NEW HANOVER COUNTY — New Hanover County is pledging to spend at least $15 million over the next five years to expand and enhance the stock of affordable homes. It’s not the $50-million housing bond originally envisioned, but county leaders expressed confidence it could be just as valuable.
Their plan is to leverage the $15 million to entice the private sector and nonprofit community to join in and exceed a $50-million impact in a shorter window of time than a bond may take.
In a joint meeting between the city and county Thursday, commissioner chair Julia Olson-Boseman began discussions by clarifying a housing bond was no longer on the table.
“It’s clear that affordable housing is a priority for all of us,” the chair started off saying. “We want families to have a safe, affordable home to lay their heads on at night. For children to have stability that comes with affordable housing, and for every resident to be able to live in the same county where they work. But I do not feel that a countywide housing bond is the route we need to take at this time.”
She added that there was no “community appetite” for a property tax increase to fund affordable housing. Two surveys, one conducted by UNCG and the other by Wilmington Chamber of Commerce, didn’t produce promising results; the majority of respondents opposed the necessary, accompanying tax hike. Plus, only one county in North Carolina — Orange County — has successfully passed a housing bond, and that was for $5 million.
The vote by commissioners to instead spend a minimum of $3 million annually on affordable housing was approved unanimously. Commissioner Rob Zapple introduced the five-year plan, announcing it already had the backing of the majority of county commissioners and the county manager ahead of the joint meeting. The plan would take effect July 1, the start of the next budget year.
The county is also forming a new department, focused solely on affordable housing, and filling up to four positions on the team. Those hires will be tasked with identifying evidence-based programs and reporting results.
In the coming months, county staff is developing a framework for how to strategically dole out the money, similar to the recently approved $39-million Port City United action plan, which as well included the formation of a new division.
This money is on top of the $2 million the city already puts forth each year toward affordable housing. (Though, the bond would have been in addition to this yearly $2 million.)
“Between the city and the county’s commitment, with $2 million minimum on this end and three on that end, in five years, is $25 million,” Mayor Bill Saffo calculated. “Can we find another $25 million from within the community?”
On multiple occasions, leaders referenced successful examples of affordable housing initiatives to partner with, such as Cape Fear Collective’s recent $10.6-million investment to buy a portfolio of homes. The nonprofit is preserving the 71 units as affordable housing.
Also, the success of the Starway apartments repeatedly came up. Together, the county and city awarded $5.3 million in gap financing to the redevelopment project, which, once complete, will offer 278 units off Carolina Beach Road to residents earning 60% of the area’s median income, from first responders to teachers.
This is the first time the county has committed consistent funding to affordable housing to this extent. Over the past 30 months, the county has invested around $35 million, in part with Covid-19 relief funds. It’s aided nonprofits, provided emergency rental and mortgage assistance and donated land to Habitat for Humanity.
“May have been a little late to the game, but we’re in this,” commissioner vice-chair Deb Hays said.
The county’s minimum $15-million pledge will come out of existing revenues, either from natural growth or interest from the $350-million savings from the sale of New Hanover Regional Medical Center to Novant Health. Not only does the county believe it can leverage additional money from the building community and philanthropic organizations, it’s also hopeful the community endowment — formed to oversee the remaining $1.25 billion from the hospital sale — will pitch in.
Unconvinced, councilmember Charlie Rivenbark said, “Hopefully. There’s the word. We can’t build policy on hope.”
While some councilmembers applauded the commissioners for their dedication — Luke Waddell commended the county for not raising taxes, and Neil Anderson acknowledged it was a big step, considering the untouched land largely exists in the unincorporated area — Rivenbark and Kevin Spears weren’t as impressed with the approved plan. It was still short $35 million of what they’d believed was on the horizon. The board of commissioners would have needed to approve placing the housing bond on the ballot at least six months ahead of the November 2022 election.
Spears told the rest of the officials: “I think we had a good plan. We should have allowed the citizens to make a decision about what we would do, and we robbed them of that, and here we are with this.”
“It seems like we’re back to square one,” Rivenbark said. “It seems almost as though we never had that big, wonderful meeting at your government complex. God, it seems like a year ago … Big mouth me, I went out and told people, I said, ‘We’re going to really get something done this time.’ And here we are in the winter of 2022, and we’re still playing ‘what if’ and ‘maybe’ and ‘hopefully.’”
In a May meeting, stakeholders with expertise in housing, from developers to nonprofit leaders, voiced their opinions on solutions to the housing crisis. At that time, the bond was presented with a goal to add 1,333 affordable units to the region.
Zapple defended the latest plan, saying input from those participants was still being taken into consideration as the $15-million framework is fleshed out.
“It is not hope,” Zapple said. “It is real. It’s money that’s here now, and that is a game-changer and puts us squarely into it.”
County manager Chris Coudriet explained with a housing bond, the debt would be sold over five to seven years. He indicated there was a misconception the $50 million would arrive on “day one,” if voters passed a bond; in reality, it would take much longer to obtain the funding.
There are a few different pillars to the rough-draft plan for the $15 million. For starters, it will focus on creating affordable housing, potentially by funding low-income housing tax credit projects, similar to Starway.
“It’s going to boil down to some sort of incentive that will attract the building community so that they realize that they can be a major player in this can,” Zapple said, “because they need to be and they can make money along with it. Then we’ll have a sustainable program, and identifying that incentive, of what that is — whether it’s $15,000 or $20,000 or $25,000 per unit — that’s when we’ll get traction on this problem.”
The money can also bankroll infrastructure improvements, like what’s been done for Eden Village; the county and city each deployed $250,000 in Covid-19 relief money to extend water and sewer to the site of the future tiny home community for the chronically homeless.
Rivenbark warned there would be pushback when it came to approving affordable housing developments down the line: “You’re going to have to have some political will to look past that.”
Other ideas are to use the capital to preserve the existing housing stock by rehabilitating units or putting money toward emergency repairs or owner-occupied rehab programs, from restoring roofs to fixing air conditioning to paint jobs. There would also be down payment assistance and tenant-based rental assistance programs.
“A $300-a-month subsidy, that does make a big difference for folks,” senior planner Rachel LaCoe said.
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