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2019-02-21 Special Meeting NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 SPECIAL MEETING, FEBRUARY 21, 2019 PAGE 312 ASSEMBLY The New Hanover County Board of Commissioners met for a Joint Special Meeting with the Wilmington City Council on Thursday, February 21, 2019, at 3:03 p.m. in the Andre’ Mallette Training Rooms at the New Hanover County Government Center, 230 Government Center Drive, Wilmington, North Carolina. Members present: Chairman Jonathan Barfield, Jr.; Vice-Chairwoman Julia Olson-Boseman; Commissioner Patricia Kusek; and Commissioner Rob Zapple. Commissioner Woody White was absent. Staff present: County Manager Chris Coudriet; County Attorney Wanda M. Copley; and Clerk to the Board Kymberleigh G. Crowell. City of Wilmington Councilmembers present: Mayor Bill Saffo; Mayor Pro-Tem Margaret Haynes; Councilmembers Neal Anderson; Clifford Barnett, Sr.; Paul Lawler; Kevin O’Grady; and Charlie Rivenbark. City of Wilmington staff present: City Manager Sterling Cheatham; City Attorney John Joye; and City Clerk Penny Spicer-Sidbury. Chairman Barfield and Mayor Saffo called their respective Boards to order for the Special Meeting reporting that the purpose of the meeting is to discuss affordable/workforce housing and any other topics either Board identifies. PRESENTATION ON RECOMMENDATIONS FROM THE JOINT CITY OF WILMINGTON/NEW HANOVER COUNTY WORKFORCE AND AFFORDABLE HOUSING AD HOC COMMITTEE Jody Wainio, Chair of the Joint City of Wilmington/New Hanover County Affordable/Workforce Housing Ad Hoc Committee, presented the following recommendations of the committee:  Affordable Housing Ad Hoc Committee Overview:  13 committee members appointed by City Council and County Commissioners  Two staff liaisons from City and County along with five support personnel for specific data  Met 12 times over a seven-month period with over 30 hours of work involved  Investigated Best Practices across North Carolina to include Asheville, Durham, Charlotte, and Raleigh  Interviewed key players in the housing arena from local and other communities  Designed a phased approach plan for our community based on these findings  Why is it important:  Community benefits; community values; employer benefits; pure quality of life; economic development  Short Term Recommendations (0-6 months):  Revise City and County Land Use Ordinances to add or improve Accessory Dwelling Units, and density and height requirements and regulations  Establish a Permanent Advisory Committee on Affordable/Workforce Housing  Conduct a housing study and a statistically valid opinion survey  Fund a staff position to support the efforts of the Permanent Housing Advisory committee  Support a public awareness, aka marketing, campaign; utilizing a public relations/marketing consultant  Mid-Term Recommendations (6-18 months):  Establish an Affordable Housing Fund  City- and County-owned redevelopment projects include an affordable housing requirement  The City and County should identify ways to streamline/expedite the permitting process  Long Term Recommendations (18 Months and over):  Support existing financial literacy and homebuyer education  Explore ways to encourage Cape Fear Public Utility Authority (CFPUA) to defer fees, offer payment plans, and rebates for affordable housing developers  Each jurisdiction utilizes synthetic Tax Increment Financing (TIF) as a means of supporting the development of housing that is affordable  City Council and Board of Commissioners encourage the use of the 4% Low Income Housing Tax Credit bond program, with bonds to be issued by the Housing Authority. This would require no financial backing by either governing body.  The Permanent Housing Advisory Committee should research the use of Limited Participation Bonds to support development of affordable housing. Winston Salem has successfully utilized this bond.  Current Statistics:  The wage needed to afford a modest two-bedroom apartment at fair market value in Wilmington is $39,720/year  Nearly 50% of area workers earn less than $40,000/year  28% of workers New Hanover County are employed in the food service and retail business, earning an average of $22,698 NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 SPECIAL MEETING, FEBRUARY 21, 2019 PAGE 313  Wilmington’s average rent prices increased by 3.4% from 2017 to 2018 compared to the national average of 1.5%, even outpacing the traditional high rent markets like New York City and San Francisco  There is a supply shortage of existing affordable housing  Two Years Later – Current Priorities:  Housing Study/Public Opinion Survey:  Housing Study - Requires funding, approximately $30,000 from each (City and County)  Some don’t feel we need it as we know there is a problem  Provides us with concrete numbers to measure success of implemented programs - Scorekeeping  Help to gain public (and private) support  Either way, the numbers are needed  Permanent Advisory Committee:  Establishes ownership and involvement in the community  Gives public input without a fight in front of political groups  Relieves the perception (and reality in some cases) that decisions are politically motivated  Affordable Housing Fund:  Need a consistent funding mechanism, but for now, let’s talk