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HomeMy WebLinkAboutWHAC 2024 Annual Report - FINAL 2024 Annual Housing Report 2 MESSAGE FROM THE COMMITTEE Since the establishment of the Joint City of Wilmington/New Hanover County Workforce Housing Advisory Committee in 2019, the committee has presented information and recommendations to the City Council and Board of Commissioners on an annual basis, in keeping with our original purpose of studying, presenting information, and making advisory recommendations related to workforce housing. This year, for the first time, we are presenting in January to better inform the upcoming budgetary process. As in past years, our recommendations fall into five buckets: Funding, Policies & Legislation, Diversity of Housing Supply, Programs, and Education. The recommendations we have made are the result of thoughtful consideration and debate among the members of the Committee, with a shared understanding that any effort to adequately address our local housing crisis will require both substantial investment and a multifaceted approach. We understand there are many ways to approach the affordable housing crisis in our community, and the problem can seem overwhelming. That’s why we developed a strategic plan to help guide our recommendations and the committee’s work plan. This strategic plan was developed based on the findings of the comprehensive housing study and survey, best practices from around the country, and feedback from our providers. We look forward to continuing to work with both the City and the County in the coming year to support the development of workforce housing in our community. Committee Members Sharm Brantley, Chair Tom Gale, Vice-Chair Erica Barnett Liz Carbone Krysti Keser Eric Knight Katrina Knight Morgan Moskal Frank Smith Paul Stavovy Edwrin Sutton Roxie Wells *For the purposes of this committee, Workforce Housing is defined as housing that is affordable to households earning up to 120 percent of Area Median Income (AMI). 3 4 RECOMMENDATIONS: FUNDING Over the past several years, both the City and the County have increased funding in workforce housing, both through local dollars and the dedication of American Rescue Plan (ARP) funds. These efforts have contributed to the local housing supply, but much work is still to be done to leverage funds, coordinate with new partners, such as the New Hanover Community Endowment, and support the range of housing projects needed by the community. 2023 Recommendation This past spring, the committee recommended the creation of a fund specifically for gap financing and/or funding of affordable housing development projects to augment the limited funding currently offered by the City and County. The fund was recommended to be accessible on a rolling basis and available to support affordable housing development projects. Update: While prior funding commitments for workforce housing were kept, City and County FY 2023-2024 budgets did not include a new affordable housing development fund. The City and County continue to identify opportunities to leverage existing funds in coordination with local partners, including the New Hanover Community Endowment. New Hanover County and City of Wilmington funding have made projects such as Starway Village, Canopy Pointe, and Habitat for Humanity’s Blendin Meadows possible. 5 2024 Recommendation: Work with Partners to Develop a Substantial, Coordinated Funding Structure With the support of the New Hanover Community Endowment, funding opportunities from the federal government, and private sources of funding, our community has the opportunity to develop a substantial, coordinated fund committed to workforce housing. This type of initiative will allow for investment in a variety of projects not currently supported by existing funding sources. Current funding constraints limit the ability to invest in the full spectrum of workforce projects possible. For instance, existing funds do not allow for a revolving fund for gap financing and property acquisition. In addition, the City and County both have constraints on the types of projects that can be funded due to statutory limits and programmatic requirements. This limits the ability to invest in pre-development costs. Allocated funding should also allow for a variety of mechanisms—whether a loan or grant makes more sense depends on the project. Our recommendation is that the emphasis should be on increasing affordability for residents and the number of affordable units on the ground, not on having repayments supplementing the fund. 6 2024 RECOMMENDATIONS: POLICIES & LEGISLATION Over the past several years, both the County and City have reduced barriers to affordable housing through amendments to each of their development codes. Opportunities to better support affordable residential options at the local level still exist, however, as well as ways for state legislation and funding to further those efforts. 