Today's agenda: an epic City Council meeting that includes the dog poop ordinance
Defining "affordable" in Durham: If you have to ask, well ...

Sept. 10: Live blogging today's Durham City Council meeting re: affordable housing

Update at 3:48: The affordable housing discussion just ended. It's now on Light Rail. I'm starting a new blog post about this portion. Actually, GoTriangle is going over a Powerpoint presentation, a very basic primer, that is not online. It's probably better that I read it, then do a wrap-up rather than a live blog.

1:23 County Commissioner Ellen Reckhow, a member of the Public Safety Task Force of the Mayor's Poverty Reduction Initiative, is speaking now. The initiative focuses on Census Tract 10.01,  where poverty is most concentrated in Durham.

Among the Task Force recommendations:

1. Poverty simulation for police officers

2. Encourage officers to live in the area with assistance to buy or rent housing. Atlanta and Columbia, S.C. have such programs. Officers participating receive an end-of-year bonus and low-interest loans.

3. Establishing a curriculum with Holton School and Durham Tech for public safety careers, which would preclude the need to recruit officers from out of town.

4. A new DPD position, a community liaison, to help mediate relationships between the neighborhood and police in this area.

5. More officers walking a beat rather than just responding to 9-1-1 calls. This could require more staffing.

We're talking taxes now, which has been pretty dry, until this:

The 751 South developers have not paid their property taxes in full; they're on a payment plan.

2 p.m. We're now on the big agenda item of the day: affordable housing

Mayor Bill Bell just asked people to lower their signs or remove them from the room.

Kevin Dick, director of Economic and Workforce Development is leading a presentation, 
"Durham Station Disposition and Development Alternatives"

"We are recommending a mixed-use, transit-oriented development. It does NOT preclude affordable housing.  [applause] but it does NOT guarantee it either. [groan]" 

"It provides the possibility for job opportunities near transit. We would have a scoring process that lends itself to affordable housing. It would provide retail and open space."

Fast facts:

2.15 acres of developable land, which was originally purchased in part using a NCDOT grant. That grant had certain conditions, including that proceeds from the city's sale would fund station improvements. The cost of those upgrades would total $1.8 million to $2 million.

Here are some details on Alternative A, the recommended proposal. It would be a public-private partnership urban development project. It would promote job and tax base growth. There is a potential challenge that there would be limited opportunity to promote affordable residential. [That's a problem.] It would take about five months for the entire sale process to happen.

Dick is now showing other examples that have been successful:

Mile High in Denver Colorado

Fruitvale Village in Oakland, transit, ground floor retail and affordable housing

Southside in Durham
Alternative B is next ...

Alternative B is conveying the land via an RFP with a deed restriction that would require mixed-income. It could eliminate transit specific improvements.

Alternative C is conveying the land via RFP with low-income deed destruction. It would promote this type of residential near transit, but could be hard to find developers willing to do it.

Alternative D, selling to the highest bidder with limited deed restrictions. Uncertain use, limited city influence on outcome, but probably high income from the sale.

Alternative, selling to the highest bidder with no deed restrictions. The same caveats as above.

Concerns, Dick says, is diversity, alignment with other policy documents, such as the Downtown Master Plan, which is due early next year. "We're also hearing that we're losing projects because there's not enough Class A office space downtown. We need to have continued viability in the Central Business District."

RFP process should be transparent, Dick says. The messaging to the development community is important. We need to make sure our process isn't geared toward one particular outcome. The scoring process, though, can reflect what we prefer.

We're now preparing for questions from the Council. There are also six people who have signed up to speak.

Eugene Brown: I'm confused about the relationship between NCDOT and the conveyance of this property. What control does NCDOT have?

Kevin Dick: Because we bought the land with an NCDOT grant, there are conditions we need to be mindful of. 

Tom Bonfield: They don't really have an interest in how it's used, but how the transaction occurs and how the property is valued, what happens to the proceeds, either direct or indirect.

Eugene Brown: If this council decides to give this land to an affordable housing developer, what do you anticipate the response of NCDOT?

