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Affordable Housing Bond Status Report - March 2021
The Housing and Neighborhoods Department provided an update on bond launch preparation and the possible participation in a local affordable housing preservation fund in partnership with Wake County during the City Council afternoon work session on March 9, 2021.
The department provided an update on the bond’s five-year spending, which was first presented during the January 12, 2021 work session. Updates related to the spending plan include:
- Transit-oriented site acquisition: An interdepartmental team is assessing opportunities in proximity to four BRT corridors and opportunities for collaboration with brokerage community.
- Acquisition and preservation of existing affordable units:
- Option 1: Direct funding by City to affordable housing entities by way of RFP process.
- Option 2: Participate with Wake County in a local affordable housing acquisition/preservation fund to be managed by a fund administrator.
- Public-private partnerships: The term sheet is being finalized for $3 million loan for Healing Transitions. The department will utilize $7 million for permanent supportive housing options for the chronically homeless or families living in hotels, with CASA’s King's Ridge as a possible project.
- Low income housing tax credit: There is a strong pipeline of projects along the New Bern and Southern BRT corridors, as well as development interest and frequent communications with staff.
In closing, Mayor Baldwin and council members supported the participation in a local affordable housing preservation fund with Wake County and offered suggestions for the department’s communication to the public.
Background and Priorities
City Council directed the housing staff to look at two affordable housing bond options for the November 2020 ballot. A 24-person Affordable Housing Bond Advisory Committee was formed to review the bond options, seek public input, and make a recommendation to City Council on a preferred bond package.
City Council provided guidance on the bond priorities:
- Provide generally equal geographic distribution with project investments
- Provide a range of housing types and income levels in coordination with Wake County
- Include new units and rehabilitated units where financially viable
- Seek innovative development partnerships
- Seek projects and acquisition opportunities near planned transit routes like Bus Rapid Transit (BRT)
Housing staff presented the council with two housing bond options in January 2020. Bond elements included:
- Transit-oriented acquisition to support affordable housing
- Public-private partnerships
- Low-income housing tax credit gap financing
- Homeowner rehabilitation
- Down payment assistance
The bond referendum was included on the November 2020 ballot. With the highest approval in bond history, 72 percent of Raleigh residents voted in favor of the bond.
The bond supplements local and federal funding the City is awarded annually. Each year, the City receives entitlement dollars awarded U.S. Department of Housing and Urban Development (HUD) to support programming for homeowner rehab and repair, resources for first time homebuyers, down payment assistance and more.
All Local Funding Sources for Affordable Housing
The current bond is just one of the ways the City is addressing the need for affordable housing. In addition to the bond, federal, local, and emergency CARES Act funding will be utilized over the next five years. The chart below includes an estimate of the total combined funding the City is dedicating toward affordable housing and services for families with low-to-moderate incomes.
| Source | Amount |
|---|---|
| Federal Funds | $18.6 million |
| General Funds | $33.8 million |
| Affordable Housing Bond | $80 million |
| Community Development Block Grants | $1.8 million |
| CARES Act Funds | $9 million |
| TOTAL | $143 million |
What Income Levels will Qualify for Affordable Housing?
The affordable housing bond is an investment to support and enrich the lives of residents with household incomes that are 30%, 50%, 60%, and 80% of AMI.
AMI stands for Area Median Income. It is calculated and released every year by the U.S. Department of Housing and Urban Development (HUD).
| MAXIMUM INCOME LIMITS | FAMILY OF 1 | FAMILY OF 2 | FAMILY OF 3 | FAMILY OF 4 | FAMILY OF 5 | FAMILY OF 6 | FAMILY OF 7 | FAMILY OF 8 |
|---|---|---|---|---|---|---|---|---|
| 30% | $19,800 | $22,600 | $25,450 | $28,250 | $30,500 | $32,800 | $35,050 | $37,300 |
| 50% | $32,905 | $37,650 | $42,350 | $42,350 | $47,050 | $50,850 | $54,600 | $58,350 |
| 60% | $39,540 | $45,180 | $50,820 | $56,460 | $61,020 | $65,520 | $70,020 | $74,580 |
| 80% | $52,750 | $60,250 | $67,800 | $75,300 | $81,350 | $87,350 | $93,400 | $99,400 |