To Marciaa Walker, her new place in downtown Raleigh is a blessing. It's a brand-new, three-bedroom apartment that she can afford, first of all, and it's big enough for her and three of her grandchildren, all boys, who live with her. It's in an up-and-coming neighborhood just a couple of blocks southeast of City Market and Moore Square.
"I was in a rooming house that was terrible," she says. "Everything around it was trouble."
Walker's new home is Carlton Place, a good-looking mixed-use, mixed-income development with 80 apartments and 4,500 square feet of commercial space developed by DHIC, the nonprofit Downtown Housing Improvement Corporation. Its grand opening one sunny morning last week drew a big crowd of smiling dignitaries, including Wake County Commissioners Chairman Tony Gurley and Raleigh Mayor Charles Meeker, who called the project "something the whole community can be proud of."
Proud, and maybe a little wistful? Carlton Place was 30 years in the making, from the beginning of land acquisition by the city in 1976 to the request for proposals it issued to prospective developers in 2001 to completion in 2007. And according to DHIC President Gregg Warren, as much as everyone loves it, unless city policies change it may be the last affordable housing built in downtown Raleigh.
Why is that?
"Well, where is the land for it, is the first question," Warren said in an interview recently. "Second, how much does it cost? And thirdly, is there really the will [on the part of city leaders]?" Because if there isn't, Warren warned—and it was a warning he repeated as he wrapped up the festivities at Carlton Place—downtown will become "an enclave for the very well-off."
There's no doubt land is dear in downtown Raleigh, where construction cranes dot the skyline and a single acre these days can sell for $3 million or more. Lots near downtown, like the ones assembled for Carlton Place, used to go begging. Now, they're a hot commodity. So hot that the Downtown Raleigh Alliance, a business group, recently felt compelled to correct the impression that only "million-dollar condos" are getting built. Just a myth, it said. The average downtown condo sold last year went for $253 a square foot, and an average unit was 1,334 square feet, making the average price a mere $337,640.
What made the affordable Carlton Place possible, by contrast, was that the city gave DHIC a 2-acre tract of land for free, after which the city, county, state and federally chartered housing agencies generously subsidized the $10.3 million development cost. The various subsidies allow (and require) DHIC to offer a wide range of rents depending on the tenant's income, with the lowest—a one-bedroom apartment for someone whose income is 30 percent or less of the region's median—set at $330 a month.
Most of the apartments are subsidized, but 16 are market-rate rentals that range from $700 a month for a one-bedroom unit to $1,100 for a three-bedroom. The commercial space is available at market rents.
Walker, who was a chef before a crippling fall forced her to live on a disability check, is further subsidized by the state and pays just $134 a month for her apartment.
The various subsidies aren't easy to assemble, but the real sticking point for affordable housing these days is the land. The city isn't buying any more downtown tracts, Warren says, nor is it requiring developers there to include affordable units in their for-profit projects, as some other cities do. As escalating land prices push up the cost of the first approach, he thinks, it's time for Raleigh to adopt the second one.
"The city has created a lot of wealth (for) condo developers," Warren says, with its investments on Fayetteville Street and other downtown improvements. "What is the city asking from them in return?"
DHIC is a city-chartered organization (five of its 15 board members are appointed by the city council), but it has no authority to require developers to include it in a for-profit project, and Warren's efforts to get developers to do so voluntarily have fallen on deaf ears. "They run away as fast as they can," he remarks.
The result: With the exception of Carlton Place, the so-called downtown housing group's projects are going up on the fringes of Raleigh and in Cary, Apex, Garner and Wake Forest.
Meanwhile, the city itself has passed on the chance to require affordable units in its own favored projects, Warren notes. For example, when the city took down the old Civic Center on Fayetteville Street, it created the so-called Site 1, opposite where the new Convention Center hotel is going up. The city council invited developers to bid on it, and signed an agreement with a consortium last year that calls for a mixed-used project, 20 stories tall, with retail spaces and high-end condos—but no requirement for any affordable units.
"It was a missed opportunity," Warren says. "They could have mandated (affordable units) and let the developers figure out how they could include them. But they didn't."
Nor is there any move by the council to adopt an "inclusionary zoning" rule that would force developers to mix expensive and less-expensive units in their projects. When Councilor Thomas Crowder raised the subject three years ago, it was shunted to a committee, where it continues to languish for lack of majority support.
"Why do we continue to segregate affordable housing from market-priced condos?" Crowder asks. "We should be integrating the two—especially in high-rise buildings where, from the outside, they would all look the same."
In October, the Council did revise its downtown district zoning rules, and called for developers, if they were getting "density bonuses" (and they all are), to include 10 percent "affordable" units in their projects. The standard for affordability was easy—it was set at 80 percent of median income—but even easier was the "out" developers were given: They can pay $100,000 into the city's housing fund instead.
In other words, a developer building 100 units in a high-rise doesn't have to make any of them affordable, by any standard, if he kicks in a sum equal to less than the cost of one subsidized unit somewhere else.
Defending this approach, Planning Director Mitch Silver said it was an improvement on the old language in the zoning code. It "encouraged" developers to include affordable units, and allowed the city council to require them as a condition of any upzoning. In 20 years, Silver deadpanned, no such units were ever built, because the council never used its authority.