afford the monthly mortgage in Raleigh or Durham. Against corporations with a lot of cash on hand, like Zillow or Opendoor, “individual families don’t have a prayer” of winning a bidding war, says Samuel Gunter, executive director of the NC Housing Coalition.

“What we’re seeing in Charlotte, for instance, is a hedge fund essentially buying up swaths of single-family homes and turning them into rentals,” he says, “pulling them out of the home ownership market entirely, which is a concern.”

Supply and demand

Raleigh mayor Mary-Ann Baldwin says the solution is to increase supply. Earlier this year, the city council approved a change to the zoning code allowing the construction of duplexes, town houses, and apartments in areas where, previously, only single-family homes were allowed. 

The hope is builders will construct lower-priced town homes throughout the city, creating a gateway to home ownership, Baldwin says. Durham enacted a similar zoning change in 2019 to allow denser housing near downtown.

The cities are following the lead of other growing metropolitan areas like Minneapolis and Grand Rapids, Michigan, which each changed local laws to encourage multiuse and mixed-income developments. Oregon, in a more aggressive move, eliminated single-family zoning entirely in cities with more than 10,000 people. 

These changes have been successful in building up more housing stock but haven’t necessarily made houses more affordable. With so much demand, there’s little incentive for developers to build low-rent apartments or “entry-level” homes that cost less than $200,000, says Gunter. It’s simply not profitable. 

Get developers onboard

One solution Chapel Hill and other cities have considered is “inclusionary zoning,” which requires developers to build affordable housing as part of larger projects. Chapel Hill’s Inclusionary Housing Program, enacted in 2011, requires projects with more than five units to reserve 15 percent of those units for low-to-moderate-income households. 

Baldwin, however, doesn’t think these policies do enough to help solve housing problems. In a million-dollar inclusionary zoning development, the city might get five affordable housing units, she says. If that money was instead given directly to the construction of affordable housing, it could result in more than 50 units.

“Inclusionary zoning sounds good, but it doesn’t have the impact that other means do,” Baldwin says. “If you look at how many units Chapel Hill has built over the past 10 years with that method, it’s not many. It might be 200 units.

In fact, developers have committed to building 183 units since the town implemented the inclusionary zoning ordinance, says Emily Holt, affordable housing development officer. Holt noted that the law simply formalized an affordable housing policy the town put in place in 2000. Since then, developers have committed to building 500 affordable units, built 281, and the town has received $4.9 million from developers allocated for affordable housing, she said. 

The town could maybe do more, but the state’s ban on rent control prevents it from using inclusionary zoning for rental projects. It applies to houses only. 

“After the recession in 2008-09, the housing market shifted away from building for sale units and has focused heavily on the construction of rental projects,” Holt says, “which is likely one of the main reasons for the decrease in affordable homeownership units created in private development over the last 10 plus years.”

 Inclusionary zoning can also be voluntary, with city officials offering incentives—like allowing denser and more profitable developments—in return for affordable housing. 

By waiving some of the regulations that make projects cost-prohibitive, developers may be more willing to build affordable housing. In Austin, city council members created a program that allowed developers of affordable projects to bypass parking minimums, setback requirements, and height limits. Since the program started in 2019, more than 2,300 new affordable housing units have been planned.

Raleigh has already eliminated parking minimums downtown, and “we’re looking to expand that in other areas of the city,” Baldwin says. The city council is also seeking the advice of the Urban Land Institute on what tools are most effective in incentivizing developers to build affordable housing, according to Baldwin. A committee to advise the city on potential incentives is in the works. 

Target low-income families 

Regardless of the program, the key to success is how it’s administered, says Sidney Betancourt, a housing advocacy organizer with the National Low Income Housing Coalition. In her experience, states and cities that make the most impact on housing are those that, first, create programs targeting the most vulnerable people—those who are homeless or making extremely low incomes (at or below 30 percent of area median income). 

Raleigh does have programs aimed at helping such residents. About $28 million—35 percent of the $80 million affordable housing bond voters approved in November—is earmarked for nonprofit housing projects that will help some of Raleigh’s most vulnerable residents, Baldwin said. 

This year, $3 million went to expand Healing Transitions Men’s Campus, which helps men and women suffering from addiction, Baldwin says. Another $7 million will go to CASA King’s Ridge Apartments, a 100-unit development that includes supportive services.

