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Forever Home, Durham improves housing quality and affordability for renters and homeowners citywide. The program serves a range of individuals and families: those experiencing homelessness, renters, first-time homebuyers, and current homeowners. Too many renters and homeowners in the City of Durham are living in deteriorated conditions and unable to afford decent housing, and tragically, many have no housing at all. All of Durham is in this together. Forever Home, Durham will have a significant impact on housing affordability – and more. Catalytic public investments such as this program bring partners together, creating opportunities in the private sector, attracting funds and creating jobs, and accomplishing more than any single entity or program could do alone. The communal desire for a better Durham propels this vision. New issues will surely arise over the course of the multi-year Forever Home, Durham program, and each member of the community can play a role in understanding the larger vision and how the success of the program is in everyone’s best interest.
Forever Home, Durham will have a significant impact on housing affordability in Durham. The program expects to create and preserve 2,400 affordable rental homes, create 400 homeownership opportunities, house 1,700 residents experiencing homelessness and offer services and financial assistance to stabilize over 3,000 renters and owners in their current homes. Even with this investment, there is much more work to be done to address the large scale, complex challenges related to affordable housing in our city. According to the U.S. Department of Housing and Urban Development, there are over 12,000 renter households in Durham – most of them very low income – paying more than 50% of their income for housing. Addressing their needs, as well as the needs of low income homeowners and homebuyers and residents experiencing homelessness, requires a multiprong strategy. In addition to a continued commitment to housing security and affordability, there must also be a focus on the big picture, including racial and ethnic inequalities, economic development and creation of quality jobs. Forever Home, Durham is just one piece of the puzzle.
Yes, in addition to supporting the development of affordable housing units, the City also plays an important role in providing services to low-income residents. The City of Durham serves as the coordinator for Durham’s homelessness system and provides funding for a range of emergency shelter and homeless housing programs. In addition, the City works with community-based partners to offer repair and rehabilitation programs for low-income, elderly, and disabled homeowners, down payment assistance for income-qualified homebuyers, and legal assistance for low-income renters facing evictions. These outcomes are tracked in the homeless assistance, home ownership, and neighborhood stabilization categories, and will also contribute to economic development.
Partnerships are critical to the outcomes of this program, and the City works with a variety of affordable housing developers to achieve these goals, including the Durham Housing Authority (DHA), nonprofits, and for-profit developers as well a range of community-based organizations. The City also works with other housing funders, including public-sector agencies like the U.S. Department of Housing and Urban Development (HUD), banks, credit unions, and nonprofit affordable housing lenders. Proportionally, the largest investment from the $160 million program is in multifamily rentals, which will achieve the new construction and preservation outcomes as well as contribute to economic development. These are visible outcomes with multi-step timelines, and the communications will show the steps – for example RFPs issued and contracts signed – that are indicators on the paths to completion.
The Forever Home, Durham investment significantly preserves and increases the quality and quantity of the City’s affordable housing stock and focuses on providing housing to low income Durham residents. City funding for affordable housing bridges the gap between the cost of development and the funding that can be raised through private debt and equity financing. This City gap financing is critical to making affordable housing construction and preservation projects feasible. The City’s $160 million investment is expected to spur $443 million in private funding, creating a total $603 million investment in Durham’s future. Notably, the program includes $130 million in contracting opportunities for minority and women-owned firms. Businesses and investments that are expected to arise alongside of, and because of, the $603 million total investment will support jobs, providing opportunities for residents to earn income and live in decent, affordable housing for many years to come.
The City is making real progress on the goals for housing and jobs through partnerships. FY2021 spending commitments are underway and progress can be seen in outcomes, particularly for direct services to low-income residents and in homeless services. Progress on longer-term housing construction outcomes is seen in key indicators, such as RFPs issued and contracts signed, in which partners are accountable to specific goals. The City of Durham does not develop affordable housing directly; it uses local and federal funds to fill gaps in a developer’s financing plan and is a differentiating factor in how an affordable housing developer attracts private capital. Both for-profit and nonprofit developers use City commitments to create financing packages for building or preserving affordable housing, thus bringing together a range of community partners to improve as much housing as possible.
DHA is a federally-funded quasi-governmental agency that owns and manages public housing, which is a form of affordable housing serving extremely low income households. DHA. It is the largest affordable housing provider in Durham, owning almost all of the housing serving extremely low-income households, as well as managing over 2,500 Housing Choice (Section 8) vouchers that serve extremely low-income households. It is the City’s largest partner providing affordable housing for residents with the lowest incomes.
