Name as it appears on the ballot: Steve Schewel
Party affiliation, if any: Democratic
Campaign website: steveschewel.com
Occupation & employer: Visiting Assistant Professor of Public Policy, Duke University
Years lived in Durham: 45
1) Given the current direction of Durham city government, would you say things are generally on the right course? If not, what specific, major changes you will advocate if elected?
Yes, I think the direction of Durham City government is generally on the right course. That is, the City is extremely well run by City Manager Tom Bonfield and his staff. The basic City services are delivered very well from trash pick-up to fire protection to the vast amount of work being done to upgrade and replace old water and sewer lines to road re-paving.
In addition, the City is exceptionally well managed financially. It is one of only 34 cities in the nation with a AAA bond rating from all three agencies. In the past fiscal year, expenses finished $6 million under budget and revenue was $6 million above budget, with every department coming in under its expense budget.
The council just gave Tom Bonfield a five-year contract extension, and I supported that wholeheartedly.
The challenge is now to expand beyond what our City government, and most City governments, define as their basic tasks. That is, we have the basics covered and purring along. Our challenge is to facilitate the development of affordable housing in Durham; play a leading role – along with the schools and Durham Tech and the County government – in the formation and implementation of a comprehensive strategy for youth; join with other agencies in improving our community’s employment programs for youth and adults; and work with the courts, the sheriff, the County and others to divert low-level misdemeanor offenses from the courts and into an alternative system of remedy, treatment and support. None of these are what most City governments that are not of the “strong mayor” type would define as core activities. But we need to expand our idea of what City government does to these areas, all of which involve cooperation with the County and other entities, and we need to help lead these efforts.
The other major change that is needed is a change in Durham’s policing strategies and accountability, and I will discuss that in the questions below which are geared towards that specific subject.
Finally, there are many smaller changes that are needed, many of which are in the pipeline now. In this sense, our City government is constantly evolving to take on new work.
Here are a couple examples: (1) I have been advocating for the past three years to do a “waste characterization study” to figure out what is going into our landfill that could be recycled. That study is in the budget this year for $70,000, and it will help us know what we are landfilling that we could be recycling instead. (2) I have also been advocating for replenishing our tree canopy, especially in low-income neighborhoods where the canopy is much less full. At my request, the City-County Environmental Affairs Board did a preliminary study of the need and recommended that the City plant 1650 trees per year in order to keep up with the tree canopy needs just in the public rights-of-way. The City staff is now looking at this in more detail and will be coming up with recommendations for the council to consider.
There are many more examples of what we ought to change in City government. These are just two. But these opportunities for positive change come up all the time, and it is part of my job on city council to help them come to fruition.
2) Please identify the three most pressing issues the city faces and how you will address them.
First, we must make sure that the city we love is a city for all. The harsh underside to Durham’s recent prosperity is that thousands of people—overwhelmingly African-American and Hispanic—are poor, jobless, and now increasingly priced out of their central-city neighborhoods. To improve their lives, we must keep affordable housing at the top of our agenda, train our residents for good jobs and connect them to those jobs, create a bus and light-rail system that makes employment around our region accessible to all, and ensure that every neighborhood is a safe neighborhood. I have detailed more about many of these challenges in the questions below, especially including housing, jobs and public safety.
Second, we need to grow in such a way that we enhance rather than diminish our wonderful small-city quality of life. We need to preserve open space and parkland, protect our neighborhoods from commercial encroachment, prevent the deterioration of our air quality, provide a plentiful future source of safe, clean drinking water, keep pace with our infrastructure needs, and construct the sidewalks, ball fields, bike lanes and trails that will make Durham a happier and healthier place to live.
Because none of the questions below speak to this point, let me detail more about it here.
We need a mobility strategy for the next 50 years. We must provide an inexpensive, efficient bus network for our 22,000 daily riders, and we must push the 17-mile Durham-Orange light rail project over the finish line for federal funding. Since there is no specific question about the light rail system on the questionnaire, I want to address it here. Even as we pressure Wake County to join the regional rail system, we must complete this first leg in the next decade, and we can do it. I hear some rumblings about waiting for Wake to join us before we go through with the current light rail plan. This would be the mistake of a generation. Durham is in line now for federal funding—fighting for our place in line—and we must not get out of line. Voters in Durham and Orange have spoken with resounding majorities to tax themselves for light rail and buses, and this tax will pay for a quarter of the cost of construction. The state of North Carolina has already pledged another ten percent of the cost. If the federal government comes in with its half of the funding, we are almost there. In addition, the successful Charlotte light rail line has an operating funding model very similar to Durham’s, and it is operating successfully both in terms of ridership, which far exceeds original estimates, and in terms of its finances. As light rail projects in Baltimore, suburban Washington and Minneapolis are encountering problems and dropping out of line for the federal dollars, now is the time for us to step up with strong, unanimous support for the light rail plan. GoTriangle has done a terrific job of educating the public about the plan, doing the 15%-engineering, and transparently facing the difficult choices about route and station alternatives. We’ve got to push this forward.
We also need to build the $15 million worth of sidewalks budgeted in the capital improvement plan. The council has prioritized this spending, and I will work hard to get these sidewalks built over the next five years.