2023 Recommendation The committee recommended implementing local policy and advocating at the state level to expand existing housing protection laws, programs, and regulations to a larger demographic. Additionally, it recommended the continued pursuit of land use changes to support diversity in housing options. Update: • The City of Wilmington Planning & Development Department continues to assess the Land Development Code for barriers to housing affordability. • The New Hanover County Planning & Land Use Department will be incorporating housing policy recommendations into the Comprehensive Plan Update that will commence in 2024. Policy recommendations may also result from the City of Wilmington Greater Downtown planning initiative. New Beginning Church’s Covenant Senior Housing project, which recently broke ground, was awarded gap funding from the state’s Workforce Housing Loan Program in addition to local funding. 7 2024 Recommendation: Continue to Pursue Policy Changes at the State & Local Levels to Support Housing Affordability While much of our focus on policy changes over the past several years has been on local ordinance amendments, without supportive policies and funding allocations at the state levels, the ability to advance the County’s and City’s work is limited. This past year, the state legislature considered several bills related to housing affordability that will likely be discussed again this next legislative session related to housing stability, subsidy, and supply, including legislation that would expand eligibility for property tax relief. We recommend that both the City and County consider including the 2024 North Carolina Housing Coalition’s legislative agenda as part of each of their legislative work this coming year, as well as specifically focusing on efforts to restore and increase the state housing trust fund. At a local level, we continue to recommend implementing methods of reducing costs for affordable development in local development review processes, including zoning changes, adopting by-right affordability incentives, reducing costs of the entitlement process, fast tracking project approvals, and implementing tools to encourage a percentage (20% is recommended) of affordable units in projects. One straightforward way to do this is to require source of income protections for any project supported by local funding; it could also be required as a condition of residential zoning changes. Source of income protections ban the outright denial of Housing Choice Vouchers in rental units, ensuring that these valuable tools can be utilized to increase access to housing options for our lowest income renters. To be successful, source of income protections should also include a parameter that allows for the value of the Housing Choice Voucher to count toward a potential tenant’s total income on a residential application. In addition, with both the County and City planning departments working on major planning initiatives (the NHC Comprehensive Plan Update and City Greater Downtown Plan), we urge these initiatives to focus on housing affordability and reducing development costs, include input from this committee, and engage with a diverse group of residents and housing providers. 8 2024 RECOMMENDATIONS: DIVERSITY OF HOUSING SUPPLY While the focus of this committee’s work is housing affordable to the County’s workforce (those earning between 60% - 120% Area Median Income (AMI)), we understand that a diversity of housing options is ultimately necessary in order to ensure a housing system that supports the needs of our middle income earners. Efforts to improve the diversity of housing have been a focus of this committee’s works, as well as that of the City and County, for the past several years, as the type of housing someone needs at one point in their life is different from what they might need at another stage. 2023 Recommendation The committee recommended policies and expanded funding to incentivize the production of a variety of housing types attainable for a variety of income levels. Specific ideas included infrastructure investments such as water and sewer, supporting non-profit organizations in their affordable housing goals, supporting rehabilitation of existing housing stock through programs or policy, land conveyance, and allotment for an increased diversity of housing types by right. Update: • New Hanover County has continued work on the “Last Frontier” water-sewer infrastructure project, which will bring needed main lines to support development of the northern part of the unincorporated county. Design work is anticipated to be completed this fiscal year, with construction complete by the end of 2025. • New Hanover County included $3 million in funding for the second year of the Workforce Housing Services Program (WHSP), and funding for recovery housing support for individuals in treatment and recovery were included in the Opioid Settlement Funds strategy. WHSP funding will support a senior housing low-income housing tax credit project as well as Habitat for Humanity’s Legacy Landing. • The County and City of Wilmington coordinated to convey two jointly owned properties for affordable housing. • The City of Wilmington supported non-profit housing production for Cape Fear Community Land Trust, continued Home Ownership Pool (HOP) Rehabilitation Loan Program and Owner-Occupied Housing Rehab Loan Program, and completed the HOME-ARP plan to allocate $2.1 million for the production of permanent supportive housing. • The City of Wilmington held workshops on using the Rental Rehab Incentive Loan for accessory dwelling units (ADUs). Mixed housing type development patterns seen in this area historically are rare in new developments. 