An apartment developer approached the City of Waynesville for some extra support on a project that the City had already fully entitled for construction. With the run up in construction prices, the developer asked the City to participate in an arrangement under Section 160A-499, which allows the City to undertake some public improvements subject to reimbursement by the developer.
The developer had already agreed to make those improvements at its own cost, so the City could easily have turned down the request. But the City liked the project for the location, had a good relationship with the developer, and wanted to help.
We encouraged the City to consider asking the developer to provide some additional benefit to the City in exchange for this additional assistance. The City and the developer agreed that the developer would make a subset of the new apartments affordable for a time to residents at 80% of area median income, when the apartments would have otherwise been all-market-rate.
Because the apartment project was not otherwise getting any affordable housing subsidies, the City and the developer could agree on a less formal process for ensuring compliance with the affordability requirement. We made compliance with the affordability requirement a part of the tests for paying out the developer’s reimbursements (along with, for example, tax base increases).
We like this project because –
- It shows a productive negotiation with a private partner – for a public-private partnership to be worthy of the name, there should be potential upside and downside for both partners. So here when the developer asked for some extra assistance, the City asked for something in return.
- It’s another way to advance the housing cause – at no meaningful risk to the City and no expense beyond what the City would already have otherwise done for this developer.