We must improve our trails, bike lanes, parks, ballfields and tree canopy. Durham lags far behind the top cities when it comes to trail miles, bike infrastructure and ballfields, and we must fund and build them all over town. We are also losing our tree canopy to age and development, and we need a public-private effort to replace the canopy and make sure that every neighborhood has the benefit of a vibrant tree canopy.
We must give continued attention to basic City services and infrastructure. We are fortunate to have an excellent city manager who has led the City to provide a high level of basic services cost effectively. At the same time, through the council’s directives, we are making good progress in funding and building out our critical infrastructure. The council has decided to fund street repair at a level that will keep streets at their current high level of paving, and that includes a $2 million allocation this year. We are committed to significant new funding for sidewalks (see above). We are spending $80 million per year to upgrade our water and sewer infrastructure and operate the facilities that treat our waste and bring us plentiful, safe, clean drinking water. During the time I have been on council, we have made great strides in these areas. As Durham grows, there is going to be more and more pressure on our infrastructure and services. We’ve got to keep pace, and that means spending money to do it. If we don’t do these basic things extremely well, then nothing else we do will matter.
Third, we need strong council oversight of our police force to ensure its accountability. I will continue to work towards a police force that actively seeks to win the trust of our entire community, engages in true community policing, enforces the laws free from any racially discriminatory effects, and does the top-notch crime-fighting work that our residents need and demand. Again, I have written in more detail about this in response to the questions below.
3) What in your record as a public official or other experience demonstrates your ability to be effective as a member of Council? If you’ve identified specific issues above, what in your record has prepared you to be an effective advocate for them?
I have served one four-year term on the city council. I also served one term on the Durham Public Schools Board of Education where I served two years as vice-chair of the board. So I have significant local government experience. I also serve as the city council liaison to the Durham Housing Authority, the Recreation Advisory Commission and the Durham Open Space and Trails Commission—all bodies which have direct relevance to the issues I have outlined above. I am also a member of the City’s Audit Oversight Committee which has given me a birds-eye view of many City departments and their finances.
I have also run a small business, the Independent (now Indy Week) for 29 years, and helped lead another one, Hopscotch Music Festival, for five years as well. I know how to read balance sheets. I understand personnel management from personal experience with it. I understand the needs of business.
Finally, I have been deeply involved in the civic life of my community, Durham, for more than four decades. I have served on many civic boards. I chaired the committee that wrote the final report on merging our City and County schools in the late 1980s for the successful School Merger Task Force. I served on the Blue Ribbon Commission for Durham High which ended up helping to establish Durham School of the Arts. I chaired the Durham Tech Foundation Board and served on it for 21 years.
I have mentored many young people: For 18 years I coached youth soccer from the YMCA through club soccer and on to the varsity at Riverside High School.
Finally, through my work at the Independent over 29 years, I was proud to lead an institution which reported with depth and credibility on the issues facing our community week-in and week-out and which advocated for progressive solutions to our City’s challenges.
The Indy’s motto, cited in your letter to candidates, is to “help build a just community,” and that was a motto I wrote and did my best to live out as the Indy’s majority owner and president over nearly three decades.
4) Please give one specific example of something you think City Council has done wrong or that you would have rather done differently in the last year. Also, please tell us the single best thing the city’s done during that span.
I’ll start with the single best thing: The council has made significant reforms in policing in Durham that I think are going to have long-range positive effects. These reforms, developed in response to events and expressed community concerns, were adopted after an open and vigorous year-long process. In the end, the council adopted reforms (some of which the police department was already working on) including (1) a requirement for written consent before a police officer can conduct a consent search of a car or dwelling; (2) mandatory racial bias training for all police officers on the force; and (3) body cameras for all officers on the street; (4) more transparent and more immediate reporting about any officer-involved shooting or other important incident; (5) more specific data collection and reporting to the council on officers’ stop and search data; and (6) organizing a group under the mayor’s leadership to work towards making low-level drug offenses the lowest priority in police enforcement. This last point has included the recent work to establish Durham’s misdemeanor diversion program and extend it up to age 21.
These reforms involved controversy and many difficult decisions, but I am very happy with the outcome and I look forward to monitoring the results.
I think the most significant mistake the council has made in the last year was the decision at our last work session not to fast-track the RFP for the Durham Station land so that we would be able to pursue a 9% tax credit for affordable housing on that land for people making less than 60% of the area median income (AMI). I had put that item on our agenda a month ago and pursued it vigorously, and I advocated for it strongly at the work session. However, the majority of the council did not agree with me, and we did not move the RFP process forward with the speed I think it deserves. This was a disappointment, and I think it was mistake. Failure to use our public land downtown to leverage deeply affordable housing will be an epic mistake.
5) How do you identify yourself to others in terms of your political philosophy? For example, do you tell people you’re a conservative, a moderate, a progressive, a libertarian?
I am rarely called on to do this, and I can’t say that anyone ever asks me. My actions speak for themselves, and I have a record of action and voting that anyone can see. However, if asked, I would identify myself as a progressive.