about what we could do with $500,000  Provides leverage in the community by offering money to a number of programs and uses  Down payment assistance, no interest loans for projects, infrastructure cost reimbursement  $1,000/month one-bedroom apartments are not hard to find and arguably not affordable  Public Awareness Campaign  Change the face of affordable housing  It’s a marketing thing to gain public support  Cost: $50,000 split between City and County (Community Partnerships like NHRMC, Cape Fear Realtors, will off-set some of these expenses)  How can we work together:  Diversity of housing, to include rental and homeownership, that working households can afford is needed in the county and the city in new construction, infill and rehab  Establish the Housing Fund to provide funding for numerous purposes (let the Permanent Advisory Committee make recommendations on how it will be used)  Approve the expenditure of currently budgeted funds $60,000 from the City and $50,000 from the County for Study, Public Awareness Campaign, and Opinion Survey  Establish the Permanent Advisory Committee as it is critical and will consider recommendations from a wider perspective In response to Board questions, Ms. Wainio stated that the recommendations were provided in April 2017. The recommendation of revising the City and County Land Use Ordinances to add or improve Accessory Dwelling Units, and density and height requirements and regulations have been completed. As far as the affordable housing fund in various cities, some were voted on by a bond, such as Asheville which was for about $25 million and is used mainly for new construction. With a housing fund, the permanent advisory committee would make the determination if the developer has met the requirements to access the funds and if so, staff would distribute the funds. Durham has a permanent tax of one penny that goes towards a housing fund, which has generated $2.8 million. Durham’s goal is to preserve or create 1,150 units over five years and is looking to add a second penny. Vice-Chairwoman Olson-Boseman arrived at 3:11 p.m. A brief discussion was held about infrastructure costs and how to reduce those costs for developers with Cape Fear Public Utility (CFPUA). Chairman Barfield stated he hopes the elected officials who serve on the CFPUA Board can have full discussions with the other CFPUA board members on how to incentivize developers to include affordable housing in their developments instead of placing road blocks in the way. If the costs could be reduced, a housing project will be more affordable. Councilmember Rivenbark stated that while he does not disagree, the cost falls on the ratepayer and is not taxable. CFPUA cannot levy a tax like the County and City. A brief discussion was held about funding a permanent staff position. Commissioner Kusek stated that it is important to fund a permanent staff position. In this fiscal year budget, the County funded half of a position and it did not come to fruition. She understands there has been discussion about the City’s desire to do a housing study versus the County’s desire to fund a position. However, she does not see why both cannot be done in a concurrent manner. Chairman Barfield agreed with Commissioner Kusek stating while the study will provide the number information, having a staff person in place at the same time will allow action to be taken. Commissioner Zapple expressed support of needing a full time person. He would like to see more input on the sustainability of the fund. In response to questions, Ms. Wainio stated that the City of Asheville has three or four permanent employees handling the work. The model that was used in the presentation two years ago was with Cecilia Peers who was housed in the Council of Governments and that model that might work. In response to questions about the four percent Low Income Housing Tax Credit Bond Program, Wilmington Housing Authority (WHA) Chief Executive Officer Katrina Redmond stated that the North Carolina Housing Finance NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 SPECIAL MEETING, FEBRUARY 21, 2019 PAGE 314 Agency receives for the state the allocation of low income housing tax credits that comes from the federal government. It entitles the purchaser of those credits, which are sold on the open market place usually to banks, investment funds, etc., to get a tax credit for a period of 10 years and the money goes into a project. There are two types of tax credits. There is a nine percent tax credit which is extremely competitive. However, when looking at the amount of equity it provides, it really cuts down on the initial cost of that property. There is also a four percent tax credit, while easier to obtain, has been very underutilized. However, four percent of the deal is not a lot of equity into the deal. With the four percent, a tax free bond can be added to that and the WHA can issue those. Two years ago, WHA issued $14 million in short term bonds for construction and 200 units of affordable housing came out of it. WHA can do this everywhere in the county and the city. In response to questions. Ms. Redmon explained that the four percent tax credits are not being used because private developers, in particular, are looking for a larger amount of