January 26, 2021

City Council Affordable Housing Workshop

2019 Work Session

Affordable Housing - Hard & Complicated

2019 Work Session:

The City’s role in affordable housing

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Funding

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City-owned Land

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Regulatory

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Convenor / Collaborator

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2021 Affordable Housing Work Session

1. Affordable Housing is Complex
2. The Needs are Significant
3. The City’s Approach -
1. Continuum of Housing
2. Past Success and Future Work Plan
4. Affirm the Direction & Priorities

The Challenge of Affordable Housing

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Most wages, salaries & incomes we produce in our area don’t support the average housing costs in Asheville, both rental & homeownership.

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A healthy affordable mixed-income community needs a variety of housing types at a variety of price points, both homeownership and rental, for the variety of incomes & wages produced in Asheville.

Affordable Housing - Numbers Game

Lower Wages / Higher Housing Costs & Pricing

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Supply / Demand

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What is Affordable Housing?

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Households, both rental & homeownership, should spend no more than 30% of their gross income on housing costs.

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Renter - this includes rent & utilities

Homeowner - this includes mortgage, insurance & taxes.

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……….The more $$ we spend on housing, the less we have to spend on life’s other necessities and to support the local economy.

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Recognize the challenges in Asheville

• Cost of Capital - Financing costs
• Lack of Building Efficiencies
• Availability of Buyer Financing
• Cost of Materials
• Lack of industry leadership
• Lack of density
• NIMBYism
• Local government regulation & fees
• Land prices / availability

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• Topography Challenges
• Market Challenges - Supply & Demand; Quality of Life
• Lower Wages - Service & Tourism Economy

Local Housing Challenges

Point in Time - Homes for Sale in Asheville

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In 2 checks of the For Sale housing market this past Fall, there were only 38* homes on average in the City of Asheville listed for sale under $275k, out of approximately 275 listings. That's just 14%.

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• The average For Sale price of the 275 dwellings was approximately $660k;

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• The median For Sale price of the 275 dwellings was approximately $522k.

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*Please note only about 25 to 30 of those 38 homes are move-in ready based on Realtor experience.

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Notes from the Bowen Report

*Rental-Vacancy*

Vacancy rate / Market-rate Apartments: Tipping up, new construction of multi-family units are bringing the market into better balance.

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Vacancy rate / Affordable Apartments: However, there remains limited availability for lower income households seeking affordable rental housing.

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Local Housing Challenges

Cost-Burdened:

• 46.1% of renters (17,643 households) are cost burdened
• Paying over 30% of their income towards housing costs
• 19.4% of renters (7,439 households) are severely cost burdened
• Paying over 50% of their income towards housing costs

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Rising rents:

• Since 2014, rent in Asheville has increased by 5.2% annually.
• For the average renter, this means if their rent was $1,000 in 2014, it is now $1,350.

Notes from the Bowen Report

*Rental*

Notes from the Bowen Report

*For Sale*

Among owner households:

• 21.3% of homeowners (14,310 households) are cost burdened
• Paying over 30% of their income towards housing
• 7.9% (5,283 households) are severely cost burdened
• Paying over 50% of their income towards housing

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For Sale inventory:

• Currently, the available homes priced under $200,000 has diminished to just 63 units, down from 460 homes in 2014.

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Individuals & families earning below $60,000 have very limited home buying choices in the community. Homeownership is necessary to help build wealth.

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FY 2020 Area Median Incomes

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FY 2020 Area Median Incomes

Average $1,200 Rent

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FY 2020 Area Median Incomes

$1625 Mortgage

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Recognize the Subsidy Needed

• <30% Area Median Income

Gap of up to $120,000 per unit

• 30-60% of Area Median Income

Gap of up to $100,000 per unit

• 80% of Area Median Income

Gap of up to $80,000 per unit

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Math - $400 less than market x 12 months x 20 years = $96k

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Gap depends on % of AMI, length of affordability, # of units, location of build, style of build, rental, homeownership (DPA)

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Questions?

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2019 Work Session Takeaways

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Support the partners already doing the hardest work, the under 60% AMI individuals and families

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Identify the gaps in the partnerships, funding, programs, incentives, regulations and fill them so municipal resources can go farther for 60% - 80% - 100% AMI

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Call on for-profit developers & lenders to

be a part of the solution

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Build Community Coalition & Bring More Partners to the Table

Recognize our role in Affordable Housing

Subsidy - Investment

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Invest upfront on the build …

$$ incentivize the developer

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-or-

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Invest on the back end …

$$ subsidize the renter or homeowner

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This takes Partners!