6) The INDY’s mission is to help build a just community in the Triangle. If elected, how will your service in office help further that goal?
Please see my answers to questions 1, 2, 4 plus several of the specific issue-related questions below. I should also say that I am an activist as well as a council member. I was arrested in the Moral Monday protests for civil disobedience, one of the few public officials in the state to participate in this civil disobedience.
Please address, in detail, the following major issues in Durham:
7) Do you believe that there is a disconnect between the citizens of Durham and the city’s police force? If so, how would you go about remedying that disconnect? On a similar note, to what degree would you say you that Chief Jose Lopez has your full faith and confidence?
Yes, I think that there is a lack of trust among many residents of Durham for the police department, and this is hurting our City significantly. Many people are scared to call the police when they need them, and many people are reluctant to help the police solve crimes when that is a crucial community need.
The council has taken significant steps this past year to remedy this, and I am very proud of our actions which in some respects lead the nation. Because of this leadership, City Manager Tom Bonfield was invited to a White House conference last month of city managers and police chiefs who are leading the reforms nationally. Please see my answer to question 4 above for a detailed outline of these Durham police reforms. Now we need to closely monitor the results of these reforms to see how they are working and if they need changing in some way.
Now our most important police reform to win the trust of the community is to establish real community policing. Around the nation, there is much lip service given to this. Our police department says it needs more officers so that officers aren’t always going from call to call and can instead spend time getting out of their cars and walking neighborhoods and getting to know the residents there as human beings in order to win their trust. I support more officers for our police force if and only if that means we really will get genuine community policing, and I am waiting for our police department leadership to explain how they are doing to do this at our next budget period. This is being done well in other cities, and we need to do it at the highest level in Durham.
Also, we need to restore trust in the department’s use of force and the way in which officers interpret the use-of-force continuum adopted by the department. In the last two weeks, we have had one person tased under controversial circumstances and another person, a suicidal man, killed by the police again in controversial circumstances. When these events occur, public trust is eroded. We need careful but speedy and transparent investigations of these incidents, and officers who have operated outside procedures need to be disciplined. We can’t rush to judgment without the facts, but neither can the department dally or obfuscate the facts if it is to win back the trust of the public.
The department also needs to adopt the procedural justice training for officers recommended by the Justice Department consultants we invited to Durham, and we need to expand our already solid training for situations involving people with mental health issues to more of our line officers.
In terms of the police chief, this is a personnel decision that resides with our city manager, and I don’t believe it should be politicized. I do think that regardless of who is the chief, our department is badly in need of changes. That includes the changes that the council has initiated (see above for detail) as well as a move to genuine community policing and an examination of the way the officers understand the use of force and the use-of-force continuum, as described above. These reforms must come regardless of the person leading the department.
8) A report by the U.S. Department of Justice early this year concluded that black males between 15 and 34 in Durham are six times more likely to die from homicide than all other Durham residents. What steps should local government and police take to address this problem? Does the city have its priorities in order when it comes to dealing with violent crime in low-income neighborhoods, at a time when there’s so much focus on downtown development?
Yes, the City has its priorities in order. This is absolutely at the top of the City’s priorities, including the priorities of the city manager and the council itself. The council gets regular updates on crime in great detail and discusses it regularly and thoroughly. In addition, the City puts enormous resources into fighting crime—including putting 515 uniformed officers on the streets. There are many other City initiatives including, for example, the Gang Reduction Task Force and the overtime pay for extra officers to work in the highest-crime areas where these homicides and many other crimes are taking place.
Still, I don’t think police action in itself can solve the problem. In the long-term, we need our jobs and affordable housing strategies, plus the work of the school system and others, to kick in for the residents of these neighborhoods. People with decent housing and good, well paying job rarely commit crimes.
In the shorter term, we need the community policing and other changes described above so that we can win the trust of the community to help us fight crime in their neighborhoods. Police can’t do it alone. The community has got to pitch in. Where we have strong neighborhood watch groups in low-income neighborhoods, they are making a real difference in fighting crime. But this relies on working closely with the police, and that relies on trust.
9) Do you think that support for saving the old Carpenter Chevrolet Building downtown justifies the anticipated $80.9 million cost to renovate it for a new police headquarters? Do you see any alternatives that could have been explored? And do you think the city has enough substations where they’re most needed?
The cost is now $71 million, not $81 million (still a whole lot!), and the cost is for constructing a new police headquarters, not for renovating Carpenter. The renovation of Carpenter would cost an additional $3.5 million.
Bottom line: The police badly need a new police headquarters that will serve them and our community well for the next 30-40 years, and we need to pay for it. It is already budgeted without a tax increase and will be paid for by debt over time. This is an excellent financing plan for something we badly need. I support it 100 percent.
That’s different from whether or not we ought to pay the extra $3.5 million to keep the Carpenter building as part of the police HQ. I do not favor spending this money because we need this money for other City priorities.