money that does not have the attached bond because it does have an interest rate that must be paid. However, the bonds are tax free so they cost less. When matching the two together it gives a developer a lot of leverage and has been very successful. It is not used much in part because people are not aware of it. The 200 units she referenced were off of Emory Street on the west side of Creekwood Apartments called Cypress Cove. They are three story apartments, all in one complex, and are leasing now. Councilmember O’Grady stated that regarding the discussion about a one percent property tax going to affordable housing, if that is done then the survey as well as the public awareness campaign have to be done. He also suggested developing a system to address people asking for more density and higher zoning. There needs to be a tradeoff for people requesting more density and higher zoning because the City and County have a problem and it needs to be paid for. He feels the money offered to the City by Tribute Properties needs to be accepted. The developer did not ask for anything in return from the City. He also thinks an aspect of affordable housing that has not been dealt with is how to expand public transportation, make it more reliable, more frequent, and spread more throughout the region. It is an underfunded system and without public transportation, low income people are basically being told to spend a large part of their income on transportation to get to work. A brief discussion was held about affordable housing and workforce housing. Councilmember Barnett stated that this would be building multi-income housing not public housing. Mayor Pro-Tem Haynes stated that a good start with the awareness campaign is rather than saying affordable housing that it should really be called workforce housing. She believes a majority of people do support that type of program. Ms. Wainio agreed that a public awareness campaign would be helpful. Councilmember Rivenbark stated that there should not be any misconception about subsidized housing because people in subsidized housing are citizens just like the rest of us. Subsidized housing has taken a black eye over the years and there have been some horrible consequences such as some developments becoming heavily Section 8 housing. The program is better managed now and there are plans to reduce some of the public housing in town. The possible top issue is the expectation of the development community to solve this problem while it’s continually being made difficult for them to spend the required money to get a project ready to go. It is not their responsibility. He does not understand why our organizations are not making it possible for them to build workforce/affordable housing. These types of developments need to be sprinkled throughout the county. It would make this town stronger and the greater good has to be done for the county as a whole or else this same conversation will be had two years from now. He feels it is time to move forward. In response to questions regarding the difference between affordable housing and workforce housing, Ms. Wainio stated that 80% or less of the average median income (AMI) is what HUD uses for a lot of their programs. The workforce is actually 80% to 120% in AMI, which is how it would be defined in numbers. 50% of area workers in this community are earning $22,000 or less, which is the retail, tourism jobs, etc., so elected officials are representing 50% of people when talking about creating more opportunities for the workforce/affordable housing. Councilmember Anderson stated that the City and County have worked hard, but both need to work together with the taskforce. Chairman Barfield stated in regard to the term of affordable housing, now that everyone is in the same boat, people get it. Affordable housing is what a person can afford based on their paycheck. Typically, a realtor says a person should not spend more than 30% of their income on housing and if spending more than that, then the house is a cost burden. The County raised the minimum wage for its employees to $15 per hour which is just over $31,000 annually. Based on today’s presentations, to afford a two-bedroom apartment a person needs to make at least $37,000 versus $31,000 so there is still work to be done in the county on the livable wage. He is glad this discussion is occurring and that people are understanding what affordable housing really means. In response to questions, Ms. Wainio stated the committee looked at a number of ways other communities are utilizing incentives or other ways to encourage the private sector to build more affordable housing units. One thing that should not be done is concentrating poverty, which is what has already been discussed. Multi-income communities serve a better purpose in that regard. Some areas have density bonuses where it is available, but it has never really been utilized or it has been given to the developers with no strings attached. It is a matter of getting tougher on the numbers, and if a developer wants to increase the density, then affordable units have to be provided. