Tuesday, May 24, 2022

New Hanover aims to buy 22 FEMA trailers to be turned over to private owner for ‘affordable housing’ — but only for 12 months

The trailers are located at Colonial Village Trailer Park in Wilmington. (Port City Daily/Michael Praats)

NEW HANOVER COUNTY — When Hurricane Florence hit the region in 2018 it had devastating impacts on homes all around the county and highlighted the dire need for affordable housing in the area. In response to the massive loss in New Hanover County, the federal government stepped in to help provide for those who needed to rebuild by providing ‘FEMA Trailers.’

These temporary homes provide emergency shelter to those left to rebuild; they are not typically meant to be replacement homes. But New Hanover County is proposing a plan to buy nearly two dozen of these units to help provide ‘affordable workforce housing’ — but only for one year.

At the upcoming Board of County Commissioners meeting an item has been placed on the board’s consent agenda — that is, the part of the meeting that can be approved without actual discussion of its content, to spend $391,000 for 22 units, which will then be resold to a private property owner.

The purpose? To continue providing affordable workforce housing for residents of New Hanover County — but questions remain.

Since the County Commissioners have done away with agenda briefing meetings (although not unanimously), there will likely be no public discussion on the request unless a board member asks to remove it from the consent agenda for further consideration.

Following Florence, there are just 22 FEMA units left in New Hanover County which would typically be removed by the federal agency. They are all apparently located at one mobile home park in Wilmington, Colonial Village Trailer Park located off Park Avenue in Wilmington

However, in an effort to preserve affordable housing the county is proposing they purchase the trailers — and then sell them to a mobile home property owner, allowing the county to break even. The owner was not named in the agenda materials, but the county later identified as Alan Middleton.

Middleton will get the 22 trailers for the same price the county pays, $391,000 — a great deal considering what taxpayers actually spend on these trailers when they are new.

According to Voice of America (VOA), the FEMA trailers can cost taxpayers $150,000 per unit, which means if the property owner of the land where the trailers currently sit were to pay retail price, the actual cost would be closer to $3.3 million for new trailers.

“The federal government typically spends up to $150,000 apiece — not counting utilities, maintenance or labor — on the trailers it leases to disaster victims, then auctions them at cut-rate prices after 18 months of use or the first sign of minor damage, The Associated Press has learned,” according to VOA.

The only requirement for the property owner, who was identified as Alan Middleton after requesting that information from the county? Maintain the units as low-income housing for 12 months.

After that, Middleton could raise rents to market rates.

With a price tag of just $17,772 per unit, this property owner could charge just $740 a month for two years on every unit (within the range considered ‘affordable’ for the county) and break even on the purchase. If the owner charged more for larger units, or raised the rates sooner after the 12-month period, it is possible they could come out ahead even sooner.

Interestingly, in general, when government property is to be sold, the government has to place that property up for public bids. Outright sales are permitted typically only to nonprofit companies.

However, the county is citing a state statute that allows the sale of property for affordable housing by governments without the red tape, General Statute 153A-378. [Editor’s note: The county clarified that while the statute was technically repealed, it is being rewritten under a new section of the statute.]

There does not appear to be anything preventing the county from stipulating that these units remain affordable past 12 months except the county’s own contract.

New Hanover County issued the following statement on Thursday afternoon regarding the agenda item:

“These mobile home units have served residents whose housing was damaged from Hurricane Florence while repairs were made, and moving forward, will help address the housing gap for those who have remained displaced. New Hanover County began discussions with FEMA last year about opportunities to keep housing available after Direct Housing ends; and on May 7, 2020, Mr. Middleton notified the county that FEMA was cancelling the PAD leases (a pad lease is where the mobile home unit sits at the trailer park) effective June 7, 2020. That means on June 7, FEMA would be removing these mobile home units and relocating them to Kinston. So this purchase process keeps the trailers in New Hanover County, avoiding the removal and re-issuance that would take time and further displace residents through the transition. This is one of many strategies to address the housing gap in the community and provide a solution through long-term recovery from Hurricane Florence.”

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