Much of the focus right now, however, is on increasing the supply of housing for middle-income people like teachers, police officers, and health care workers. Chapel Hill’s inclusionary zoning program, for example, targets those who make less than 80 percent of the area median income. 

The same is true of Raleigh’s effort to increase housing supply—new units built as a result of changes to zoning laws have no income limits, so they may more often go to people who make more money and can afford to make a higher offer. 

Rhett Fussell, interim director of the Raleigh Area Land Trust, says programs targeting “missing middle” housing are just one step toward solving the affordable housing crisis. The community land trust, which started a few years ago, builds houses reserved for people making 50 to 80 percent of area median income. 

“There are [middle-income] people who don’t qualify for government subsidies or programs, but they can’t afford a market-rate house,” Fussell says. “Teachers, policemen, retail workers, it’s those folks we’re trying to serve.”

Fussell recognizes there’s still a “huge need” among people making less than 30 percent area median income, but at the same time, there are already programs in place to serve them, he says. Additionally, by helping middle-class earners buy homes, the land trust can free up lower-cost rental units for those who need them, he says.  

“[The land trust] provides another option for affordable housing in the county, an option that doesn’t exist presently,” he says. “We’re not gonna solve this problem, but we want to be part of a potential solution.”

Buy, then build

The work of the Raleigh Area Land Trust and Raleigh’s nonprofit housing projects each follow Betancourt’s second suggestion for successful programs: prioritizing permanent housing. Many affordable-housing programs are short term, requiring that units remain available to low-income people only for three to five years. After that, the units revert to unaffordable market rates. 

The expansion of Healing Transitions Men’s Campus and CASA King’s Ridge Apartments, on the other hand, creates affordable housing that will remain in place for decades. Likewise, the creation of affordable homes by community land trusts is long term. 

“[It] provides a better investment of public funds,” Fussell says. “The land trust can guarantee long-term affordability because we own it forever, we have 99-year leases on the properties. Anytime they’re sold, they can’t be sold at market rate.”

One other tool to create permanently affordable units is land acquisition, Baldwin says. About $16 million from the housing bond will go toward buying land near major highways and roads, a strategy that will put the city council in control of any future development in those areas. 

“When you own the property … you can be the one to say, ‘We want affordable housing here.’ If we can develop along transit lines, that means we’re providing even more affordable housing, because people won’t need to own a car, they can take public transportation.”

Next steps 

With the help of the affordable housing bond, Raleigh aims to build 5,700 new affordable housing units by 2026, open to people making from 30 percent to 80 percent of the area median income. Despite officials’ work to increase housing density and supply in the past two years, however, they are still lagging behind. As of 2019, Raleigh had a deficit of more than 28,000 affordable rental homes, according to the National Low Income Housing Coalition. 

Baldwin admits Raleigh is playing catch-up, “like the whole country is,” she says. “I don’t think people understood the implications of not wanting to build denser housing. I’ve always told people we’re not going to buy our way out of this. We recognize that we have to build more.” 

Much of the delay was due to infighting among the Raleigh City Council. Until 2019, when a new majority was voted into office, most city council members opposed new development, criticizing the construction of skyscrapers and big apartment buildings they said destroyed the character of the city. Criticisms were also levied at large projects for not including enough investment in affordable housing. 

Although cities like Raleigh and Durham are now taking action—led by a new corps of officials who argue increased development decreases prices—affordable housing programs throughout the state are scattered and relatively small-scale. 

Ultimately, the answer may be statewide change. When in power, local officials can make changes that have a significant effect on the affordable housing crisis. These changes, however, are not always lasting. As soon as the next cohort of city council members is elected, policies can be reversed. 

Some solutions that have proven effective elsewhere include state-imposed penalties for cities that don’t allow enough housing production (those that limit development too strictly), and a statewide ban on income discrimination (which would prevent landlords from denying rental applications if a renter was dependent on social security, for example). 

Another big policy tool is the state housing trust fund. Some counties, like Wake, are already putting aside money for the preservation and production of affordable housing. Likewise, Asheville and Charlotte established housing trust funds in the early 2000s that provide financing to developers that build affordable housing. A state housing trust fund would expand these initiatives to work across North Carolina, tackling the affordable housing problem at scale. 

Still, Betancourt says, “no state has the resources to end homelessness without significant federal commitment for established, proven solutions.

“There are lots of things states can do to move the needle, but nobody is getting it done. Federal investment in affordable homes is the best solution because that is the only type of intervention with the scale of resources necessary to address homelessness.”