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 SPECIAL MEETING, FEBRUARY 21, 2019 PAGE 315 Chairman Barfield stated that he was under the impression that the County cannot require inclusionary zoning, but it can incentivize the density part. ACTIONS BY THE COUNTY SINCE THE REPORT WAS FIRST PRESENTED New Hanover County Community Development Planner Julia Santure presented the following information regarding actions by the County:  Workforce Housing Update:  County is not eligible to receive annual entitlement funding from the federal government for housing programs.  County has focused its attention on the committee’s recommendation to update the development code.  Before Hurricane Florence:  Development Code Update:  Five new residential districts adapted from the City of Wilmington’s R-5 and Residential Multi-Family districts  Greater by-right density to allow for the full range of densities envisioned in Comprehensive Plan  More diversity in housing types, as it is anticipated Accessory Dwelling Units will be allowed in R-5 developments, just like in the city  Planning staff also plans to work with property owners on a voluntary basis to identify and rezone parcels where the new districts might be appropriate  COAST: streamlined permitting for development  Jointly Funded Housing Staff: $50,000 budgeted in FY19  Habitat for Humanity Infrastructure Partnership: water and sewer service brought to 27 new workforce housing units and 14 existing units off of Gordon Road, which resulted in $212,463 invested in workforce housing.  Housing Gap: 20,000 units throughout the County, including the City and beach towns  After Hurricane Florence:  Hurricane Florence Recovery Coordination Office:  Elevation grants to protect and preserve workforce and affordable housing  Actively advocating for CDBG-DR  Leveraging public property:  Property Conveyance for Workforce Housing Policy  Four parcels valued at $174,400 already conveyed Regarding the elevation grant, Ms. Santure stated that through the Housing Mitigation Grant Program (HMPG), which is administered from Federal Emergency Management Agency (FEMA) to the State then to the County, the County applies on behalf of homeowners if they want to elevate their home. Staff explains the process, how the funding works, and the application is then sent to the State and FEMA. Both entities run the cost benefit analysis, which is how they determine who is eligible for the programs. The County then assists in administering the grant to the property owners. The total investment over the last 18 months in workforce/affordable housing is just over $430,000. Chairman Barfield stated that a total of eight lots were conveyed to Cape Fear Habitat for Humanity (Habitat) from the County which were left over well sites. It is great to be able to donate those lots at no cost and have something that is taxable, while providing something that is affordable. The County is also partnering with Habitat to provide water and sewer off of Gordon Road for the Daniel Boone Trail project which will help make those homes affordable. ACTIONS BY THE CITY SINCE THE REPORT WAS FIRST PRESENTED Suzanne Rogers, Community Development and Housing Planner with the City of Wilmington, presented the following information regarding actions by the City:  City of Wilmington – Housing Programs:  Comprehensive Plan – adopted by City Council includes housing policies:  Diversity of Housing Options; Affordability; Special Needs Housing; Fair Housing; Universal Design; and Aging in Place  http://flipbook.wilmingtonnc.gov/pdt/policies/#64  Housing Loan Programs:  Loans to Homebuyers or Homeowners: Home Ownership Pool (HOP) and owner-occupied rehabilitation loan  Loans to Developers, Landlords: Rental rehabilitation incentive loan and affordable housing production/development loans  Units FY18 to date:  July 2017 – January 2019 completed or in progress:  Single Family New Construction: 3 NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 SPECIAL MEETING, FEBRUARY 21, 2019 PAGE 316  Multi-Family/PSH Units: 28  Homebuyer Mortgage/Down Payment Assistance: 23  Owner-Occupied Single Family Rehab: 10  Multi-Family Rehab: 52  Rental Rehab Incentive Loan: 2  Home Ownership Pool:  st Bank Partners (CCU, 1 Citizen, BB&T): $1,58,685  To date: 20 HOP Loans: $2,867,915  September 14, 2018 added DPA to HOP program  Housing Rehabilitation Options for Homeowners: program for homeowners living within the city limits to fix up their homes. Objective is to preserve affordable housing stock by providing an affordable loan for housing repairs to low-to-moderate income homeowners:  To date: $347,923 closed; two approved in January 2019; two acceptable bids; 11 in process  Rental Rehabilitation Incentive Loan Program: Intent of the program is to bring badly deteriorated or dilapidated housing units back into the rental housing stock:  Up to $125,000 per unit at 0% up to 360 months  Four borrowers pre-qualified; two loans approved $209,000  Housing Partners:  WHFD-Willow Pond Apartments: $665,674 HOME Investment Partnerships Program (HOME) funds:  Substantial rehabilitation of 40-unit multi-family affordable rental  Multi-year funding: $2.35 million project  CF Community Land Trust - Marsden Alley: $144,000:  Carry-over HOME funds  Construction Single-Family  Tammy Lynn Foundation – Beauregard Drive: $80,000:  CDBG: $700,000 project  Rehabilitation single-family house with four units Permanent Supportive Housing  Lakeside Reserve: $300,000 home:  $3.3 million project Construction Phase II  24 units Permanent Supportive Rental Housing (PSH)  CFHFH - $123,156 CDBG:  Down-payment assistance and infrastructure  Cape Fear Habitat will acquire lots or houses for redevelopment/rehab 6 homes for homeownership under Habitat model/financing  Carrying over $86,916 HOME funds  CFHFH/WARM: $128,335: Funds originally appropriated to CFHFH acquisition FY11-12 $203,880 and FY13-14 $105,000. Funds originally appropriated CFHFH/WARM FY12-13 $150,000 and FY13-14 $81,000.  