City Attorney Patrick Baker: We would include them in the discussions and keep them up-to-date. I hate to make a prediction to what they might say.

Eugene Brown: If we give the property away there are no proceeds to put back into Durham Station.

Council members are waiting for the public to speak first. That's up next:

The Rev. Herbert Reynolds Davis, co-chair of Durham CAN: I represent 100s of Durham residents who are unable to afford to live downtown near the transit hub. He asks people to stand if they are here in support of affordable housing. Almost all of the room stands.
The missing piece to creating mixed-income development downtown is affordable housing. We are particularly interested downtown, and looked at the area near Durham Station because it fell short of the 15 percent goal of affordable housing [the resolution passed by the Council]. It's no secret that downtown is unaffordable for public sector workers. We're asking for working families to be able to benefit from downtown Durham and the amenities. [Lots of applause]

Bishop Clarence Laney, also member of Durham CAN: Our downtown is becoming an affordable housing desert, financially out of reach for many Durham families. We're here today to offer solutions to a problem. [He's asking for the city to allow Self-Help to get the land to apply for the 9 percent tax credit.] NCDOT has said it's an acceptable use—affordable housing. 

Wib Gulley, former mayor, he's here on behalf of the Coalition on Affordable Housing and Transit: Over the last 18 months we've talked with many people and developers about affordable housing. One thing is clear: it's very very hard to build affordable housing because of the economics. There are 2,000 units online within a half-mile of Durham Station, none of them affordable. It's hard to do. With this parcel, it is suited for affordable housing as a singular use. You can't achieve the promise of multi-use on such a small site. The site of the current police station is larger [and would be more appropriate]. His time just run out.

Kim Cameron, director of real estate for Self-Help: It will take about $40,000 a year to rent an affordable housing unit in downtown. Currently it would take $68,000 to rent any of the apartments currently within a half-mile of the station. 18 percent of downtown employees can't afford to live downtown [private sector]. 15 percent of those in public sector can't. Construction workers, bus drivers, can't afford it, either.

Our best opportunity to provide workforce housing is city- or county-owned land. Durham Station provides a prime opportunity to provide housing for those earning $14,000 to $40,000 a year. There could be 80-100 units. Self-Help supports the RFP process. However, the 150-day time precludes Self-Help's ability to apply for the tax credit program. [Deadline is much earlier.]

Dan from Self-Help on the process: We think there can be minor tweaks to the process and break the RFP into two stages. Part 1 would be getting proposals from developers. By December, there is plenty of time to do the survey, and to update the RFP from the 2007 version, get that out there in front of developers. City Council then could decide in January whether to go forward with a tax-credit proposal or to consider the other options. 

Frank Meecham of Durham Committee on the Affairs of Black People. We're here in favor of mixed-use. If commercial is part of this, it will help offset cost.

 Now Kevin Dick is back to be interrogated by Council.

Mayor Pro Temp Cora Cole-McFadden: Who gets the money from building the project? As we move forward, we need to know the track records for everybody. We need to benefit from the construction. So let's make sure it's an integral part. People, affordability and economic participation.

Mayor Bill Bell: I have pretty strong feelings about this issue of affordable housing. I made it clear at the last CAN meeting. No one should question the Council's commitment to affordable housing. We see what's happening in Northeast Central Durham, Southside. This city has consistently provided funding for affordable housing. It's about income, below the median income. What I was hearing from this proposal that someone could build 80-100 units of affordable housing.

I'm concerned in putting city's money into strictly affordable housing that is packing poor people in one area, especially when you're talking below 60 percent of the median income. I don't want another Cabrini Green. I don't want to warehouse poor folks.

If you're talking about mixed-income that's a different piece. That's what we have at Southside. This tract was not intended for solely affordable housing. You guys are making a perfect case for my rental assistance program for downtown. [People are groaning]. This would be for people 60-80 percent of median income to get them into some of the existing downtown units.

Council just hired a firm [Enterprise Community Partnerships] to study and strategize about affordable housing downtown. That's where I am. 

Councilmember Steve Schewel: Who would live in a development like this, under 60 percent of median income or less?

