HENDERSONVILLE - Sites for affordable housing could be identified as early as May after Hendersonville City Council agreed June 26 to contract with an organization that will study and suggest potential properties.
Council members unanimously agreed to work with the UNC Chapel Hill School of Government’s Development Finance Initiative to identify possible sites. The process would include a housing needs assessment, public engagement and parcel and financial feasibility studies.
"The goal is to adopt a strategic housing plan in May that would include action steps, possible sites for housing, policies to support development and next steps," said City Attorney Angela Beeker.“Everybody is very interested in and excited about this initiative. City Council, staff and the community.”
After the plan is adopted in May, the city would move forward with seeking private investors.
The $60,650 contract with DFI would be funded from a $100,000 grant the city received from Dogwood Health Trust to address affordable housing needs.
“Our approach is really similar to the approach a private developer would take in understanding the feasibility of a project,” Marcia Perritt, director of the DFI, told council members Wednesday.
“I think the difference is that we really emphasize community engagement and public interest, so making sure that public interests are at the forefront of any development plan, but also making sure that the plan is realistic, it is financially feasible, both for you and a private partner, and works within the actual context of your market and community.”
The June 26 vote was the latest effort by the city to tackle the issue of housing. In 2023, City Council identified affordable housing as one of its top five priorities, and this year, the issue became the city’s second-highest priority, after public safety, Beeker said.Public safety has moved to the No. 1 priority.
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In the fall, council members asked staff to begin working on a strategic housing plan that looked at needs across all income levels in the city, including affordable and workforce housing. A Strategic Housing Steering Committee was formed and has worked with city departments, other municipalities, the Department of Social Services, elected officials and the public.
During a housing summit in May, the city learned that having housing available at all levels was most beneficial, and they should focus on supply, stability and subsidy, Beeker said.
While researching potential sites, the DFI would look for obstacles the city could remove for affordable-housing developers and ways to increase incentives. Policies would have to be changed or put into place to encourage housing, and city staff may have to take a fresh look at restrictions such as parking requirements that could be changed to attract developers.
The city intends to take a long-term look at housing to make sure any housing projects remain affordable and don’t turn into market rate a few years down the line, Beeker said.
More public input sessions will be held, and council members are planning to focus their “Council Conversations” sessions in September and October on housing. A survey will be conducted to determine residents’ needs.
Council members are also very willing to work with Henderson County officials on housing, Beeker said.
The DFI process
The DFI will complete pre-development tasks for the sites it identifies, including parcel analysis and financial feasibility, to help prioritize the sites, according to its proposal.
The parcel analysis will look at topography, hydrology, infrastructure and other concerns to prioritize sites. The DFI will use in-house staff including architects and design team members.
The needs assessment will look at types of housing needed at different income levels, as well as drivers such as growth, area employment and existing housing supply. The DFI will also hold public engagement sessions.
When it comes to finding possible housing sites, the DFI will look primarily at publicly owned properties, including sites that could qualify for Low Income Housing Tax Credit development, the proposal says, adding that LIHTC is the largest affordable housing finance program in the country.
“The reason is, the LIHTC program is what is consistently funding affordable housing in North Carolina,” Perritt told council. “I dare say 99% of affordable rental housing in North Carolina currently is using the LIHTC program.”
The DFI aims to find four potential sites, then prioritize up to two and make recommendations for the properties.
If the city decides to continue working with DFI at the end of the contract, the DFI would “conduct additional site-specific pre-development analysis and assist the city in identifying experienced private developers to execute an affordable housing development project,” according to the proposal.
“Following the selection of a development partner, DFI will then support the city of Hendersonville in negotiating key deal points in a development agreement with its selected partner.”
These services would require another contract.
The DFI is currently working on several projects across the state, including in Brevard and Buncombe County. More information about the DFI can be found at https://dfi.sog.unc.edu.
Visit hendersonvillenc.gov/projects/strategic-housing-plan for more information about the city’s strategic housing plan, the Affordable Housing Summit from May, and get project updates. Visit youtube.com/watch?v=T6RJQ9QTj1A to watch the June 26 council meeting.
The Strategic Housing Steering Committee meets at 4 p.m. on the third Thursday of each month, and these meetings are offered via Zoom for the public to watch at any time and give feedback.
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