Solutions - Incentives / Funding

Policies (20/80/20 - rental)

At least 20% of the Units at or below 80% AMI for a minimum of 20 years, with a strong preference for at or below 60% AMI.

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• Disposition of City-owned Land
• Housing Trust Fund
• Land Use Incentive Grant (LUIG)
• Metropolitan Sewer District (MSD) Discount
• Fee Rebates / Expedited Review

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• HOME Investment Partnership Funds

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• $25M Affordable Housing Bond

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Solutions - Partners

Partners

• Mission Driven Developers
• Tax Credit Developers
• Non-Profit Developers
• For-Profit Developers

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Produce, Preserve & Protect Affordable Housing

Developers/Partners AMI Rental /

Homeowner

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Community

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Funding

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How to Build Affordable Mixed-Income Communities

ABCLT

MHO

Habitat

HACA

Homeward Bound

Buncombe County

CAO

Land of Sky COG

NCHFA

Other Developers

For-profit Developers

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LIHTC

CDBG

HOME

Rent Subsidy

CoC / ESG

CDFIs, FHLB

Banks / CRA

Developer Fee

Grants

Philanthropic

Homeless

<30%

<50%

<60%

<80%

<100%

Rehab

Preserving

Protecting

Maintaining

Permanent

Affordability

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Bonds

HTF

CIP

LUIG

Fee Grants

Expedited Review

City Land

Infill

Infrastructure

Incentives

Questions?

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What’s needed in Asheville’s Housing Market

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A healthy equitable inclusive mixed-income community with a variety of housing types at a variety of price points, both homeownership and rental, for the variety of incomes & wages we produce in Asheville.

Council Vision 2036

Lee Walker Heights

• Partnership - Housing Authority, Mountain Housing

Opportunities

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• Investment - $4.2M

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• Resources - $1.38M General Fund

(Tools) $1M Affordable Housing CIP

$1.82M GO Housing Bond

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• Timeline - Est. completion May 2021

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• Results - 62 <60% AMI

212 Units 96 < 50% AMI

54 < 30% AMI

Min. 30 years of Affordability

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Lee Walker Heights

360 Hilliard Avenue

• Partnership - Kassinger Development Group

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• Investment - ≅$2.5M

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• Resources - $1.4M Housing Trust Fund

(Tools) ≅ $560,000 Land Use Incentive Grant

≅ $540,000 City-owned Land (discount sale price)

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• Timeline - Est. Completion Spring 2021

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• Results - 16 units < 80% AMI

34 Units 18 units < 60% AMI

50 yrs. of Affordability

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360 Hilliard Avenue

Amaranth Apartments

• Partnership - Workforce Homestead

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• Investment - $1.541M

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• Resources - $1.2M Housing Trust Fund

(Tools) $341,100 HUD HOME Funds

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• Timeline - Est. Completion Spring 2021

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• Results - 42 Units < 60% AMI

70 Units 10 Units < 50% AMI

18 Units < 30% AMI

Min. 30 years of Affordability

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Amaranth Apartments

Ironwood Apartments on South Slope

• Partnership - Tribute Companies

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• Investment - ≅ $3.92M

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• Resources - ≅ $3.92M Land Use Incentive Grant (Rebate)

(Tools)

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• Timeline - Est. completion Spring 2022

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• Results - 39 Units < 80% AMI

49 Units 10 Units < 60% AMI (Vouchers)

20 Yrs. of Affordability

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Ironwood Apartments on South Slope

Asheville Area Habitat for Humanity

• Partnership - Habitat for Humanity

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• Investment - $860,000

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• Resources - $860,000 Housing Trust Fund

(Tools) Note - payback

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• Timeline - 6 For Sale Homes complete

2 more coming soon - Summer 2021

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• Results - 8 For Sale Homes under 80% AMI

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Asheville Area Habitat for Humanity

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Lee Walker Heights

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360 Hilliard

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Amaranth

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Ironwood Apartments

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Habitat for Humanity

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Recap: Affordable Housing Work “2020”

373 units of affordable housing

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72 < 30% AMI

106 < 50% AMI

132 < 60% AMI* rental

55 < 80% AMI rental

8 < 80% AMI homeownership

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$13.02M* City investment, leveraged alongside nonprofit & private investment

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$34,906 per unit

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Additional Accomplishments

• Tax Credits - 429 homes

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• Community Development Updates

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• Development Pipeline

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NOTE for Update - Days Inn / Fairhaven Summit / Millstone LUIG / What else?