Dan from Self-Help: What we're getting at is definition of mixed-income. Self-Help is looking at $30,000, $40,000 income range. Bus drivers, restaurant employees, nonprofit employees. To me there is a mixed-income within a development. It's different than the Durham Housing Authority, which serves very low-income residents. The tax credit will subsidize units for only people below the 60 percent income.

Steve Schewel: Mayor, I don't agree with you about this but I understand your commitment and I know it's real. My position on this is we need affordable housing downtown for people at 60 percent of median income and below. Who we're talking about EMS personnel, young police recruits, restaurant workers. If we don't use our public land downtown for affordable housing for 60 percent or below it will be an epic failure. 

The market will build retail and Class A office space, but it won't build affordable housing. We need a pipeline of tax credit applications every year. I'm totally supportive of the DHA application for the 9 percent tax credit for Club Boulevard. I don't know how these are going to score. Perfect scores don't guarantee we'll get the tax credit.

Greensboro just got two tax credit projects. We could get two. I'm very proud of the Penny for Housing program, about $2.5 million a year. This tax credit program is three times that. We need an open and fair RFP process, but we need to get it in time to apply for the tax credit. Mixed-use, transit-oriented development will happen on the Hendricks space, on the Elkins space. [It doesn't need to happen here.]

Council member Eddie Davis: Rather than one or the other, is it possible to empower Self-Help and the DHA applications. Is it possible to put forth a project that would allow for low-income housing at the transit site, as well as doing the same kind of subsidies for the high-rise apartments you've been talking about, Mr. Mayor?

[The mayor reiterates his anti-warehousing argument.] 

Eddie Davis: Theoretically we could have both.

Council member Don Moffitt: The transit-oriented development is important, but not on a parcel by parcel basis. GoTriangle owns across from Chapel Hill Street will have TOD; the Innovation District and Chesterfield Building will also have Class A office space. West Village, 605 West, 539 Foster, Liberty Warehouse are providing market-rate residential.

We need to think about open space, parking and affordable housing, all which the market is not good at providing. There may be additional uses for the bus station property, but none of it matters today. Today, can the city see a process that would not preclude applying for the tax credit in 2016? We have to simply decide, Can we get a process?

Kevin Dick: The initial read of the Self-Help proposal [to speed up the process] is doable. But the back end of it doesn't allow for holidays, that it's a multi-departmental process juxtaposed against other projects, the police headquarters, economic development. The other element is we would have to make a decision around the midpoint of this process that we would convey the land to a developer so they could prepare the application. It precludes transparent review of many development proposals.

Diane Catotti: Can we get a list of the recommended improvements to the station and the costs?

Kevin Dick: Yes.

Diane Catotti: Of the alternatives, we should take D and E off the table. We would lose control. I also don't think we need Class A office space here. I very much support using public land to support affordable housing. I support public-private partnerships. 

Up to five years ago, we had less than 200 residents downtown. I understand the concerns about the development, but that's new money. There's no question that we will have affordable housing downtown, but I don't want to rush this process. We don't want to lose the $9 million in tax credits, but if we do things the way they shouldn't be done, regardless of who the players are, rushing things is not the way to do business. I counsel patience. In the next 5-10 years we will get where we want to be. I would like to see mixed-use and mixed-income, with elements of affordable housing.

I'm not opposed to a two-stage process, though.

Steve Schewel: If we're not using the tax credits and public land, I want to know how we're going to get affordable housing. We can do some great things with our penny. This is a perfect spot for it. Narrow the scope of the RFP, then it becomes easier to do it in this time frame.

Mayor Bell: This land isn't going anywhere.

Eugene Brown: Some of you here may be disappointed in the way this conversation is going. [Someone in audience says "it's a disgrace."] But we have hired a consultant to help us. {Another voice: "We should have done that three years ago."]  We are committed to affordable housing. [Voice: "Let's see the action."] There should not have a rush to judgment on major issues based on late memos. [Self-Help sent them a memo yesterday at 5 about how to expedite the process.]

Eugene agrees that there should not be packing of low-income residents in one building.

Mayor Bill Bell: The manager is going to look at what's being proposed and put it on the General Business Agenda. 