9 2024 Recommendation: Support the Preservation of Existing Housing and Production of New Mixed-Type and Mixed- Income Development The committee recommends that the City and County work over the course of 2024 to fund, support, and expand existing programs to support the preservation of existing affordable housing supply. The City’s rehabilitation loan programs, and the County’s recent funding allocation to WARM for owner-occupied rehabilitation are important efforts, but attention to preservation should go hand-in-hand with the work being done to increase the number of units on the ground. Due to our constrained housing supply, homes that are now affordable to the workforce may not be in a few years—either due to market forces increasing home prices or deteriorating condition caused by deferred maintenance. In addition, while new housing units are needed at all income levels, we recommend the City and County develop tools and strategies to better support mixed-type and mixed-income housing in residential development projects. As a first step in this direction, we recommend the two elected boards hold a roundtable discussion, along with their Planning Boards, to develop a coordinated approach to reducing barriers that are keeping residential developers from incorporating the needed mix of housing within projects. The ultimate goal would be to identify, and come to a common understanding on, what would be needed so for-profit and nonprofit projects can provide affordability and diverse housing options. We also recommend now that barriers that had prevented ADUs have been reduced or removed from both jurisdictions’ codes, additional steps be taken to support the construction of and simplify the process for developing more of these units. One best practice would be to identify build-ready models for ADUs, similar to Raleigh’s program that provides residents with free plans that allow them to bypass the permitting process. 10 2024 RECOMMENDATIONS: PROGRAMS The City and County have implemented and expanded a variety of programs over the past few years to promote workforce housing, dedicating staff resources as well as funding to further goals for affordability. This ongoing work of local government staff plays an important role in supporting the work of housing developers and local service providers. 2023 Recommendation In recognition of the benefits provided by a substantial infusion of state and federal funds over the past five years, the committee recommended directing additional local dollars to continue the successful programs, projects, and organizational functions that have been funded, including support for specific housing projects (Habitat for Humanity’s Haven Place, Eden Village, Starway Villages, etc.), New Hanover County’s rental assistance programs, and the City of Wilmington’s Rental Rehabilitation Program. Update: • The City of Wilmington’s FY 2023-2024 budget continues one cent ($2.5 million) for affordable housing policy to support gap financing and loan programs in addition to federally funded programs that served 9,366 households. • The New Hanover County FY 2023-2024 budget continues $3 million in funding allocated for workforce housing and has been allocated to projects and programs serving 152 households and families. City of Wilmington and New Hanover County administer programs that directly assist residents in addition to providing financing for workforce housing projects. 11 2024 Recommendation: Focus on Residents When Investing in Programs While the committee still recommends replacing one-time funding opportunities so that the successful programs, projects, and other work of the past few years can continue, we would like to emphasize the need for efforts to support residents. A large amount of the funding that has been allocated recently has focused on housing supply, and while that continues to be an important need, that work does not necessarily meet the immediate needs of New Hanover County’s citizens. Many people are still experiencing a housing crisis because they cannot afford the existing supply. We recommend that funding is identified to continue the County’s gap rental assistance program, along with other community-supporting initiatives that were financed by the American Rescue Plan (ARP) dollars. We also recommend that the flow of funding for the County’s Workforce Housing Service Program and other local resources be increased to better support residents’ ability to afford housing. Funding is not the only strategy, however. We encourage both the City and the County to identify and implement innovative measures so existing housing can be more affordable to residents, such as providing incentives for landlords to set affordable rent rates. 12 2024 RECOMMENDATIONS: EDUCATION One of the core responsibilities of this committee is to educate the public on issues related to affordable workforce housing. We cannot do this work without the assistance of the County and City—we rely on existing programs, data collection, and communications to fulfill this mission. 