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• UNC Chapel Hill / School of Government
• 5 Year Investment Story - FY15 -> FY20
• Affordable homes, Jobs, Businesses

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• Mapping

Questions?

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2019 Work Session Policy Discussion

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• Establish a goal of 200 units per year, direct and indirect.

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• Needs Served:
• Staff recommends focus efforts 80% AMI and below, with emphasis / preference on 60% AMI and acceptance of Housing Choice Vouchers.

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• Prioritize leveraged investments (i.e. matching with County investment, etc.)
• Prioritize geographic areas / land-banking for access to jobs, services and community amenities

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Walkthrough of Key Initiatives for 2021

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• Who are the Partners?

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• What is the Process?

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• What are the Resources?

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• What are the Intended Results?

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• What is the Timeline for Policy Decisions?

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Affordable Housing Work Plan 2021

319 Biltmore

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Deaverview Purpose Built Community

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Talbert Lot - 50 Asheland

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Asheland Avenue Proposal

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Neighborhood Lots for AH

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Homeward Bound - Permanent Supportive Housing

Affordable Housing Work Plan 2021

319 Biltmore

Mixed-use, mixed income development of 250 studio, one and two-bedroom apartments, with 19,000 square feet of commercial space.

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319 Biltmore

Mixed-use, mixed income development of 250 studio, one and two-bedroom apartments and 19,000+/- square feet of commercial space.

• Results -
• 50 affordable units @ 60% AMI, 25 units @ 80% AMI, for 30 years
• A community that positively addresses social determinants of health
• MWBE commitment
• Partners - Homes Urban, MPS Architecture, MAHEC
• Process - RFP Process
• Resources - City Land Contribution
• Timeline - Spring 2021

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Deaverview Purpose Built Community

Create a Purpose Built Communities Master Plan on 60+ acres

Deaverview Purpose Built

Create a Purpose Built Communities Master Plan on 60+ acres owned by the City of Asheville and the Housing Authority.

• Results -
• Mixed income housing: Potential for 300+ units of housing, including new housing for 156 residents at Deaverview Apts.
• Cradle to college+career pipeline: Potential for affordable childcare center and/or new, high-performing school, career center
• Community wellness: Parks & Rec Community Center, onsite health services
• Partners - Housing Authority, Mountain Housing Opportunities, City Parks & Recreation, Buncombe County, Dogwood Health Trust, etc.
• Process - Master Planning & Partnership Agmt w. Housing Authority
• Resources - City Land Contribution, Affordable Housing Bonds
• Timeline - Early Spring 2021

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Talbert Lot - 50 Asheland

0.89 ac.

0.89 ac.

0.50 ac.

0.09 ac.

Transit station on City ROW

Driveway owned by City

Talbert Lot

50 Asheland Ave.

(120 parking spaces)

Asheland Ave.

Coxe Ave.

• Total City Acreage w/ Talbert Parcel = 1.48 ac.

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• Zoning - CBD, Max height 265’

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• Site slopes NW to SE ~ 20 ft.

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Acquire property for an expanded downtown transit center with affordable, mixed-income residential housing, commercial uses, and other public institutional spaces.

Talbert Lot - 50 Asheland

Acquire property for an expanded downtown transit center with affordable, mixed-income residential housing, commercial uses, and other public institutional spaces.

• Results - Landbanking key site in downtown to deliver affordable housing and transit
• Partners - Dogwood Health Trust, FTA
• Process - Allocate budget & accept grant from Dogwood
• Resources - General Fund (sale of property to White Labs), significant grant from Dogwood Health Trust
• Timeline - Spring 2021

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Asheland Avenue - Proposal

Haywood Street Congregation proposes to build 42 permanently affordable apartments on a 1.09 acre, city-owned site located on Asheland Avenue

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Asheland Avenue - Proposal

Haywood Street Congregation proposes to build 42 permanently affordable apartments on a 1.09 acre, city-owned site located on Asheland Avenue

• Results - 42 permanently affordable apartments with 5,500 square feet of community space with 20 units reserved for people making extremely low incomes ($9,300 or less per year for individuals)
• Partners - Haywood Street Congregation, Dogwood Health Trust, others
• Process - February 23, 2021, Council will be asked to vote on whether the City should enter into a contract to sell land this land for $1.00 to Haywood Street Congregation
• Resources - City Land Contribution, HTF funding of $1M
• Timeline - February 23, 2021

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Neighborhood Lots for Affordable Housing

Development of three small City-owned vacant sites with affordable housing.

