Wednesday, November 29, 2023

‘Need is immediate’: Gap in housing stock grows, NHC plans year 2 of affordable housing fund

Commissioner Jonathan Barfield speaks on affordable housing Monday as the New Hanover County staff presented its framework for spending at least $3 million on affordable housing.

NEW HANOVER COUNTY — With a gap of nearly 30,000 for-sale and rental units available to residents over the next decade, local leaders are strategizing a plan to tackle improvements in affordable housing stock.

Since 2021, there has been a nearly 30% increase in housing needs, according to New Hanover County staff, who presented a framework to commissioners Monday. At the same time, the population has increased 2% since 2020 and is intended to grow by 3.9% or 9,149 people, by 2027.

READ MORE: One-third NHC residents cost-burdened by housing, more local funding needed

New Hanover commissioners adopted a strategy for the second year to provide funding for developers building projects that target people making 60% to 120% average median income — $63,926.

This year’s recommended strategy for choosing what projects to fund is similar to last year’s, prioritizing shovel-ready work, with preferences targeted at 80% AMI or below.

The New Hanover County commissioners adopted in February 2022 a five-year commitment to spend $15 million to entice the private sector and nonprofit community to develop more units.

They will spend a minimum of $3 million annually. 

Commissioner Jonthan Barfield, a realtor, noted first-time homebuyers face an average home price of $400,000. The median sale price of homes within the county has increased 63.8% since 2016, according to the county’s data.

“Inventory is still really low and the demand is great,” Barfield said. “Interest rates are rising, which makes it even more unaffordable.”

According to the county’s updated housing assessment, a review of 164 developments — including market-rate, tax credit and government subsidized — reports units 95% to 100% occupied in 2022.

Barfield recounted a trip he took as a commissioner “many years ago” to Charleston, South Carolina to review housing initiatives implemented there. He said many people at the time lived 45 to 50 minutes away from Charleston to afford their homes but worked in the city; he compared the same to what’s happening in Wilmington.

“We’ve been talking about this for a long time but not making much headway,” Barfield said. “Until now.”

He also pointed to the limited land available in New Hanover County for new builds.

“It’s important we find ways to encourage or leverage funding to help developers,” Barfield said.

In its inaugural year, two projects each earned a low-interest, 20-year $1.5-million loans to close the gaps on their affordable housing projects. The result was an additional 152 units, including 68 dedicated solely to seniors.

East Carolina Community Development partnering with New Beginnings Christian Church, just broke ground last week in Castle Hayne. Terroir Development is constructing an 84-unit complex on Gordon Road, including handicap accessibility to all its facilities.

“Based on last year’s applications, we’re placing preference on projects with the ability to create an immediate impact to residents,” senior planner Rachel LaCoe told commissioners Monday.

Six proposals were received last year; two were accepted.

Funding is capped at $1.5 million per recipient, to ensure at least two projects receive consideration each year. Commissioners can consider more than two if the funding is available.

Eligible activities for a portion of the money include construction of new units, conversion or rehab of existing housing, down payment assistance, rental assistance, and emergency repairs.

All developments must take place within county limits and must ensure the appropriate zoning in place first.

The city and county’s Workforce Housing Advocacy Committee will evaluate submitted proposals for eligibility — including when construction or redevelopment could occur, the experience of the management team involved and if subsidized units are comparable to market-rate units.

The group will consider the financial feasibility of the project, what other funding sources have been secured and if the chosen site is suitable for development including the use of quality materials.

Once the staff finalizes its request for proposals, to be released in July, an information session for interested applicants will follow. 

Recommendations for allocating the money will be presented to commissioners for consideration this fall.

Commissioner Rob Zapple inquired as to whether the county would consider a round of funding in the spring, to which LeCoe said was up to the commissioners.

Barfield chimed in, saying “the need is immediate.” He suggested letting applicants submit proposals as needed on a rolling basis, as opposed to a firm submission deadline, as it works now.

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