Affordable Housing

Affordable housing is an ongoing need for Raleigh residents. Here are a few updates on what the City of Raleigh is up to on this issue. Note this is not a comprehensive list.

1. We dedicated $20 million of the remaining $23.7 million in federal American Rescue Plan Act (ARPA) funds for affordable housing.
2. The City of Raleigh offers water, wastewater and sewer utility relief for economically distressed residents. I am staying in touch with Wake County Commissioners to explore additional support for those in need.
3. I would like to see financial assistance for displaced renters – Council would need to take action on relocation support to make it so.
4. We contribute funds to Campbell Law School and Legal Aid of North Carolina to provide tenant eviction protection services.
5. Permit reviews are expedited for affordable housing projects, speeding up the process of construction.
6. Additional incentives are needed to ensure missing middle housing produces affordable housing. We will examine this topic at our March 21^st City Council meeting.

Background: At the January 3rd Council Meeting, I presented ideas for consideration to inform future affordable housing studies, plans and policies adopted by the City. The list included proposals for possible implementation in the short- (0-12 months), medium- (1-2 years), and long-term (3-10 years).

The six items above address proposals for consideration in the short-term. Below are my original recommendations with questions, and responses from City staff.

1. We ought to designate a significant percentage of remaining ARPA funds for affordable housing. What ARPA funds do we have left? How much will go to affordable housing?

The City has approximately $23.7 million of ARPA funds remaining. Of this total, $20 million has been identified for use to support affordable housing initiatives. For example for how these funds have been spent in the past, City Council previously approved the use of $8 million in ARPA funds to acquire an extended stay facility located at 2800 Brentwood Rd. The City has entered into an agreement with a local non-profit organization to manage the facility and provide support services. Over the long-term, as units become vacant, some percentage of the rooms will be used to provide permanent supportive housing or to address other affordable housing needs.

2. Utility relief for long-term, low-income homeowners – There have been calls for property tax relief but I believe that utility relief assistance may be more viable in the near term. What options do we have in this regard?

Raleigh Water, in partnership with the Wake County Human Services Department, administers the Utility Customer Assistance Program (UCAP) which helps economically distressed water and sewer utility customers manage their utility bills. Qualified customers are eligible for up to $240 per fiscal year and funds are applied directly to their utility account. In addition, the City also promotes use of the federal Low-Income Household Water 2 Assistance Program which helps low-income households afford water and wastewater services. The program offers one-time payments made directly to qualifying households’ utility company. In addition, under funding made available through the Federal CARES Act, the City contracted with local non-profit organizations to administer programs assisting both at-risk renters and homeowners with utility assistance as an eligible activity. The amount of funding requested by eligible households for utility assistance via these programs was limited.

3. Renters displaced due to re-development would benefit from relocation assistance. Seattle has a program like this. What could it look like in Raleigh?

The Seattle program provides for a relocation payment to tenants being displaced as a result of rent increases, redevelopment, or ending rent/income restrictions in the amount of $4,486 per household. Half of that amount is paid by the City of Seattle with the property owner paying the other half as required by a local ordinance. The Seattle program is authorized by specific enabling authority granted by the Washington State Legislature. No equivalent legislation exists within the State of North Carolina. Staff have determined that the City of Raleigh does not have the authority to replicate the Seattle program in its entirety in that the City does not have the authority to compel private property owners to make payments to tenants being displaced as part of redevelopment activity. However, the City may consider establishing a program which could provide financial assistance to certain low-income households that meet qualifying criteria to be eligible for City-funded housing assistance programs and an eligible source of funding is identified for such an appropriation. Should the Council wish to further evaluate establishing such a program, considerations would have to made for the additional staff and funding resources that would be required to operationalize it. As currently configured, the program appears to be staff-intensive which would require an expansion of current staff resources. Additionally, the program would require Council to identify an eligible, recurring funding course from which such assistance payments could be made. In light of the City’s inability to issue mandates to private developers to require relocation assistance payments, City staff, including representatives from the City Attorney’s Office, have met with zoning applicants to discuss possible voluntary measures that might be offered as conditions to help mitigate impacts on tenants when a rezoning likely leading to redevelopment is being sought. From those discussions, it has been suggested that applicants may offer conditions addressing tenant notice and moving expenses at the time of the rezoning. Proposed language is still being vetted.

4. Tenant protection services are critical to keeping people in their homes. We have a program like this with Campbell Law School. How is this going? Do we have enough capacity here?

The program at Campbell Law School is going well. During the fall 2022 semester, full eviction prevention services were provided to 35 households which contained a total of 94 people. These services were provided by the eight students enrolled in the Housing Justice course. Eight is the maximum number of students the course can currently accommodate and Campbell reports that the students were operating at maximum capacity in the clinic. For the current semester, six students are enrolled. Campbell has indicated a desire to increase the maximum number of students, perhaps as early as the Fall of 2023. In addition to the program at Campbell, the City has a long-standing relationship with Legal Aid of North Carolina which also provides tenant protection and related services.

5. I appreciate that permit review is expedited for affordable housing projects – exactly how does this work? Are there opportunities to waive fees?

The City does expedite reviews for affordable housing projects currently, through making “in person” (or “express”) reviews with plan reviewers possible on a shorter timeframe than the City’s published timelines. This results in a 4 to 6 week time savings for applicants. While fees cannot be waived by the City for affordable housing projects under North Carolina law, the City Council has the authority to make appropriations in support of affordable housing developments, which it already does in the form of “soft” gap financing for tax credit and other affordable rental projects that can, in part, offset these fees.

6. We ought to examine affordable housing requirements for the highest densities allowed via missing middle – Are there opportunities to add affordable housing requirements or bonuses to the missing middle text changes?

Mandatory affordable housing requirements are prohibited by NC law, but incentives and bonuses are permissible. During the City’s ongoing engagement with the community regarding the “Missing Middle” provisions of the Unified Development Ordinance (UDO), many commentators have suggested the need to investigate an incentive-based model for some missing middle housing types. Staff plans to conduct evaluation on this specific topic and report to Council in more detail at the planned March 21st Council Work Session. In short, it is very difficult to calibrate the incentive to produce the desired outcome (affordable housing in this case) with a “one-size-fits-all” standard (e.g., up to 50 market units if 20% of new units are affordable to households at or below 60% of AMI), given the wide variation in land prices across Raleigh. Staff has “piloted” such an approach in the missing middle provisions applicable to the Frequent Transit Overlay District. As noted above, staff will certainly fully investigate the “bonus” model and provide more information on March 21^st.