This is the third installment in our series spotlighting the different ways communities across North Carolina are tackling their housing needs.
Here, we are recalling one of our favorite projects in Waynesville, which we first wrote about in 2023 (read that post here).
The idea
The City of Waynesville was asked to provide financial support for a developer’s project to help them overcome increased construction costs.
The developer’s project was fully entitled and needed no additional legal permissions from the City to move ahead. And the developer had previously agreed to cover the costs of the required municipal infrastructure for their building (e.g. water and curbs and gutters). Due to cost increases the developer asked whether the city would reimburse them for these costs under N.C.G.S. 160A-499.
The City was open to reimbursing the developer because it liked the project for the location and had a good relationship with the developer. With our encouragement, the City asked the developer to provide some additional benefit to the City in exchange for this additional assistance. The City and developer agreed that the developer would make a subset of the new apartments affordable for 10 years to residents at 80% of area median income, when the apartments would have otherwise been all market rate. Compliance with the affordability requirement was a part of the tests for paying out the developer’s reimbursements for the municipal infrastructure investments.
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.
Why we like it
We think this approach is notable because:
It demonstrates a creative public-private partnership between the City and a private developer.
- The developer needed help from the City, and the City was able to achieve additional below-market housing for its residents.
The City accepted flexible “affordability”.
- The City could have demanded longer affordability terms or lower rate housing, but that might have pushed the developer too far. The City understood that no one project will address all its housing needs and took a “win” on affordable housing when available.
There was very little risk to the City, and no expense beyond what the City would already have otherwise done for this developer.
This example shows that it’s important to be thinking about your housing goals whenever you are approached by private enterprises looking for public participation in a project. If you have your housing goals at the forefront of your negotiations, you may be able to get some level of affordable housing as part of the project when it wouldn’t otherwise be contemplated.
This project also embodies not letting perfect be the enemy of the good. While the City may have wished for a longer affordability period or more affordable units, it got some period of affordability and some below market units instead of none.
Let us know if you’re interested in discussing this idea further or if you’d like our help in negotiating with private developers on your behalf.
Next month we plan to highlight Chapel Hill’s policy to reduce review time for affordable housing projects applications.
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