Land Trust $21,757 to support housing delivery; note provided for conveyance of two foreclosed properties, with loans for rehab/reconstruction and 12% developer fee, plus any remaining sales proceeds  City has support start-up Land Trust with 4 plus years funding for admin. at $261,130  Land Trust and Habitat finalizing eight units at Gideon Point: HOME funds for acquisition at $220,000  CHDO Housing Partners: $132,885 Required 15% HOME set-aside:  AMEZ Housing Development Corporation: $180,000 carry-over HOME Funds:  Construction 909 Grace Street, Single Family  Cape Fear Regional CDC - $383,000 HOME funds:  th Major rehabilitation 1108 North 5 Avenue  Duplex Rental  FY19 Funding: Prior Year Total Available Revolving Loan FY19 FY19 HOP Federal $ 557,772 $ 100,896 $ 658,668 HOP General Fund $ 688,073 $ 60,000 $ 748,073 Owner-Occupied Rehab Fed. $ 1,061,699 $ 1,061,699 Owner-Occupied Rehab GF $ 105,134 $ 340,000 $ 445,134 Rental Rehab Incentive Fed. $ 286,255 $ 286,255 Afford. Housing Development Fed. $ 371,767 $ 990,927 $ 1,362,694 Total $ 3,070,700 $ 1,491,823 $ 4,562,523  Links to City of Wilmington Community Development and Housing Information:  Assessment of Fair Housing: https://www.wilmingtonnc.gov/home/showdocument?id=3433  HOP and Homeowner Rehabilitation Loan Programs:  https://www.wilmingtonnc.gov/departments/community-services/housing NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 SPECIAL MEETING, FEBRUARY 21, 2019 PAGE 317  Affordable Housing Development (Rental and Homeowner):  https://www.wilmingtonnc.gov/departments/community-services/affordable-housing- development  2018 HUD Income Limits: Wilmington, NC HUD % 2018 HUD Low Income Limits Metro FMR HMFA Area Wilmington, 1 2 3 4 5 6 7 8 NC HMFA Person Person Person Person Person Person Person Person Median: 100% $50,563 $57,750 $65,000 $72,200 $78,000 $83,750 $89,563 $95,313 $72,200 80% $40,450 $46,200 $52,000 $57,750 $62,400 $67,000 $71,650 $76,250 60% $30,338 $34,650 $39,000 $43,320 $46,800 $50,250 $53,738 $57,188 50% $25,281 $28,875 $32,500 $36,100 $39,000 $41,875 $44,781 $47,656 30% $15,169 $17,325 $19,500 $21,660 $23,400 $25,125 $26,869 $28,594 In response to questions, Ms. Rogers stated that part of her staff does oversee the programs and tracked how many are taking advantage of the programs. For the Housing Rehabilitation Option for Homeowners program, there are 11 applications in process and eight loans have been closed for a total of $347,923, two approved and two with acceptable bids. Since the storm, her office is experiencing some delay in getting bids because of the large demand for contractors. Programs are promoted through social media, grass roots outreach, working with churches, and other organizations to do presentations. For the Housing Rehabilitation Option for Homeowners program, a lunch and learn session is held with churches and organizations to target people who may be eligible. A brief discussion was held about there being plenty of applicants, but not all qualify for the program(s). Ms. Rogers explained that one of the challenges with this, especially with the homeowner rehabilitation program, is that the applicants have to have a clear title. Often people have inherited a home which is jointly owned and do not hold a clear title. This is part of the discussion during the lunch and learn sessions. Many applicants are elderly and discussion is held about the importance of planning and what it means to transfer a property. In response to questions about a financial literacy program, Ms. Rogers stated that for the homeownership program, the applicants are required to take a six-hour homeowner education class, they receive a certificate, and cannot apply for the program without that. Some banks will send people to participate in that program as well. Staff members also have their counseling certification. In response to questions about what occurs with owners after the 15-year window has passed, Ms. Rogers stated after the 15 years, owners can rent their property to whomever they want. During the 15 years, there is a restriction to rent the homes to lower income people at 80% AMI or below. Staff monitors the projects and provide annual information to the City. House visits are also done to make sure there are no violations of the note. A brief discussion was held about how a unit, when committed to affordable housing, has a time limit on it. Councilmember O’Grady stated there are two sides to all of this. The cash allows the development for housing that can be more permanently committed to affordable housing and that is the tradeoff. However, the bad side of it is the greatest source of developing wealth is homeownership. If a person buys an affordable house