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Development of three small City-owned vacant sites with affordable housing at Kentucky Drive, Lufty Avenue, and West Chestnut Street.

• Results - 6 homeownership opportunities across three sites
• Kentucky Drive - 4 Townhomes proposed @ 60 % AMI, priced at $186k - $190k
• Lufty Avenue - 1 Single-family @ 60% AMI, priced at $135k
• W. Chestnut - 1 Single-family @ 60% AMI, priced at $135k
• Partners - Asheville Habitat for Humanity (Kentucky Avenue) and AB Community Land Trust w. Juna Group (Lufty & W. Chestnut)
• Process - RFP Process
• Resources - City Land Contribution, funding
• Timeline - April / May 2021

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Neighborhood Lots for Affordable Housing

Homeward Bound - Permanent Supportive Housing

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• Results - 80 units of permanent supportive housing for people experiencing chronic homelessness in Asheville, serving individuals at 30% AMI and below
• Partners - Homeward Bound
• Process - Partnership
• Resources - $2M in funding proposed
• Timeline - Spring 2021

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Homeward Bound - Permanent Supportive Housing

City Land - ongoing evaluation

• Mapping and future policy discussion on land from Urban Renewal

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• 81-91 Riverside

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• S. Charlotte Street (future)

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• $15M High-Impact Investments
• 319 Biltmore & Lee Walker Heights
• Deaverview Purpose Built
• $5M Housing Trust Fund
• Available Funds ≅ $500,000
• $3M Land Banking
• Deaverview Purpose Built - 65 Ford Street, $1.5M
• Available Funds = $1.5M
• $1M Community Land Trust
• Neighborhood Lots at Lufty, W. Chestnut, and other investments
• $1M Down Payment Assistance

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City of Asheville - $25M Bond Funding

319 Biltmore

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Deaverview Purpose

Built Community

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Talbert Lot - 50 Asheland

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Asheland Avenue Proposal

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Neighborhood Lots for AH

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Homeward Bound -

Perm. Supportive Housing

Recap: Affordable Housing Work Plan 2021

319 Biltmore

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Deaverview Purpose

Built Community

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Talbert Lot - 50 Asheland

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Asheland Avenue Proposal

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Neighborhood Lots for AH

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Homeward Bound -

Perm. Supportive Housing

Recap: Affordable Housing Work Plan 2021

Housing for 500+ individuals & families

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$23M+ City investment, leveraged alongside philanthropic, nonprofit and private investment

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2019 Work Session:

Building Community - Collective Impact

You need Policy, Community & Capacity to Make Change …

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And a holistic comprehensive approach to

Build Affordable Mixed-Income Communities ...

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Social Issue Economic Issue

Equity Issue Racial Issue

Education Issue Community Issue

Health Issue Political Issue

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Summary: Policies, Capacity & Community

Success Stories:

Lee Walker Heights, 360 Hilliard, Amaranth, Ironwood Apartments, Habitat for Humanity, etc.

373 units of affordable housing

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$13.02M* City investment, leveraged alongside nonprofit & private investment

Work Plan 2021:

319 Biltmore, Deaverview Purpose Built Community,

Talbert Lot - 50 Asheland,

Asheland Avenue Proposal,

Neighborhood Lots for AH, Homeward Bound, etc.

500+ potential units of affordable housing

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$23M+ City investment, leveraged alongside philanthropic, nonprofit and private investment

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“Holistic” Affordable Housing Policy

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• Affordable Housing Policy beyond the “Transaction”
• Anti-Displacement / Gentrification
• Energy Efficiency / Sustainability
• Development & Design Standards
• Strong Compassionate Community Property Management
• Equity & Inclusion
• Community Outreach
• Concentration of Lower Incomes

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• Be Bold - 250 units per year

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“Codifying” our worksessions and Affordable Housing Policies

Questions

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Discussion

To Think About … Next Time

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• Continued focus on different AMIs
• AHAC
• Infill Development
• Homeownership
• $$$
• Low Barrier Shelter
• 211 - Affordable Rental, Homeownership & Homeless Calls
• More acceptance of Vouchers
• Homeless Vouchers - HOME Funding

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