Nine years ago, the City of Raleigh set an “aspirational goal” of creating 5,700 affordable housing units by 2026. Today, with less than a year to go before the deadline, the city is about two-thirds of the way there with 3,848 units.
Creating and preserving affordable housing in Raleigh has gotten harder since 2016 thanks to a steep rise in both property values and the cost of building. Despite an $80 million affordable housing bond passed in 2020 and missing middle zoning reforms codified in 2021, demand for affordable units continues to far outpace supply: today, the city estimates that more than a third of Raleigh households are “cost burdened,” meaning they spend 30 percent or more of their income on housing every month. Countywide, about 1,400 people are experiencing unsheltered homelessness, and there’s a staggering shortage of 60,000 affordable units.
Against this backdrop of acute need, city staff are drafting an affordable housing plan for the next five years. The new plan sets a goal of creating or preserving 1,345 affordable housing units by 2030 and reducing unsheltered homelessness to “functional zero” so that instances are “rare, brief, and non-recurring.”
At a work session on Tuesday, the Raleigh City Council previewed the new plan and received an update on the city’s affordable housing efforts to date from Emila Sutton, director of the Department of Housing and Neighborhoods.
Affordable Housing Progress Dashboard
Source: raleighnc.gov
“The city’s affordability is influenced by … housing demand, housing supply, development costs, as well as household income and market shifts,” Sutton told the council members. “Population growth and limited affordable housing supply have combined to create an affordable housing crisis that is fueling homelessness in our community. There’s no single solution to this issue.”
Sutton explained to the council that the 2020 affordable housing bond is divided into different spending buckets: $28 million for public-private housing partnerships, $24 million for gap financing for Low-Income Housing Tax Credit (LIHTC) projects, $16 million for site acquisitions, $6 million for home repairs, and $6 million for homebuyer assistance.
The city has spent $56 million worth of the bond so far, Sutton said. That money has funded the creation of 891 affordable units through public-private partnerships and LIHTC gap financing; the acquisition of land for more than 300 new units; and homebuyer assistance or home repairs for an additional 107 units.
The city has one year left to spend the remaining $24 million of the bond. But according to Sutton, Raleigh will need far more money than that to realize its affordable housing goals by 2030. City manager Marchell Adams-David said during the council work session that city staff are already discussing when to bring forward another bond or penny tax for affordable housing.
Raleigh’s new affordable housing plan—which exists only in draft form, for now—includes an array of new tools and strategies to increase affordable housing stock and reduce homelessness. They include:
- Streamlining affordable housing development by simplifying the permitting and review process
- Expanding the city’s “Fast Track” program for constructing accessory dwelling units (ADUs)
- Incentivizing mixed-use development with a new funding model, which city staff and a consultant are working on
- Expanding rental assistance for low-income homeowners
- Exploring the community land trust model
- Exploring zoning changes that increase housing variety
- Addressing the root cause of unsheltered homelessness, which is housing scarcity
- Offering incentives to private landlords to participate in affordable housing and homelessness prevention programs
- Creating a flexible fund to assist residents experiencing homelessness with expenses like housing application fees, security deposits, and first and last month’s rent
The city’s new goal of creating 1,345 affordable units in the next five years translates to 269 units per year—less ambitious than the previous target of 570 units per year. The new goal reflects the amount of production the city has been able to deliver in recent years and the higher cost of construction, Sutton said.
At the end of Sutton’s presentation, District C council member Corey Branch asked her about the main obstacles to achieving Raleigh’s affordable housing goals.
“It’s really just a resource game,” Sutton replied. “The city has done an amazing job of setting up this infrastructure to get units on the ground, and so it’s just a matter of, how do we maintain that momentum? And that’s really a question of resources.”
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Chloe Courtney Bohl is a corps member for Report for America. Reach her at chloe@indyweek.com. Comment on this story at backtalk@indyweek.com.