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As Durham grows and concerns about affordability grow with it, the city will launch a $10 million affordable housing loan fund this summer.
In the works for about a year, the loan fund will include a $3.5 million investment from the city, $2 million of which is in the $10 million roll out. Initial investors are Duke University through Self-Help, N.C. Community Development Initiative and SunTrust bank.
Karen Lado, assistant director of Durham Community Development, told the City Council on Thursday that the goal is to grow the fund to $15 million to $20 million. If it reaches $20 million, that could mean 1,000 affordable homes in the city.
The homes themselves would be both rented and owned. The loan terms would be five years and below the market rate, to let borrowers carry the project while finishing development plans. Lado said loan funds will be available to nonprofits and housing authorities along with for-profits that are working in partnership with them. Developers don’t have to have concrete plans before getting a loan.
“They may not have pinned down exactly what they are going to build,” Lado said, when they get the funds.
However, they’ll still need to have a feasible business plan and accept affordability deed restrictions. Rental units must be at 60 percent or less of the area median income, or AMI. Units for sale must be at 80 percent or less AMI. A two-person household in Durham at 60 percent of the AMI has an annual income of $32,400. For a three-person household, 80 percent AMI is $50,900 a year. The median household income in Durham is $54,093.
Willard Street Apartments
An affordable housing project already underway is Willard Street Apartments, which the city will loan $3.6 million of dedicated housing funds to construct. The project also received a 9 percent low income housing tax credit.
Willard Street Apartments will include 82 affordable housing units. It is on the same block as the Durham bus station downtown and walking distance from the Durham Bulls Athletic Park, among other downtown destinations. Willard Street’s 82 affordable housing units will be for residents earning 60 percent or less AMI. Of those, 20 will be targeted for households at 30 percent or less AMI, which means Durham Housing Authority vouchers. The project will also have retail space on the ground floor, as well as a parking garage.
Affordable housing bond
The City Council is also moving forward with putting a $95 million affordable housing bond on the November ballot.
Finance Director David Boyd told the council on Thursday that could mean a “roughly one cent tax increase in 2021.”
The city will lay out the exact taxpayer cost estimations this fall. Durham Mayor Steve Schewel said there will be community forums and more information about the bond this fall. The bond would fund the city’s five-year housing plan that includes the redevelopment of downtown Durham Housing Authority communities into mixed income, mixed use developments.
And the city will also soon approve almost half a million dollars in renovations to older apartments in Southwest Central Durham. Durham Community Land Trustees, a nonprofit, will renovate 10 apartment homes with a loan of $488,000 in HOME Investment Partnership Program funds.