What is an Affordable Housing Bond? Current Bond Past Bonds
What is an Affordable Housing Bond?
An affordable housing bond is a tool used by municipalities to raise capital to create and preserve affordable housing opportunities.
- Proceeds generated from a bond can be loaned to nonprofit and for-profit real estate developers, who will use the money to create and preserve affordable housing opportunities for citizens with limited incomes and limited housing options.
- Affordable Housing bonds are managed at the local level but must be approved by voters as a ballot initiative.
- Affordable Housing bonds that are approved by voters may increase local real estate property taxes for residents
City Council directed the housing staff to look at two affordable housing bond options for the November 2020 ballot. The City formed an Affordable Housing Bond Advisory Committee on January 21, 2020 to identify options and gather public input for a Fall 2020 bond referendum.
Raleigh residents gave overwhelming support, with 72 percent of those voting in favor of the bond.
- 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)
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.
In the past the City asked voters to support housing that is affordable through bonds. In response, voters approved bond referendums in 2000, 2005, and 2011.
The City has used past bond money to support homebuyer assistance, construction and preservation of affordable rental units, neighborhood revitalization and owner-occupied home rehabilitation.