Wednesday, February 8, 2023

City doles out nearly $1M to support rehab of 15 affordable housing units

Driftwood apartments on Prince Place Drive will be rehabbed with a loan from the city of Wilmington. (Port City Daily/Shea Carver)

WILMINGTON — The city has approved funds that will rehab a local housing complex to provide additional space and support for the chronically homeless.

At its Nov. 15 meeting, Wilmington City Council approved an $883,609 Community Development Block Grant to renovate Driftwood, a 15-unit permanent supportive housing complex at 3820 Princess Place Drive. The site is located within a reasonable distance to shopping, businesses, major retail, medical facilities, schools and on the Wave transit line.

READ MORE: Local nonprofits join forces to save affordable housing complex, provide services for underserved populations

The Community Development Block Grant has been available from the city since 1975. The federal funds come from the U.S. Department of Housing and Urban Development and are disbursed by the city’s community development department.

The city reported the “funds can be used with great flexibility to provide decent housing, a suitable living environment, and expand economic opportunities principally for persons of low and moderate income.”

Additional funds were infused into the CDBG balance during the pandemic to assist the disparities placed on low-income residents. The first additional portion of $612,032 was allocated in fiscal year 2020. The entire second payment of $883,609 is being distributed to the Driftwood project. 

According to a city and county housing assessment from 2021, the move will help fill a reported gap of 320 units of rentals serving individuals with less than 30% average median income. The current AMI for New Hanover County is about $56,000.

Driftwood was constructed 15 years ago as a housing complex for the chronically homeless, and those suffering from disabilities including mental illness. When the development was put up for sale in 2020, Cape Fear Collective purchased the property for $1.2 million to ensure it was not lost to market-rate rentals.

The 20-year forgivable loan signed off on by the city will cover necessary interior and exterior repairs for the building. Of the funds, $698,593 will pay for kitchen and bathroom upgrades, electrical repairs, new flooring, paint, new appliances, new HVAC and a new roof. Outside windows, doors and walls also will be fixed, and landscaping and parking will be updated.

Renovations are estimated at roughly $29,000 per unit. 

The remaining $185,016 will be used for homelessness services and rehousing,offered by Good Shepherd. The nonprofit will provide an on-staff social worker and be the point of contact for tenants.

The terms of the city loan require the property to remain affordable housing for 20 years. If sold, the money must be paid back in full at 0% interest.

Cape Fear Collective has also agreed to infuse an additional $100,000 into operating reserves to cover any loss of rent, unable to be paid for by residents. Monthly payments of $799, including utilities, are estimated based on state guidelines; individuals will only be required to owe 30% of their income. However, residents will not be turned away if they have no source of income.

Fifteen units will be rented, with former Driftwood tenants — the majority of whom were forced out in early 2021 when the former property owner put the complex up for sale — will receive priority when units reopen.

Additional tenants will be referred through the Tri-County Homelessness Interagency Council’s Continuum of Care entry process to screen for eligibility.

The property will be operated by Norco Management and is expected to open by early 2023.


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