If affordable housing’s a game, Raleigh is losing.
Every year, the city loses far more affordable units than it can replace; a 2016 study found that Raleigh needs to add another thirty-two thousand to keep up. Home values that have doubled over the last decade have turned the housing market into a pressure cooker. Meanwhile, gentrification runs wild in Southeast Raleigh, with historically black neighborhoods being devoured by white buyers building luxurious homes on tiny lots, as The New York Times recently noted.
In Durham, which is facing similar issues, Mayor Steve Schewel has proposed a $95 million housing bond, the largest ever in North Carolina—further fueling perceptions that Raleigh isn’t doing enough. With an election looming and affordable housing topping the list of voters’ concerns, the Raleigh City Council is under pressure to do something meaningful to address this burgeoning crisis.
But it’s not clear what that something will be.
The council will hear a presentation from staff Tuesday—after the INDY goes to print—that includes options for what an affordable housing bond referendum might look like. To get the bond on the October ballot, the council needs to make a decision by June 18, according to housing and neighborhood director Larry Jarvis.
To match Durham’s $95 million bond, Raleigh would need to raise its property tax rate—currently 43.82 cents per $100 of assessed value—by 1.25 cents, or about $25 a year for a $200,000 home.
Complicating matters, on Monday night Wake County’s manager recommended that the Board of Commissioners increase property taxes by 10 percent, mostly to account for $1 billion in school construction, parks, and Wake Tech bonds voters passed last year, but also to bump school funding by $36 million and county operating expenses by slightly less than that. If commissioners approve the manager’s recommendation, the owner of a $200,000 property in Wake County will add $128 to their tax bill.
For Raleigh homeowners, these hikes would be cumulative.
Jarvis wouldn’t say how big a bond the staff would recommend, though he plans to give the council three options. The money could be used in several ways, including building new affordable rental units, down payment assistance for first-time buyers, and rehabbing properties in low-income neighborhoods.
Ideally, Jarvis says, a $100 million bond could produce about three thousand units, though that depends on the kind of tax credits used for specific projects. Even that scenario, though, would only begin to put a dent in the problem.
“We shouldn’t be looking at just this one tool,” Jarvis says. “It really is, across the board, what can we do to increase all housing types, housing choices?”
A majority on the council, however, has seemed reluctant to increase density in neighborhoods, which advocates say would increase the supply of housing and thus help keep prices in check. Instead, the majority is looking to voluntary inclusionary zoning—in other words, asking developers to include affordable units in projects for which they’re seeking more intense zonings—as a way to address the problem.
Another complication is the timing of the bond, Jarvis says. A bond this year would be the only referendum on the ballot. But next year, Raleigh voters could see another school bond or a bond to fund Dix Park, or both, and they might get gun shy; then again, a presidential election draws more people to the polls, likely giving the bonds a better chance of passing.
Council members Russ Stephenson and Stef Mendell say they want a bond on the ballot this year for somewhere between $50 million and $100 million. Mendell says she hopes the council can be “bold and ambitious,” while remaining sensitive to the city’s increasing tax burden.
“While we’re trying to build five hundred to six hundred [affordable units] a year, we’re losing about a thousand a year,” Mendell says. “The hole keeps getting bigger, and we have to do as much as we can to fix that. At the same time, obviously, we have to be careful because there are a lot of people who, with gentrification, their property values have increased and their property taxes have increased.”
No one’s district has been more affected by gentrification than Corey Branch’s, who represents Southeast Raleigh. He wants a $120 million bond.
“The very people we’re trying to help and give opportunity to, we want to make sure we don’t negatively impact,” Branch says. “So it’s finding that balance.”
Contact staff writer Leigh Tauss at firstname.lastname@example.org.
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