with a limit on how much they can earn from it, it’s never really going help build wealth built for homeownership unless the person can get their income up enough that they could move out and buy another house. Councilmember Rivenbark stated one of the great things about Willow Pond when it was developed was that the rents are not set based on income. A certain amount of the payment was set aside and over a period of three to five years, enough money was built up for a person to have a down payment. He is unsure if that is still the case. DISCUSSION OF ELECTED OFFICIALS REGARDING NEXT STEPS/PRIORITIES Mayor Pro-Tem Haynes stated that she would like to see the establishment of the permanent joint committee and hire a permanent person. The survey can be established once that is done. The permanent committee can provide both elected bodies guidance on how to move forward after the survey and receiving public input is done. Chairman Barfield agreed. In response to questions about the EDZD zoning and incentives or density bonuses, Planning and Land Use Director Wayne Clark stated the County can provide via the zoning ordinances incentives or density bonuses in exchange for affordable units if that is the direction of the Board. There is more to the mixed used districts than just the density bonus. The EDZD zoning has other challenges related to environmental aspects to a site and the type of site. County staff will be bringing forward this summer eight zoning districts that are basically city zoning districts that allow more diversity including the R-5 zoning. What is not provided in the first phase are County specific mixed use districts. Staff does not want to waste the Board’s time putting forward a district that no one will really use the incentive for. Right now, a majority of the County is zoned for 2.5 units per acre or less. Since Mr. Clark started with the County, most people are not going over five units per acre. He thinks the City would not see those as high density, but the County considers those as high density special use permits. It is not something that can be done quickly, but again, it can be done if that is the direction of the Board. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 SPECIAL MEETING, FEBRUARY 21, 2019 PAGE 318 A brief discussion was held about the proposed project on Hooker Road. In response to questions, City of Wilmington Planning, Development, and Transportation Director Glenn Harbeck stated that regarding the Hooker Road development, the City’s comprehensive plan calls for density, but not just anywhere which is a problem. One of the biggest concerns heard in the city is traffic. If the City approves high density projects anywhere and they are not near services, transit, bike paths, or any reason for people to just get in their cars to drive everywhere, it exacerbates the traffic problem. While the City staff likes density, and good density is offered in the City limits, it does not get approved for just anywhere. He knows the County tried in recent years to relax its accessory housing standards. However, it did not get as much traction as hoped and he does not believe it went forward but thinks it is coming back again. In a presentation he recently made to City Council, he believes accessory housing can be a big benefit to some of the affordable housing issues. For example, a homeowner in Forest Hills recently asked him for an update on the average rental rate for a garage apartment in that area, which is about $800 per month. Although it is not a two-bedroom apartment, if you do the math of 30% for someone’s household income, that is somewhat meeting the affordable housing threshold. In response to questions about equating density with affordability, Mr. Harbeck stated the biggest difference in our region is land cost. Labor cost in Pender, Brunswick, and New Hanover counties are all the same. Material cost in those counties are all the same as well. There will be a relationship between density and affordability. In looking at projects with high density, all factors of density have to be assessed. High density housing will continue to add to the traffic problems if there is not some relationship to services. In regard to the proposed project on Hooker Road, Councilmember Rivenbark stated there is already a mobile home park on the property so there is already high density there. If the City’s plan did not work, the City needs to quit playing because that was going to be, and hopefully it can be more workforce housing there. If the project had come before the City Council, he would have been in favor of it. These neighborhoods need to be walkable and likable, but the concern is very focused on cars. Hooker Road is a connector street to Wrightsville Avenue and the neighborhoods surrounding UNCW. The project would have replaced an existing high density development and is a missed opportunity. Mr. Harbeck stated that he does not think the project is completely done and it is still under discussion. City staff supports Councilmember Rivenbark’s statements, but is trying to find the correct the balance between what is compatible with the neighborhood and good for the density. Councilmember O’Grady stated he thinks the committee would agree that land cost is the biggest