Steve Schewel: What's the process for the RFP?

Tom Bonfield: My recollection how we got here, we were going to come forward on the 24th on recommendations about disposition of the property. We were asked to bring this to be discussed at this meeting and give us any direction. Do you want us to accelerate the process? We need direction. Without it, we'll come back with a complete package moving forward.

Mayor Bill Bell: I want you to do due diligence, come back with a recommendation, and let us debate that. This new information here, fold that in. I get the sense that the majority of the council doesn't want you to rush it.

 

Comments

Lorisa Seibel

Lisa, Thank you for accurately reporting on Durham City Council. I was there today, and I can testify to your quotes. Most if us cannot take time off work to to see what is going on at City Hall. I'm encouraging everyone who is interested in Durham politics to read Bull City Rising.

Natalie

How does self help only get 100 units on 2.15 acres? The asshats over here were planning 200+ on a smaller lot with structured parking, more height restrictions, and market rate

Erik

That's an interesting question. Not sure if that's because that's all they could get out of the grant or if that's all that fits. The site itself is a pretty darn awkward shape with lots of crazy slopes, so that may be a factor as well.

Jahdai Dawes

This is a great conversation and I am glad my friend told me about this link. It would be interesting to see how the construction would take place, as there definitely is an unusual sloping of the land. Easy enough to overcome I suppose, but here is the real challenge for me: affordable housing must be a reality for downtown to Durham as part of being a city committed to ALL of its' residents, not just an elite section of the population. Restaurant employees, bus drivers, and other service workers make the city, particularly downtown, HAPPEN. We cannot ignore that nor deny it, and doing so must provide an opportunity for those at that current situation in life the opportunity to take part in enjoying what downtown has to offer within close proximity. With that said, I wonder what stipulations and regulations would be in place to ensure the viability of the property and the investment? In the transcript, Mayor Bell mentioned Cabrini Green and in my opinion that is a valid point. However, we must remember that that situation didn't start out like that overnight, there was a gradual decline. What would be a good way to put policies in place to ensure the properties stays safe and vibrant if affordable housing became a reality in the space?

I have some ideas, but wanted to hear from some other folks.

Will Wilson

Random thought on public housing: residents aren't building home equity as home owners do. Could residents be credited for reduced maintenance costs if they add "sweat equity"? A credit they could take away and use for a downpayment on housing elsewhere? That would serve like equity in a condo.

Jahdai Dawes

Great thought Will. I think that could definitely work, as it provide long term incentive as well promote an increased sense of ownership for the space.

BCR4Life

Question: Does anybody know how the "affordable" part of the Southside development is working out so far? Has there been success in mixing the income levels there, or is it mostly just the higher income folks buying homes?

I honestly have no idea and would not know where to look to find out. Driving through there awhile back, it looked like there were still plenty of vacancies, but I would like to know if there are any stats on the subject.

Bull City Rising

@BCR4Life: "Question: Does anybody know how the "affordable" part of the Southside development is working out so far? Has there been success in mixing the income levels there, or is it mostly just the higher income folks buying homes?"

The Southside O/O'ed section is mandated under their Federal funding to have one affordable owner-occupied unit for every market-rate unit. I went to an info session on these, and the process was explained that the builders could have an interest list of market-rate buyers; every time they closed on the deal for one affordable unit, they could build one market-rate unit, but not before.

Note that here we're talking about the area as you drive Blackwell St. south of Lakewood. The area east of Roxboro are mixed-income level rental apartments, no O/O'ed units there.

John Tallmadge

I would guess that the site is limited to about 100 affordable units because of differences in construction requirements once a building is taller than 6 stories. It can be stick-built up to that height, but above that height it needs to have a steel frame, which is significantly more expensive.

Erik Landfried

I spoke to a friend at Self-Help who explained that their plans are still being developed, but that the 80-100 apartment number cited is based largely on Low Income Housing Tax Credit financing limits that make it difficult to build more than that number of units in one phase, as well as construction cost considerations. He mentioned that Self-Help expects it will not require the whole 2+ acre site to support 80-100 LIHTC units, so there may be creative ways of utilizing the entire site to serve public interests.