However, another plan to keep Carpenter has evolved, and I like this plan a lot on first blush. It is being vetted now by the City and architects, but it has a lot of potential. This plan would have the City selling the Carpenter building and another patch of land on Main St. for private development. Thus private developers would use the Carpenter building and help activate Main St. The police HQ itself would be pushed south on the site and there appears to still be plenty of room for the kind and size of police HQ that we need. If the vetting of this plan looks like it will work, I like it a lot. It will accomplish many of our goals for Main St.’s walkability as well as get us the police HQ we want. I hope this can work, and I am optimistic. We’ll see.
10) There’s little doubt that Durham, as a whole, is prospering. But there’s also little doubt that this prosperity is distributed unevenly. What should Council be doing to address inequality?
My answers to the questions above address this thoroughly, as well as the most important answer in this regard, which is the answer to the question below about affordable housing.
In addition, I support the mayor’s Poverty Reduction Initiative in census tract 10.01, and I am active in that effort. I chair the finance committee, and we are initiating a program of matched Childhood Savings Accounts for higher education for the children at Y.E. Smith school in the tract; a campaign to expand the reach of the Earned Income Tax Credit; and financial education for families in the tract. I think the Poverty Reduction Initiative can have important positive impact over time in this tract, one of Durham’s poorest.
See especially my answer to the next question on housing.
11) In that vein, what more should the city be doing to address the need for affordable housing?
I have written a strategy paper on this called “Towards an Affordable Housing Strategy for Durham.” Here it is in answer to this question:
What is affordable housing, and what can we hope to achieve?
In my four years on the Durham city council, I have worked more on the issue of affordable housing than any other. It is the highest priority for my council work. I spend time on it almost every day, often simply in support of the many people in our city who are devoting their professional lives or volunteer lives to building more affordable housing. When I was first elected to the council, Mayor Bell appointed me to be the liaison to the Durham Housing Authority. I have served on the board of Urban Ministries. Each year I volunteer for the homelessness point-in-time count and Operation Homeless Connect. I work closely with local non-profits who are thinking about how to develop more affordable housing in Durham. I have made housing issues my special area of emphasis on the council, and I care about them intensely.
With the benefit of this experience, I am putting forward my ideas for a long-term strategy for affordable housing in Durham.
Today I can’t go anywhere in Durham without hearing about the need for affordable housing. This issue is now, for the first time, top-of-mind for our community. “Affordable housing,” however, means different things to different people. Some people want us to concentrate our efforts on housing the homeless. Others want us to concentrate on building workforce housing so that Durham will remain affordable for young knowledge workers or teachers or police officers. Still others think we ought to emphasize development of affordable housing along the light-rail transit corridor. And there are those who think the efforts to mitigate gentrification of the neighborhoods near downtown should take highest priority. All of these are legitimate affordable housing issues. What I am proposing in this strategy deals with all of those concerns. It is a comprehensive strategy.
Neither this strategy nor any other will stop the market forces at work in Durham’s housing market. As young people pour into Durham in search of a great city in which to live, work and play, the demand for housing is rising and so are prices. Many people in this young generation want to live close to downtown so they can walk or bike to their jobs or to our wonderful restaurants, to DPAC or to the ball park. These same young people who are looking for affordable places to live downtown are driving up the price of housing in those near-downtown neighborhoods. Even as they are concerned about the effects of gentrification, they are the agents of this gentrification. This is a fact.
It is also a fact that large corporate apartment developers find Durham to be an attractive market and are building expensive multi-family housing. Likewise, individuals see an opportunity for profit in the hot Durham market and are snapping up properties to renovate and rent out or flip to new owners. So the market forces are huge and inescapable. We can’t stop them.
But there is much we can do to keep Durham affordable, to house the most vulnerable among us, and to help current residents of gentrifying neighborhoods remain in those neighborhoods. We can’t beat the market forces, but we can mitigate their effects in a significant way.
This strategy—developed through conversations with housing advocates, service providers, housing professionals in City government and the Housing Authority, non-profit staff, and many community members who are directly affected—is my attempt to show the way forward. I put it forth in the hopes that it will generate discussion and corrections and modifications and additions as we move forward together to attack this problem.
Even as I write, I am cognizant of the fact that the City of Durham has made the decision to hire a superb national firm with staff right here in Durham—Enterprise Community Partners—to develop an affordable housing strategy for the City. I am thrilled about the choice of this group, and I know that it is going to produce an outstanding strategy from a much deeper knowledge base than I possess. This is every exciting to me and very good for Durham.
So the plan I am putting forth here certainly isn’t the last word. In fact, it’s only the first take on a comprehensive affordable housing strategy for Durham. I hope it will also explain some of the many things that Durham’s City government and our local non-profits are already doing to bring affordable housing to Durham. I hope it will spark discussion and debate. I look forward to your comments.
A few important facts
• In Durham, nearly half of all renters and more than a quarter of all homeowners are considered “housing burdened.” That is, these households spend more than 30% of their income on housing. Even more important is the fact that one in four renters is “severely burdened,” spending more than 50% of their household income just on housing. Finally, those Durham renters in the lowest income quintile spend, on average, more than 70% of their income to house their families. This leaves very little money for anything else. Durhamites who are housing burdened are disproportionately black and Hispanic.
• Twenty-five percent of Durham households have incomes of less than $25,000 per year. Nearly 20% of people in Durham live below the federal poverty level.