impediment to affordable housing. He thinks that is why funding is a large portion of the recommendation because that is the accumulation of money to subsidize the land acquisition so an affordable house can be built. In the end, finding a way to fund it is where government does its best. The City already has someone who wants to give it money and the City should accept it. However, ways need to be found to incentivize people who come forward to have them be willing to make contributions to that. The City should revisit density incentives as the only ones available are downtown. Mr. Harbeck stated that City staff has done a density analysis of recent developments in the City. It was discovered that the City is offering more density than it wants and it is difficult to offer an incentive when densities that are already available are not being achieved. The market does not demand the level of density being offered. As such, building is done below the density, which is a challenge. In looking at the new land development code, one item staff is exploring is a modification to multifamily districts to have what is called an opt-in district which is utilized in Charleston, SC. An opt-in district is where if a developer wants that extra density, they opt in voluntarily. Under North Carolina state law, extra density cannot be required but it can be made available as an opt-in district. In response to questions, Mr. Harbeck stated that contributing to an affordable housing fund is part of this type district. The Charleston opt-in district either provides affordable housing or a fee can be paid in lieu of it. Councilmember O’Grady said in his opinion the money provides more flexibility and longer-term affordability. In regard to Project Grace, Chairman Barfield stated he would like a conversation to take place with the developer about affordable units being included in the residential portion so that the average person can afford to live downtown like everyone else. While it may not gain traction with the developer, it is worth the time to discuss it. Also, the County Manager has been given direction to dispose of the 15 acres of land in the Wrightsboro area off of Castle Hayne Road. It would be a good move for the County to partner with the developer, rather than selling the land, to find a way to put in some type of urban mixed use with affordable units built into it. There is a general statute that says under the procedures and standards established by the county, a county may convey property by private sale to any public or private entity that provides affordable housing to persons of low or moderate income. The county shall include as part of any such conveyance covenants or conditions that assure the property will be developed by the entity for the sale or lease to persons of low or moderate income. In this case, the County may be heading towards the conversation and was going to dispose of the land anyway. If the County can partner with the developer, sell it at a low cost and let those dollars be transferred to the buyer, it will be similar to a situation like what occurred with the old Dove Meadows development. It would provide the County the ability to help with the affordable housing conversation and also put the County in the game. The Board can consider the proposal at an upcoming meeting. Commissioner Zapple said he is in absolute agreement. Commissioner Kusek stated there is a need to look for ways to do this kind of thing. While she understands the conversation about the transportation, she thinks the focus needs to be on one thing at a time. The committee put forward the recommendations two years ago. She wants the elected bodies and staff to put something together to move forward on what is possible to make some progress and meet again for more discussion. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 SPECIAL MEETING, FEBRUARY 21, 2019 PAGE 319 Mayor Saffo stated that there is approximately 2,000 acres left in the City. Most of it is near River Lights, the Cameron property, and near Independence Drive and Shipyard Boulevard. It’s already under development and very expensive. The obvious issue is the establishing of a housing fund. Regardless of what it is called it is subsidized. It will be a challenge to get it from a developer. If everyone here is really serious, then it has to be put to the vote of the people and put it up for a bond because it will survive the political winds. There seems to be a lot of support for it, but if not the people will turn it down. He further stated that there must be a housing study as well as the establishment of a permanent committee in order to sell it to the general public. Chairman Barfield stated that he agrees with Mayor Saffo in that the housing study is needed to obtain the specific numbers to show the community what is needed and how it is needed. While volunteers are great, a funded staff position is needed for this. There also needs to be support for a public campaign because of the misinformation in the general public. He understands the challenges in the County and City. He does believe in the accessory structures and it is a fast way to do the things being discussed today and there will be other challenges to that. He looks forward to that discussion