Rob G

@BCR4Life-
I think the affordable piece of Southside is doing pretty well in that there's a waiting list for the affordable units. I know a few people going through the process, and at this point the only way they'll be able to buy an affordable unit is if someone currently in the pipeline for one gets knocked out for whatever reason.

lovedurm

For southside, what does "affordable" mean?

Bull City Rising

@lovedurm: Info below from the Herald-Sun in 2013. NOTE: keep in mind that there are affordable rental units east of Roxboro with lower income qualifications. These higher income qualifications are for a homeownership portion west of Roxboro.

"The neighborhood is planned to be mixed income, with 51 percent or more of the homes selling to people in households at or below 80 percent of the area median income, which is $54,150, according to Johnson. For a two-person household, that’s $43,350.

To help bring in potential buyers, the City of Durham, Duke University and the N.C. Finance Housing Authority have offered incentives.

Johnson said in an email that buyers must be approved for a mortgage from the bank, and he added that, generally, a credit score of at least 640 is required.

For a three-person household earning $36,600 buying a $175,000 home, the cost might be about $754 per month with loans from the city and N.C. Housing Finance Agency."

http://www.heraldsun.com/archive/saving-southside/article_afd292b6-d8e0-5684-9720-e31b48018f2c.html

ThisAft

@Lorisa Seibel

All of the City of Durham Council work session and City Council meetings are audio/video recorded and archived on their website. Typically they are up the day after the meeting:

Works sessions (audio only): http://durham.granicus.com/ViewPublisher.php?view_id=5

City Council Meetings: http://durham.granicus.com/ViewPublisher.php?view_id=2

If you are interested all of the Durham County Commission meetings are video recorded as well and available online: http://dconc.gov/government/departments-a-e/board-of-commissioners/commissioner-meetings/bocc-live-archived-media-library

Those asking about Southside:

There has been success in selling homes to people/families that are making under 80% of the area median income, the biggest issue is getting these people approved for loans. Many people who are lower income have poor credit and so can't qualify. In some ways I feel that in order to truly make home ownership for lower income families a priority the city/county/state should invest in more credit counseling programs and training on how to navigate that process. For families living check to check it's incredibly easy to have a few small issues derail your credit score, making it impossible to get a loan even if everything else is going in your favor. Additionally, because of the Southside project there has been a major increase in private development in Southside - new houses on vacant lots, and tear down/rehabs of older housing stock. Some of these houses are listed near $300,000. Depending on who you are talking to that is a plus, or it's a major negative for the stock of low cost housing. Homes that were being rented for $500 are now being rehabbed and sold for $300,000.

Khalid Hawthorne

It is very possible for Self-Help to use the portion of the Transit Center parcel closer to Whetstone and the ATC North Parking Deck. Put 80-100 stick-built units on less than acre and the rest of the land could developed with a parking deck and market-rate development (preferably a tower rivaling the Mutual Building).

BTW LIHTC standards pretty much dictate the "warehousing" effect. I personally prefer unit-based subsidies vs. project-based but I would also prefer projects considered on a rolling basis. JMHO

Khalid Hawthorne

As far as Southside is concerned...I am amazed at what is happening over there yet I am not surprised. It is strategically well-positioned neighborhood between NCCU, Forest Hills and ATC/ Downtown.

I remember when Hillside Ave., Chestnut and South St (north of Enterprise) had an occupancy rate around 20% (probably less...I can't remember the exact numbers right now) but the homeownership rate was even lower. That is a broken market.

The Southside community had many $500 and less rental units going unoccupied because they were not desirable places to live.

As mentioned in the article someone mentioned "We should have hired a consultant three years ago." YEP!!! Well there is no need of looking backwards now. It is going to take vision and MONEY (beyond state/ federal level grants) to achieve an inclusive downtown. It will also require us to make hard decisions. While LIHTC favors developments with more 60% (30K) and under units, that does not make a healthy neighborhood or development based on my experiences with these apartments. I would need more space to detail but it extends beyond economics.

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