• Rent control is outlawed in North Carolina by our state legislature. Courts have interpreted this to mean that municipal governments cannot require developers to include affordable units in their developments. As much as we might want this, it is against the law in North Carolina to require it. I do think there are ways to approach this problem, or to work around it, and I have mentioned them below. But the common outcry that the council simply require affordable units in every development is counter to this reality. We don’t have much of an affordable housing “stick,” so we’ve got to come up with other strategies.
• Aside from the Durham Housing Authority, discussed in detail below, Durham has a group of outstanding non-profit housing developers and managers who have been doing great work for a long time. While private developers have built many affordable units through tax credits, these developers often take these units out of affordability after the guaranteed 15-year affordability period. The non-profits keep their units permanently affordable, and that is critically important in Durham. Here’s the rub: As you can see in the last section of this paper, the four largest and most active of these organizations together have built about 390 affordable for-sale homes and own and manage approximately another 390 subsidized affordable rental properties. This has taken Herculean efforts on the part of these non-profits over many years, but the yield is still small in comparison to the need. Although our non-profits are important to the affordable housing strategy, we can’t count on our non-profits to solve this problem.
• Despite the increasing rate of gentrification, there is still much market-rate affordable housing in Durham. As the market drives prices upwards, however, over the next few years, the number of these market-rate affordable housing units will diminish. This means that subsidized, guaranteed-affordable housing units will become even more important than they are now. During the next two years, by my calculation, we can expect to add about 200 subsidized guaranteed-affordable units to our housing stock. This includes the units at Vermillion on Cook Rd., the second phase of Southside, a few new Durham Community Land Trust rental units on Piedmont St., the new units at Whitted School, new Habitat for Humanity homes, and CASA’s new units for veterans on Sedgefield St. Here’s the important fact: This number of new subsidized, guaranteed-affordable units cannot replace the number of market-rate affordable units that are being lost through gentrification. We are losing ground. So we’ve got to up our game.
• If we are serious about increasing affordable housing in Durham, it’s going to cost taxpayers more money. We need to maximize the effective use of our annual federal housing dollars. We need to make sure we receive state approval for tax credit dollars every single year, as I’ve described below. We need for-profit developers to contribute to solving this problem. We need private financial support for our local non-profit housing developers. But if we really want to change the affordable housing reality in Durham, all these resources are not going to be enough. We will need Durham taxpayers to contribute more as well.
A quick list of the strategies
I have described each of these strategies in much more detail below, but here they are in shorthand form:
1. Support the Durham Housing Authority in its redevelopment efforts
2. Take on the task of ending homeless in Durham—with five actions described here
3. Make publicly owned land downtown available for affordable housing development
4. Create a pipeline of projects that will compete well for the state’s 9% tax credit awards
5. Continue to leverage affordable housing through the “penny for housing,” figure out what the total need is for City funding of affordable housing, and then fund that amount
6. Maintain the affordability of existing multi-family housing
7. Ask for payment-in-lieu when developers are building market-rate rental projects
8. Help low-income homeowners stay in their homes in gentrifying neighborhoods by funding rehabilitation of these homes at scale
9. Help the 4% tax credit act like the 9% tax credit
10. Seek out private 4% tax credit developers
11. Strengthen the development capacity of our local non-profits
12. Engage the Self-Help Credit Union in affordable rental housing development
13. Look for niche opportunities such as affordable teacher housing
14. Adopt the Planning Department’s toolkit of incentives
15. Establish a local housing trust fund
16. Complete the second phase of the Lofts at Southside rental development
17. Make full use of the Pro-Active Rental Inspection Program (PRIP)
18. Make sure that the City’s community development staff and the Durham Housing Authority’s development staff have the personnel and resources they need to aggressively pursue the development of affordable housing in Durham
19. Explain to the public what the City and the local non-profits are doing to create and maintain affordable housing and win public support for these efforts
20. Support the expansion of the land trust model through building the capacity of DCLT
21. Consider a program of property tax relief for low-income homeowners
22. Pursue the possibility of judicious downzoning in the light-rail corridor
23. Study Mayor Bell’s recent proposal for rent subsidies in downtown apartments
Seven big strategies
I have chosen to highlight these seven strategies first because I believe they are the best ways to have the largest impact in meeting the affordable housing challenge.
Support the Durham Housing Authority (DHA) in its redevelopment efforts:
I believe that every other affordable housing strategy pales in importance when compared to this one. Why? DHA has approximately 1,700 units of deeply subsidized public housing in its 14 housing communities plus another 140 very affordable market-rate units. In addition, DHA issues about 2,700 Section 8 housing vouchers per year to deeply subsidize families renting in the private market. The housing communities and the Section 8 vouchers together offer subsidized housing to 12,000 people in Durham, many of them our neediest residents. That means that one out of every twenty people in Durham depends on the success of the Durham Housing Authority. So it must succeed. Nothing else we do to increase affordable housing in Durham will matter if DHA does not succeed in its renovations and redevelopment.