DHA is an important partner for improving and expanding affordable rental housing. The public housing that DHA owns represents the majority of the affordable housing in Durham for extremely low-income households. Because of shortfalls in federal funding over decades, public housing in Durham and nationally faces enormous backlog of capital investment, leaving many public housing residents living in substandard and functionally obsolete units. To address this challenge, the Durham Housing Authority developed the DHA Downtown and Neighborhood Plan (DDNP) in partnership with community stakeholders and the City and County to guide the redevelopment of the first phase of public housing properties as mixed income communities, preserving the extremely affordable public housing and adding affordable and market rate housing. The City’s $58.9 million commitment from the $160 million Forever Home, Durham investment program is a critical piece of DHA’s public/private financing strategy involving multiple other partners. The City’s commitment is currently directed to the DHA development plans for: JJ Henderson, 519 East Main/Liberty, Oldham, Forest Hill Heights, and a significant addition of residential and mixed-use development at what is now the DHA office site.
The DHA Downtown and Neighborhood Plan lays out a 10-year strategy for nearly 50 acres in central Durham (including six DHA properties and two City-owned properties) resulting in 2,500 new units. The City’s multi-year investment in the DDNP from the Forever Home, Durham program is $58.9 million and currently allocated for DHA’s first set of projects: JJ Henderson, 519 East Main/Liberty, Oldham, Forest Hill Heights, and a significant addition of residential and mixed-use development at the DHA office site and County Criminal Justice Center.
All DHA residents who remain in good standing have a right to return to a redevelopment unit that meets their needs. If a resident needs to be relocated during construction, DHA will pay for all relocation costs.
The Forever Home, Durham program was developed based on analysis of data about housing need in Durham and consultations with elected officials, affordable housing developers, homeless service providers, and community residents.
The City is committed to implementing all of the activities laid out in the Forever Home, Durham program. As part of Durham’s annual budget cycle, the City determines the activities to be carried out in the coming year based on an analysis of funding availability, organizational capacity and community needs. As conditions evolve, the allocation of funds and services will be directed as needed to provide the best possible outcomes over time.
Forever Home, Durham and its investments in affordable housing and housing-related assistance is part of City’s overall commitment to serving low-to-moderate income households and communities. The City actively supports other vital initiatives including job training, business assistance, recreation programs and infrastructure improvements. The goal is to have a measurable, positive impact both in the near term and over time.
The City will be producing spending reports on a quarterly basis.
The impact of the COVID-19 pandemic on both CDD and external partners, including the need to deploy federal emergency funding with short spending timelines, affected the implementation of the Forever Home, Durham program. COVID response included funds for emergency rental assistance, developing and supporting non-congregate housing options and service delivery for residents experiencing homelessness, and operating funding for nonprofit housing partners to preserve essential affordable housing development capacity. Progress continued on Forever Home, Durham goals during this period and CDD has adjusted the timeline for implementation by a year, through FY25.
Housing Units: All units associated with City-funded contracts executed on or after July 1, 2019, which is the beginning of the first City fiscal year of the Forever Home, Durham program, count toward the goals. For construction projects, final funding commitments will be made no later than FY25, with construction completion occurring in some cases after FY25. Services: All services delivered on or after July 1, 2019 count toward the goals. Services include programs such as eviction diversion, property tax assistance, minor repair and down payment assistance, and the goals will be achieved by the end of FY25.
The City and its partners had contracts for affordable housing activities underway prior to the Forever Home, Durham program start date of July 1, 2019; these are critical (and celebrated) but do not count toward the Forever Home, Durham program goals. Additionally, activities and funding associated with COVID-19 response and a newly launched HUD-funded lead remediation program are requiring significant CDD attention and staff capacity, but do not count toward the goals.
The tax rate increase for City property owners that will repay the bonds: The timing and amount of tax rate increases for Affordable Housing Bond debt service will be determined year to year by City Council. The increase was not implemented by the City in FY2020. At this time, City Council budget guidelines indicate that the property tax rate increase will be 1.38 cents per $100 of assessed property value. The final amount will be determined during the FY22 budget process. The method by which the City commits the funds: 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.
Based on economic models of housing development, Forever Home, Durham investments will support nearly 3,000 jobs as a result of construction, operations, and resident spending over the life of the housing created. The program will also create $130 million in contracting opportunities for minority and women-owned enterprises (MWBEs).