Tuesday, August 1, 2023

Affordable Housing Recap

Meetup Recap

From the AVLmeetup event on August 1, 2023

2nd Annual Affordable Housing

Event details, podcast, and full transcript ›

Key Takeaways

  • Asheville and Buncombe County both aim their programs at households at 80% of area median income and below, using the standard definition of affordable: no more than 30% of household income spent on housing.
  • Across Land of Sky's four counties (Buncombe, Madison, Henderson, and Transylvania), 19% of homeowners and 50% of renters are cost burdened. A 2021 Bowen needs report projected a shortfall of 7,700 rental units and 1,800 ownership units by 2025.
  • An affordable rent for a two-bedroom at 80% AMI, utilities included, was $1,530 under the HUD tables released in June 2023.
  • Asheville's Land Use Incentive Grant rebates four years of property taxes to a developer who keeps 20% of units affordable at 80% AMI for 20 years, and up to about 21 years of taxes on the full points chart. City Council approved one worth $1.9 million over 21 years the week before this event.
  • Short-term rentals make up roughly 3% of the county's estimated 130,000 units, about 4,000 homes. As Jonathan Jones put it, a small percentage of a large number is still a large number.

Meeting Our Panelists

Affordable housing, loosely defined by the cost of housing remaining lower than 30 percent of one’s household income, has become a faceted issue gaining a lot of attention in Asheville in recent years. AVLmeetup’s three guest panelists, Sasha Vrtunski, Traci Thompson, and Jonathon Jones, discussed some of the key problems surrounding affordable housing in Asheville. The panel discussion was also dedicated to discussing potential solutions which among a room full of local investors, developers, loan officers, agents, and planners was not met with much consensus.

Vrtunski has spent 30 years working on affordable housing in the Asheville community and is the city’s Affordable Housing Officer. Vrtunski is working toward launching an affordable housing plan for Asheville in September that will evaluate the last few decades and improve upon some of the ongoing issues. Thompson is a housing planner working directly with Land of Sky Regional Council. Jones tackles affordable housing, homelessness, and federal grant programs through Buncombe County’s Community development team.

Problems Surrounding Affordable Housing In Asheville

One of the longstanding issues has been financing the building of affordable housing. Thompson noted that North Carolina has lost more affordable housing units than any other state in the last ten years. Most affordable housing programs within Asheville and the greater Western North Carolina region focus on those with 80% of area median income and below. Due to a lack of affordable housing units combined with Asheville’s cost of living being in the top 25% of the country, those working in affordable housing have expended most of their resources on trying to get rental housing and affordable rental units developed. Despite that 50% of renters are experiencing house cost burden in Buncombe County and surrounding counties, developing rental properties is still the primary focus of the city of Asheville. Between a stark rise in the cost of living in Asheville, low voucher use, and construction issues unique to Asheville’s mountainous terrain, there is an unlimited excess of hurdles that city council members, housing planners, and developers face.

Funding

In 2016 Asheville passed an affordable housing bond for 25 million. The city council hopes to pass another bond in the fall of 2024. Asheville needs to generate more layered funding that is not derived strictly from the government. Preservation funds are a great way for cities or developers to buy an apartment complex and keep it affordable before it gets sold to someone else. Figuring out how Asheville should use its bond money is a large part of Vrtunski’s upcoming housing plan.

Upcoming Bill For Commercial Code in NC

Even more critical than zoning is making changes to the commercial code in North Carolina. Removing duplex, triplex, and quadruplex’s out of the umbrella of commercial code and into the residential code has been a subject of much debate. Builders also need to be more strategic about how they use the limited amount of land they have in Asheville and assess community needs. Currently, a new bill in North Carolina could change commercial coding laws. House Bill 488, which was pushed back to August 16, will directly impact the current provisions to the building code and land development regulations to increase the project cost minimum. Voting and creating partnerships between landowners, property owners, developers and those working within the government is crucial to make housing in Asheville more affordable for the community.

Questions From the Room

  • How can developers work better with the city to get affordable projects done? Vrtunski said staff is open to it, and that the upcoming housing plan is partly meant to get developers, council, staff, and neighbors on the same page. Ideas already discussed publicly include a different council threshold for affordable projects and an expedited review process. She noted that Chapel Hill's new expedited review for affordable housing takes six months, which is Asheville's normal timeline. Fees in lieu, like the sidewalk fee, are harder to relax because the sidewalks still have to get built.

  • Is there a tool the private sector could hand local government that it does not already have? Jones pointed at the state. Much of what a North Carolina local government can do is defined in Raleigh, so advocacy through the trade associations you already belong to helps more than most people expect. Vrtunski added a shorter list: accept housing vouchers on your units, learn the history of the neighborhood you want to build in before you show up with a plan, and partner with community organizations like the local land trust.

  • What are the top three things you would change at the state level? Vrtunski chose inclusionary zoning, or at least the option to use it. Thompson chose moving duplexes, triplexes, and quadplexes out of the commercial building code and into the residential code, which would drop expensive requirements like sprinklering. Jones chose home rule. North Carolina is a Dillon's Rule state, so local governments can only do what the legislature specifically permits.

  • Is the city looking at rezoning commercial property for housing? Vrtunski said the city tried something adjacent with its Urban Center rezoning about a year earlier, and it did not turn out the way it was meant to. She wants to come back to it through the affordable housing plan, with an NC State intern mapping the commercial corridors to see what density is actually possible. Asheville is landlocked and cannot annex, so making more of the land it has is the practical path.

  • Supply aside, what is being done about the wage side of affordability? Jones described two county approaches: preserving naturally occurring affordable housing by funding emergency repairs through nonprofit partners so families are not displaced, and funding tenant-based rental assistance with supportive services for extremely low income households. Vrtunski pointed to CDBG-funded nonprofits, a strategic partnership fund aimed at the opportunity gap for young people, and economic incentive grants written with the county to attract higher wage employers.

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