Several years ago, DHA was labeled a “troubled” agency by HUD. The DHA board hired a new director, Dallas Parks, and he has turned the agency around. It is now high performing on the HUD measurements of vacancy rate, financial management and property maintenance.
At the same time, DHA’s properties are old—some of them dating from the 1960’s—and they are desperately in need of renovation. Unfortunately, federal funds for simple maintenance and renovation have been squeezed to the bone even as the properties are crumbling. For example, in our largest and oldest housing community, McDougald Terrace, there are 14 units which have been permanently taken out of use because they are uninhabitable.
The DHA board and staff have taken on this challenge by beginning to aggressively redevelop under the federal government’s new Rental Assistance Demonstration (RAD) program which for the first time allows housing authorities to borrow against their real estate assets and to enter the private market to redevelop their properties. In the past three years, DHA has successfully redeveloped the Edgemont Elms community and Preiss-Steele Place for a total of 156 units, and it is now working under the RAD program to redevelop two aging communities—Damar Court and Morreene Road Apartments—totaling 336 units.
Other DHA properties will be redeveloped in this way, and DHA has some properties such as Liberty Street and Oldham Towers, that are ideally located downtown to be redeveloped as mixed-use, mixed-income communities in which the residents of subsidized units would live alongside market-rate renters.
There are two significant challenges for DHA in this critical work. First, the development staff at DHA is very, very small—too small to do all of the necessary work to redevelop the remaining communities. DHA needs added development staff capacity to succeed, and, if necessary, the City should support DHA in this way. DHA has chosen to be its own developer rather than to surrender the development fees to outside developers as it has done in the past. I endorse this decision because it will eventually be an important, non-encumbered source of income for DHA so it can continue to redevelop its communities.
Second, DHA has taken on substantial debt to finance the redevelopment of these communities, and it will take on more in the future. DHA recently came to the city council to ask for a $500,000 grant to meet its lenders’ reserve requirements, and the council voted to fund this expenditure out of the “penny for housing” funds. (See below for more on the penny.) This reserve will make possible the renovation of Damar Court and Morreene Rd. and future communities as well.
Durham Housing Authority is heading in the right direction, and it is doing so speedily and ambitiously. The City can support this work by supporting DHA’s development capacity needs, helping it when necessary with expenditures such as the recent loan-loss reserves, and by continuing to appoint a strong board of directors for DHA which will give the agency excellent fiscal oversight and continue to drive redevelopment.
Take on the task of ending homelessness in Durham—with these five actions:
Every year in mid-January—often on a cold night—volunteers fan out across the city led by experienced service providers to make a point-in-time count of the homeless population. This is required for federal funding, and it is done nationally in every city during the same week. Here is what we found in Durham during our most recent point-in-time count. On that single night, there were 813 people homeless in Durham. There were 44 unsheltered, the lowest number since 2009. There were 55 chronically homeless people—meaning they are disabled and have been homeless, and often living outside, for more than a year. There were 102 children under 18, all of them in shelters. And there were 138 veterans.
Homeless service providers estimate that during a single year, there are about 3,000 people in Durham who are homeless at one time or another.
Whatever we do about affordable housing, the homeless population needs to be at the top of our list. Fortunately, there are terrific organizations in Durham organized into a continuum of care to assist and reduce the homeless population. These include Durham Social Services, Urban Ministries, Genesis Home which is merging now with the Interfaith Hospitality Network, Housing for New Hope, Healing with CAARE, and others. In addition to the agencies cooperating with each other through the continuum of care, the Durham Rescue Mission houses many people in its work and rehabilitative programs, and some of these people are homeless. Many churches generously assist the homeless population.
Durham is way ahead of most other communities in one respect. That is, the percentage of our homeless population that is unsheltered—living outside—is much lower than in most other cities. This is a tribute to our shelters and to the good work of the frontline workers who are in the streets contacting homeless people and trying to get them inside.
And yet homelessness persists and even grows in Durham, and as it persists and grows it eats away at the moral fiber of our city.
What can we do to end homelessness in Durham?
First, we can end veterans’ homelessness in Durham in 2015, and we must. Mayor Bell has signed onto the Obama administration’s “Mayors Challenge” to end veteran homelessness this year, and the federal government has made $2 million annually available to Durham in the form of Veterans Administration (VASH) housing vouchers. The vouchers have already been used to house 180 veterans, but there are still 80 homeless veterans in Durham. Two cities—New Orleans and Houston—have already announced that they have met the goal of ending veterans’ homelessness. Clearly this is not a static situation as veterans might still lose their housing. But in these cities—and this must be a reality soon in Durham—any veteran who loses housing is re-housed within 30 days. The obstacle to this achievement in Durham is the need for more landlords to accept VASH vouchers for the homeless veterans, and the City’s Department of Community Development has put out a public appeal to landlords this week. With this unprecedented level of financial support from the federal government for this segment of the homeless population, it is critical that Durham succeed in finding the landlords willing to house our homeless veterans.
