Wednesday, April 17, 2024

NHC Commissioners to consider doling out $3M in loans for affordable housing

(Port City Daily/Alexandria Sands)

NEW HANOVER COUNTY —The first in what will be years of public investments in housing will be considered Monday.

The New Hanover County Board of Commissioners will view a proposal at their regular meeting to give a pair of developers $1.5 million loans to build 152 housing units targeted at people who make less than the median income — about $56,000 in New Hanover, according to the 2020 Census.

READ MORE: NHC commits $15M to affordable housing, ditches $50M housing bond

County staff is recommending East Carolina Community Development and Terroir Development receive the loans. A nonprofit based out of Beaufort, East Carolina has a long list of apartment developments throughout the region, including Wilmington’s Cypress Cove. 

The company’s affordable housing project is slated to have 68 units, to be located at 3120 Alex Task Dr. Though full applications from the developers were not available in the meeting agenda packet, East Coast received approval for the project from the county in May.

The project targets seniors mainly making at or below 60% median income; however, some will be available for people making even less. Seventeen of the units will be available for tenants making 30% median income and 11 will be affordable to those bringing in 50% of the median.

Terroir is based in Wilmington and the county planning board approved an affordable housing credit for its 84-unit project on Gordon Road in 2021. It includes handicap accessibility to all its facilities.

Both developers already have zoning and site plan approvals and requested 20-year, $1.5 million loans with 2% interest rates from the county. The public contributions will only cover a small part of costs, as East Carolina’s project will run roughly  $15.4 million and Terroir’s total comes in at $18.2 million. The firms have both secured loans to cover the remainder.

Each project also has been awarded state tax credits from the N.C. Housing Finance Agency.

Terroir’s development will be aimed at people earning 80% of the median income or less, and 21 of the units will be affordable to people at 30% of the median. For the lower-income units, Terroir will accept Section 8 vouchers, a program of the U.S. Department of Housing and Urban Development to assist “very low income families.” According to the N.C. Housing Finance Agency, federal tax credits are worth 9% of the qualified cost of a building.

The projects outranked four other proposals submitted as part of the county’s new workforce housing services program. In February, commissioners signed off committing a total of $15 million over the next five years to supporting affordable housing.

The move came after commissioners decided against proceeding with a $50 million bond package. The bond tested poorly through a survey conducted by UNC Greensboro and the Wilmington Chamber of Commerce, due to the tax increase associated with it.

A county and city housing survey estimates a gap of more than 23,000 housing units over the next 10 years.

Staff proposed the $15 million framework in June, and the county put together a team to rank the applications, taking into account financial feasibility, the quality of the projects based on zoning and materials and a good developer track record. Applications closed Aug. 8; requests were evaluated by the end of August.

The presentation in Monday’s agenda provides some rationale on why East Carolina and Terroir came out on top in the process. It notes Cape Fear Habitat for Humanity’s $1.5 million request scored well, but the cost-per-unit and percent of the project total too was high.

Supporting the $4.6 million, 17-unit project would have evaluated at $71,426 per unit for the county, as opposed to $22,058 per unit for East Carolina’s development and $17,857 per unit for Terroir.

The county has already provided some financial support for Habitat’s project as well. The commissioners donated four lots to the nonprofit and the project will receive American Rescue Plan Act money to the tune of $274,701. The county is also providing Habitat with $50,000 of additional grant money. 

Wilmington Area Rebuilding Ministry requested $502,000 to make “urgent” repairs to 60 homes in the area over the course of two years. The committee decided it needed more information about the period of affordability for the housing to consider funding the project. The projects getting funding recommendations each have 30-year guarantees on affordability via low-income tax credits.

Funding was not recommended for the Wilmington Realtors Foundation’s request because the project had an 80-120% median income range. The committee wrote the $250,000 unit cost “lessens the likelihood of short-term and long-term affordability for moderate income households.”

Cape Fear Collective’s application did not include a total project cost and the committee recommended strengthening the proposal’s budget, scheduling and site specifics.

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