Affordable Housing Investment Plan Updates

After Mayor Steve Schewel highlighted the need for more housing for Durham’s low-to-moderate income residents, City Council conducted thorough evaluation of the need and voted to move ahead with a $95 million housing bond referendum on the November 5, 2019 ballot. The City of Durham (City) voters voted overwhelmingly in support of the bond to invest in affordable housing.

The approved $95 million bond will be combined with $65 million from local and federal funding for a total of $160 million to fund the City’s Affordable Housing Bond Investment Plan. Working alongside the Durham Housing Authority, the plan aims to:

Build 1,600 new affordable housing units and preserve 800 affordable rental units.
Move 1,700 homeless individuals and households into permanent housing.
Provide 400 affordable home ownership opportunities for first-time homebuyers.
Help 3,000 low-income renters and homeowners remain in or improve their homes.

In addition, City funds are expected to leverage over $400 million in funding from other sources, and to create at least $130 million in contracting opportunities for minority and women owned business enterprises.

In order to repay the $95 million bonds, City property owners will experience a tax rate increase on the order of an additional 1.6 cents per $100 of assessed property value.

City of Durham officials have begun to make actionable progress towards the goals of the Affordable Housing Investment Plan. Below is an update of current steps being taken to make affordable housing more available in our community. We are committed to transparency in our efforts and will add new progress updates as they occur.

BUILDING AN ACCOUNTABILITY INFRASTRUCTURE

City Council will approve annual budgets for the expenditure of bond funds and existing housing funds as part of the City budget process. In addition, City Council will approve the actual expenditure of City funds on a project-by-project basis, as part of the Council’s review and approvals of proposed contracts.
To advise on the administration of the Affordable Housing Investment Plan, and guarantee transparency and accountability of the expenditure of City bond funds, City Council has appointed an Affordable Housing Implementation Committee. (Link)
To create and implement a comprehensive communications plan designed to increase transparency regarding the use of public funds and progress towards the goals defined during the bond campaign, the City has hired communication firms moss+ross and French West Vaughan.
To assist with outreach and support for minority and women owned business enterprises (MWBEs), to ensure the City meets MWBE goal (PDF) of $130 million in contracting opportunities, the process of selecting a consulting firm is currently underway.

INVESTING IN REPAIRING, CONSTRUCTING, AND DEVELOPING AFFORDABLE HOUSING

The City is leveraging the $95 million bond funds to encourage ‘brick and mortar’ projects that will create new affordable housing and re-allocating existing local and federal funds to address homelessness, eviction diversion, neighborhood stabilization, and more. The following is a list ofallocations in the 2020 fiscal year budget and a summary of other investments underway.

Homeless Programs

The City is currently providing funding for multiple activities:

Entry Point Durham (html link)- A trained team that helps people facing homelessness resolve their housing crisis by connecting them to housing resources and service providers. This program is provided by Volunteers of America (VOA) in partnership with Durham County Social Services.
- City of Durham provided $353,000 to VOA to support their work in 2020.
Emergency Shelter- The City supports Urban Ministries of Durham (link), a community of support committed to fighting homelessness and ending poverty, and Families Moving Forward (link), an organization dedicated to connecting families in crisis with adequate resources, to provide shelter to singles and families in need.
- City of Durham funded $177,000 for 2020.
Rapid Re-housing– This is short-term rental assistance designed to move people from homelessness to stable housing. Services are currently provided by Housing for New Hope (link) and Project Access (link).
- Current funding is over $350,000 for 2020.
Street Outreach– the City supports outreach to individuals and families who are unsheltered with the goal of connecting them to the appropriate services and housing. This service is provided by Housing for New Hope (link).
- There is a $1.075M contract for the duration of two and a half years.
- The City also funds case management, short term emergency rental assistance and tenant-based rental assistance (vouchers) for persons living with HIV/AIDS. This is made possible by the efforts of the Durham County Department of Social Services (link) and the Durham Housing Authority (link).

Multifamily Rentals

Durham Housing Authority (DHA) - There are three DHA-sponsored development transactions underway with details noted below:

JJ Henderson Rehab – DHA has partnered with Calfornia Commercial Investment Group (CCI) and the Florian Group to complete the rehabilitation of the existing J.J. Henderson Senior Tower. Rehabilitation is scheduled to begin in January 2021. This project will be a complete update of 177 rental homes serving extremely low income elderly households. Residents will be accommodated on site while their units are being rehabbed.
- The total project cost is $31.2M, of which the City is providing $2.9 million in gap funding. Construction will occur over 18 months.
JJ Henderson New Construction – DHA has partnered with Laurel Street Residential to construct a new Senior Tower adjacent to the existing JJ Henderson senior tower being Renovated. Eighty (80) new, affordable rental homes for elderly households will be constructed. Construction start is expected at the end of March 2021, followed by an 18-month construction period.
- Of the total estimated project costs of $16.2M, the City is providing $3 million in gap funding.
The DHA board adopted a five-phase mixed-use/mixed income master plan for the combined sites of 519 E. Main (formerly Oldham Tower) and Liberty Street Apartments. The delivery of 550 units with community amenities and office/retail in expected to cost in excess of $142M. DHA has partnered with Laurel Street Residential to serve as co-developer.
- The first phase, called the Elizabeth Street Apartments, will consist of 72 new, affordable rental homes for families and received a 9% tax credit allocation. Of the estimated $15M for this phase, the City is providing $1.1M in gap financing. Relocation is expected is occur in the first quarter of 2021, subject to HUD approval. Demolition and construction is expected to begin mid-2021.
- The City expects to provide gap financing for future phases.

Other

The City recently issued a request for proposals (RFP) to support multifamily, affordable rental projects – including both new construction and preservation. As a result of this RFP, Durham has committed close to $13M in funding to five (5) projects, which will create 230 affordable rental homes and preserve 14 existing units over the next two to three years. Future updates will be shared upon execution of the contract.

Neighborhood Stabilization

The City is in the process of making an award as a result of a RFP for minor repair of homes owned by elderly and disabled households.
- Approximately $950,000 in funding will be awarded (including $700,000 in City funds and $250,000 in County funds) to support at least 80 minor repairs over a two-year period.
Nine vacant City-owned lots are being made available to Habitat for Humanity and Durham Community Land Trustees for creation of new, affordable rentals and for-sale units. Future updates will be shared upon execution of the contracts.
The City committed $1 million in funding to Durham Community Land Trustees to rehabilitate 14 dilapidated single family and duplex homes that were privately owned to preserve as affordable rental housing. Future updates will be shared upon execution of the contract. This is the second phase of funding for this project – in prior years, the City provided $750,000 in funding to rehabilitate the first 14 homes.
The City is funding Legal Aid of NC to provide dedicated staffing offering legal assistance for households facing evictions.
- $500,000 in funding is being provided, which is expected to allow Legal Aid to help 800 households annually.
In the second half of 2021, the City expects to roll out a down payment assistance program for low income homebuyers.

COVID Relief Funding

These activities were not envisioned under the original Affordable Housing Investment Plan but are an important part of the work that the City is currently engaged in.

The City is currently providing almost $1.1M in federal emergency funding for emergency rental assistance for low income renters impacted by COVID-related job losses. This service is provided by Durham County Social Services.
The City is also deploying $2.6 million in federal emergency funding to address COVID-related impacts on homeless individuals and families.
The City has provided over $300,000 in emergency operating assistance to nonprofit affordable housing developers to help them weather the economic fallout of the COVID pandemic.