Second, we need to complete the move away from the transitional housing model for moving homeless people from shelters to homes. Transitional housing works well, but it is four times as expensive as other equally effective models. Genesis Home and Interfaith Hospitality Network, two of Durham’s outstanding non-profits serving homeless families, are merging, and the combined agency will move away from the transitional housing, long-term shelter model. Instead, the new agency will provide shelter and case management to 80-100 families next year to ensure that families retain their housing after leaving their program. The new agency will work to get all families housed in 90 days or less in coordination with the rapid rehousing efforts of Housing for New Hope. In rapid rehousing, families are housed immediately upon leaving the shelters or the streets and then are provided with 3-6 months of support and case management to help them get quickly back on their feet. This approach can “right-size” assistance to each homeless family. Some need only a few months’ rental assistance to get stabilized in a home. Others need deeper social services, job readiness skills, addiction programs or health services.
Urban Ministries of Durham (UMD) sheltered 899 people during the past year, the great majority of them single adults. Of these, 237 individuals left the shelter for permanent housing—182 single adults and 15 families with children. People leaving UMD, mostly single individuals, need the same kinds of resources as those families leaving Genesis Home if they are to succeed in escaping homelessness. The rapid rehousing and permanent supportive housing approaches are critical, as described below.
Third, Durham must build more permanent supportive housing which is needed to house our chronic homeless population. This is a very realizable goal with just 55 chronically homeless people identified during the point-in-time count, and we should figure out how the City can help fund this in cooperation with private non-profit developers. Housing for New Hope and CASA already provide this type of housing and do it extremely well and know how to connect residents to the supportive health, mental health, addiction and other services they need. Funding the needed units of affordable housing should be a City priority.
Fourth, the City must continue to fund rapid rehousing through the “penny for housing.” During the past three years, Durham taxpayers contributed $200,000 or more annually to this program, in addition to federal and private funding, which rehoused 185 homeless families in the past year alone. We do this through a City contract with Housing for New Hope which excels at cost-effectively rehousing the homeless. This is a program that is working extremely well.
Fifth, the Durham Housing Authority should modify its Section 8 voucher program to coordinate with the continuum of care partners to provide housing vouchers to Durham’s most vulnerable homeless households. Right now there are more than 1,400 people on the Section 8 voucher waiting list, but many of them are not in the same dire need as the most vulnerable homeless people in Durham. These neediest families should move to the top of the waiting list. Federal rules allow and even encourage this kind of cooperation between public housing authorities and homeless service providers. The providers are asking for 25 vouchers per year until a total of 72 is reached, and the DHA staff and board should support this request. Important discussions about this are ongoing now.
The strategies to end homelessness listed above will not end homelessness in Durham this year or in five years. But they will move us a long way in that direction. With federal dollars, we have the resources now to end veterans’ homelessness. We can commit to funding the relatively few units of permanent supportive housing necessary to end chronic homelessness in Durham. We can provide the funding necessary for expansion of the extremely effective rapid rehousing program. And we can provide the Section 8 vouchers necessary to house our most vulnerable homeless families. If we do all that, we will be moving well along the path to ending homelessness in Durham, to reaching a goal where homelessness is “rare, brief and non-re-occurring,” to a time when anyone who becomes homeless in Durham is re-housed in 30 days or less.
Make publicly owned land downtown available for affordable housing development:
The City, County and the Durham Housing Authority all own significant parcels of land in the light-rail transit corridor through downtown, and many of these parcels are either unused or used as surface parking lots. With the scarcity of vacant land downtown, private developers are already swirling around these sites for possible development. It is absolutely crucial that the public bodies make this land available for developers of affordable housing. This is our community’s opportunity to make sure that there is affordable housing near the light-rail stations which will be the gateway to jobs in the coming years.
The opportunity to simply sell this land to the highest bidder is going to be a temptation for local government because budgets are stretched and the extra cash would be very useful. It is imperative that we resist this temptation so that we can ensure that affordable housing is built on these key downtown parcels.
In particular, two key sites should be on the City’s radar screen now for appropriate action. The first of these is the Fayette Place site, the location of a former housing authority community that was demolished and now exists as a virtual moonscape on about 20 acres bordering Fayetteville St. and Pettigrew St. and is nearly adjacent to a planned transit stop. A private apartment developer owns the land, but the Durham Housing Authority has the time-limited opportunity to exercise an option on the land under certain circumstances at either the original sale price or at the market rate price, whichever is higher. This will be a very expensive purchase, so the DHA will need to partner with others to take advantage of its opportunity to acquire the land and redevelop it as a mixed-use, mixed income community that includes large numbers of affordable units. The DHA needs to begin planning for this now and meeting with potential development and finance partners.
The second site is a much smaller site, about 2.4 acres, located adjacent to the Durham Station and very close to an eventual light rail station. This site, owned by the City, is a perfect place to develop affordable housing and to include mobility-impaired tenants who will benefit from the proximity to the Durham Station and the light rail. The Self-Help Credit Union has prepared a proposal for the City to make this land available for affordable housing, and I support this wholeheartedly. This site might accommodate as many as 80 units, and it would need tax credit financing (see below) to make the units affordable to people at 30-60% of the Area Median Income (AMI). Affordable units in this location would be the only chance to get affordable housing in this critical transportation node downtown in the midst of Whetstone, West Village, 605 West and other similar high-priced market-rate developments.
