Durham Downtown Housing costs risingAffordable Housing Crisis in Durham NC?
The rising costs of downtown living in cities like Durham NC are unfortunately not unique. Check any city with desirable demographics, great homes, unique neighborhoods, great restaurants like Durham has and you find rising home costs. What about Durham is unique vis-a-vis affordable housing? Consider the following: how we failed to meet Federal affordable housing guidelines in 2015 and 2016, the limited amount of city-owned land downtown, and the attractive short-term incentive for the City of Durham working with out of state developers on all of these multi-story apartment buildings downtown.
Durham is in an ‘affordable housing crisis,’ council members say.
I worked for a national financial institution in the wealth planning field for many years and this is where I first came into the technical and correct definition of “Affordable Housing” by HUD. Some of my clients were residential home investors and or residential developers. My role was client facing and my team included business and commercial bankers who I worked with when one of my clients was interested in a new commercial or business loan. Our institution had a department dedicated to the tax credits and tax planning available to commercial developers when they allocate a portion of their new project to “Affordable housing or Affordable office space”. Many of us are unaware that banks have CRA (community reinvestment act) and tax credit planning departments to help developers plan effectively and meet Urban Federal Affordable housing guidelines. A city often cited for doing well with Affordable housing downtown is Tulsa OK.
Twenty new people move to Durham every day.
They’re arriving in a city in the midst of an affordable housing crisis, city leaders said this week.
On Wednesday night, the three newest elected City Council members met with Durham Congregations, Associations and Neighborhoods, part of the community-organizing group’s efforts to hold elected officials to their campaign promises.
Vernetta Alston, DeDreana Freeman and Mark-Anthony Middleton have been in office about 100 days. Middleton was in Durham CAN’s clergy caucus before running for office. He told the group he has learned that governance is very different than activism.
When looking at apartments, you may have come across terms like “affordable housing,” “Section 8,” and “low-income housing.” Perhaps you are wondering what it all means — and are all these terms the same thing? And finally, would you qualify for affordable housing?
The first thing you need to know is the acronym AMI. This stands for “Area Median Income” and basically means that, based on where you live, can you afford to rent an apartment on your income? Every year, HUD (Housing and Urban Development) determines the AMI for every region in the country. Once the median income is established, households earning less than 80 percent of that amount are considered low-income. Those earning less than 50 percent are considered very low-income, and anyone making less than 30 percent of the AMI is considered extremely low-income.
As far as rent goes, you shouldn’t spend more than 30 percent of your income. If the average income in your area is $80,000 a year, but you make $35,000 a year, then you could qualify for a subsidy that would help you stay around that 30 percent level for your rental costs.
While that’s basically how it works, there’s more to it — first, you’ll have to make sure you qualify. There’s a “sweet spot” when it comes to income — if your income is too low, you won’t be able to afford your “share” of the rent, even with subsidies. If your income is at or slightly above 50 percent of the AMI, you probably won’t qualify.
So, what does “affordable housing” look like? Well, it depends. First, there’s something called “Low-Income Housing Tax Credits” that go to developers who agree to set aside a certain percentage of units for low-income families. In turn, the rents for these units must remain affordable (again, around that 30 percent of AMI level) for low-income renters; as long as they are, the developer can continue to get the tax credits.
Then there’s public housing, which is government-owned housing. It stays affordable, because the government sets the rental rates. This program is fading out — no more public housing is being built (and hasn’t been since the 1970s), and when the units are torn down, they’re gone for good.
And finally, there’s Section 8. HUD’s Section 8 program helps renters pay rent when it exceeds 30 percent of AMI. There are two types of Section 8 — Tenant-Based and Project-Based. Tenant-Based means the voucher goes directly to the renter, and they can move with it — they don’t have to stay in one apartment community. Project-Based means the subsidy goes to the landlord. The landlord agrees to set aside some units for qualifying families.
So, how do you apply for affordable housing? It depends on the type you want to get. For public housing and Section 8, you’ll have to apply to the public housing agency in your state (you’ll find the list of agencies at HUD.gov). For affordable housing, just look for an apartment complex that offers it and apply directly to the management office.
Affordable Housing Crisis books that help define how we got here