when it is brought forward. He believes there are particular things that all can agree on and if the group can leave today’s meeting with those action items being taken on, then movement can be taken to another phase. He would like to have agreement on these items and then reconvene to discuss the funding, which is the big thing if a dent is going to be made. Commissioner Kusek said the staff person, the study, and the public campaign have to be funded and it should be decided today who funds what and the people who can make those decisions can do it during this meeting. The permanent committee does not need funding. In response to questions, County Manager Coudriet stated that the County is in a position to proceed with hiring a staff person using the money the Board has appropriated. The County can work with the City Manager’s office to develop a resolution to bring forward and establish the permanent committee. One of the first tasks for the staff person and the committee would be to move forward with developing the study and public opinion survey. He thinks those two items can be accomplished by the Spring. From a staff perspective specific to the Board, once a staff person is identified, staff can bring forward a proposal consistent with what the Board outlined about the disposition of Wrightsboro Park. It is a policy decision the Board has already made. From a staff perspective, the Board already has money in movement and he thinks between his office and the City Manager’s office, staff could quickly accomplish what has been identified by the two elected bodies. Chairman Barfield asked if there was general consensus by the Commissioners present to move forward on the four items identified during this meeting. In response to questions, County Manager Coudriet stated that the County can make funds available for the public awareness campaign. If that is the will of the Board, staff can make those changes now, whether it is all of that cost of half of that cost. He is unsure how the City works in terms of appropriating. By general consensus, the Commissioners present agreed to moving forward with establishing a permanent joint housing advisory committee, working on a housing study, funding either jointly or in coordination with the City a public awareness campaign, and funding a permanent staff position. Chairman Barfield stated it would be good to have some shared expenses. In response to questions, City Manager Cheatham stated he recommended the City Council proceed with its normal practice of considering an enabling resolution validating the direction on the four items discussed at an upcoming meeting. City staff can bring it forward at the next Council meeting. County Manager Coudriet stated if the Board makes the direction today, staff would not need to bring something forward at an upcoming meeting. From the County side, it would be a directive to move forward now with the County’s cost share. Councilmember Rivenbark stated in regards to the ideas being shared in the community for workforce/affordable housing, he wants to know who people go to and how do people share their ideas. It needs to be known and shared. Chairman Barfield stated he appreciates today’s meeting being held and the discussion. As he stated earlier, the County raised the minimum wage for its employees to $31,000. There is not a house in the County where a single County employee can go out and buy based on that income, unless it’s something they will have to put a lot of money into to make it livable. County and City officials have participated in three intercity visits with the Chamber of Commerce. What he has learned particularly in Charleston, is that people drive into the city from 45 or 50 miles away because they cannot afford to live in Charleston proper. The same is happening here in New Hanover County as people cannot afford to live here, whether in an apartment or house. From an economic development standpoint, when companies look at our community, one thing they are looking at is housing affordability. They may choose to go to another community based on housing affordability. Mayor Saffo confirmed with City Manager Cheatham that he has direction. City Manager Cheatham confirmed that he has direction. Mayor Saffo thanked everyone for attending as this is an important issue for the community. In regard to the Garner Report, both elected bodies approved a number of the recommendations, but there are some recommendations where action has not been taken as of yet. He would like to reconvene at some point to discuss the remaining portion of the Garner Report. Chairman Barfield stated he was in agreement to having NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 SPECIAL MEETING, FEBRUARY 21, 2019 PAGE 320 another meeting on this front. Mayor Saffo asked the County and City Managers to choose a date to have the discussion about economic development as it is also an important issue for the community and citizens. ADJOURNMENT Hearing no further business, Chairman Barfield and Mayor Saffo thanked those attending the meeting and adjourned at 4:48 p.m. Respectfully submitted, Kymberleigh G. Crowell Clerk to the Board Please note that the above minutes are not a verbatim of the New Hanover County Board of Commissioners meeting.