2023 Recommendation The Committee recommended expansion of housing counseling programs to encourage and support homeownership. Update: • New Hanover County’s Workforce Housing Service Program will include a rental assistance and housing counseling program run by New Beginning Christian Church. • The City of Wilmington established a HUD Certified Housing Counseling Program, and in the period of January – September 2023 served 194 individuals attending group workshops and 95 individuals participating in one-on-one housing counseling sessions. City of Wilmington Community Development staff held several educational events over the course of the year, such as the Affordable Lending Fair and the “Understanding Credit” workshop. 13 2024 Recommendation: Improve Collection of Data and Communication of Existing Programs Continued expansion of this past year’s work in fair housing, housing counseling and financial literacy programs, even to students from middle school through college, remains a priority, but this year, the committee has identified an additional area to highlight—the need for better data and communication. We recommend that the City and County bolster efforts to track data so the success of initiatives and programs can be better evaluated. This includes an updated and expanded Housing Needs Assessment— this coming year, the qualitative analysis last conducted in 2020 should be updated and can inform the City’s and County’s planning initiatives. However, it should also include regular tracking of program data, number of affordable units created, the community impact of programs, and the status of current affordable projects’ remaining period of affordability. Residential projects with an affordability component commonly have various windows of affordability, which—unless extended—expire so the units become market-rate. Tracking information on periods of affordability and when they end would allow us to proactively plan for impacts to the community’s affordable housing supply. More can also be done to increase the public’s knowledge of existing programs that are already available. For instance, few people know that the Teacher Next Door national homebuying program offers downpayment grants for teachers, nurses, law enforcement, and other public service professionals. Resources could also be provided to promote the creation and conversion of accessory dwelling units (ADUs). This information, as well as the data mentioned previously, can be published on a web-based housing data platform shared by the two jurisdictions so citizens have a one-stop shop to get the information they are seeking. Finally, the committee would recommend identifying how to improve communication and opportunities for engagement between this committee and the two elected boards. The joint meeting recommended previously could be one opportunity, but other communication methods could also help to better align our work and efforts. We intend to participate in upcoming City and County planning efforts but are open for more regular ways to share information and support to the boards. 14 2024 RECOMMENDATIONS OVERVIEW FUNDING Work with Partners to Develop a Substantial, Coordinated Funding Structure • Develop a housing fund by leveraging local, federal, and private sources so diverse initiatives, such as land acquisition and donation, rolling gap financing, and pre-development costs, can be supported POLICIES & LEGISLATION Continue to Pursue Policy Changes at the State and Local Levels to Support Housing Affordability • Include NC Housing Coalition’s 2024 legislative agenda as part of City and County legislative work, focusing on efforts to restore and increase the state housing fund • Reduce costs for affordable housing in development review process • Encourage mixed-income projects and require source of income protection for projects using public funds • Include housing affordability and reducing development costs as a focus of County and City planning initiatives DIVERSITY OF HOUSING SUPPLY Support the Preservation of Existing Housing and Production of New Mixed-Type and Mixed-Income Development • Fund, support, and expand programs to preserve the existing housing supply • Develop tools & strategies to better support the production of mixed-type and mixed-income projects • Hold a joint County-City elected board roundtable discussion with both Planning Boards and the development community to coordinate on strategies to remove barriers to including housing diversity and affordability in residential projects • Encourage the construction of and simplify the process for developing accessory dwelling units (ADUs) PROGRAMS Focus on Residents when Investing in Programs • Continue funding successful programs and projects to support residents with local dollars, such as the American Rescue Plan (ARP) funded workforce gap rental assistance program • Identify and implement innovative measures to make existing housing more affordable EDUCATION Improve Collection of Data and Communication of Existing Programs • Continue expansion of housing counseling and financial literacy programs • Bolster efforts to track data and expand next Housing Needs Assessment update to include statistically significant qualitative study • Develop a shared housing data web platform to serve as resource for the public • Improve communication between this committee and the elected boards