Durham County is also looking hard at offering one of its parking lots on Main St. for affordable housing development, and the Housing Authority owns several properties near downtown which could be redeveloped to include a significant number of new affordable units.
The use of this public land is a tremendous opportunity for the community. We will be making an epic mistake if we squander this opportunity by simply selling the land to the highest for-profit bidder. Decisions about the disposition of this public land is ultimately up to the governing bodies of the City and County and the board of the Housing Authority, and we need to make sure that these boards know that the public wants affordable housing on these properties.
Create a pipeline of projects that will compete well for the state’s 9% tax credit awards:
Until the 1980’s, the federal government created affordable housing mainly by simply paying for and building public housing through local housing authorities. But starting with the Reagan administration, federal policy shifted so that affordable housing would get built through investment leveraged by federal tax credits for private investors. This credit is called the Low-Income Housing Tax Credit, or LIHTC.
In understanding the kind of housing Congress chooses to subsidize, it is worth making an important comparison. In a recent year, there was about $900 million in tax credits available nationwide to leverage affordable housing. That is compared in that same year to about $100 billion in tax deductions taken by middle class Americans for the mortgage interest deduction.
Nevertheless, the best way to build affordable housing that is deeply enough subsidized to serve low-income people is to receive an allocation from the North Carolina Housing Finance Agency of a 9% LIHTC. Under the current practices of the agency, Durham is allocated only a single 9% credit annually, and we only get this credit if the applying affordable housing project is competitive enough with other projects statewide that Durham can win one of the allocations. Two years ago, a developer in Durham won a 9% credit for the Vermillion development on Cook Rd., a 60-unit project serving people at or below 60% AMI, including 6 units of supportive housing for homeless people with disabilities. The project isn’t out of the ground yet, but it is the kind of large affordable housing development that the 9% credit can leverage.
Durham needs a strong pipeline of projects vetted and supported by the City so that we are receiving a 9% competitive credit every year for a large project. For 2016, there is not yet a City-supported project in line for a 9% credit application. That means we need to develop one. The Self-Help Credit Union’s proposed project to put affordable housing next to the Durham Station (see above) would be an excellent candidate to apply for this credit, and this project, with City support, would stand an excellent chance of receiving the award. The land next to the Durham Station has been analyzed and would receive a perfect score in the LIHTC competition. Also, very recently, the Durham Housing Authority has begun to advance a tax-credit application to fund the redevelopment of its Club Blvd. community. It is imperative that the City help vet these proposals and support at least one of them for the 9% tax credit in 2016.
We on the city council need to be pushing our administration to help organize and support a pipeline of 9% projects so that Durham wins one of these awards each year. This is the very best way to subsidize affordable housing for low-income people that has guaranteed affordability for a period of 15—and usually 30—years. Durham should never miss a single year applying for the competitive 9% credit.
In addition, representatives of the City should continue to press the state to change the formula by which it allocates LIHTC’s. Until recently, Durham was eligible for two awards in some years, and our population would continue to warrant that.
Continue to leverage affordable housing through the “penny for housing,” figure out what the total need is for City funding of affordable housing, and then fund that amount:
The “penny for housing,” or simply “the penny,” is also called the “dedicated funding source” by City staff. In my first year on council, we raised taxes by one cent on the tax rate to fund affordable housing. In other words, if you own a $200,000 house in Durham, for example, you are paying $20 in property taxes annually to build a house for someone else. The penny this year is generating about $2.5 million for affordable housing. While I have heard much support for the penny for housing over the years, I have never heard a single objection to it, and that is very heartening.
The need for “the penny” became clear when the City made the decision five years ago to put the bulk of our federal HOME and Community Development Block Grant money into the revitalization of Southside. Outside of Southside, there are still pressing affordable housing needs in neighborhoods throughout Durham. That’s why the city council passed the penny for housing to help meet those needs alongside still-significant—but diminishing—federal dollars to be spent outside of Southside.
The penny has been put to a wide range of uses. Above I have mentioned two of them: annual funding of at least $200,000 for rapid rehousing and $500,000 this year to leverage the Durham Housing Authority’s redevelopment of 336 units in Damar Court and Morreene Road communities. But the penny has been put to many other uses. For example, the penny is funding Durham Community Land Trustees’ renovation of nine affordable rental units in Southside. This year the penny will fund $500,000 in land purchases by Habitat for Humanity. In addition, the penny funds a revolving loan fund for interest-free mortgages for Habitat homebuyers who receive a $20,000 “city second” mortgage as part of their loan package. Habitat makes sure that these loans are repaid, and this year 25 new low-income homeowners will receive one of these interest-free second mortgages.
In recent years, the penny has provided roughly $130,000 annually for repairs to the homes of poor elderly homeowners to they can stay in their homes. The penny has been a key part of the revitalization of Southside. In the last two years, the penny has provided about $2.7 million for mortgage assistance, site preparation and infrastructure work for the 48 affordable for-sale homes in Southside. The penny has funded capital improvements at the Urban Ministries shelter, provided interest-free second mortgages to low-income homebuyers in Southwest Central Durham and elsewhere, and contributed $600,000 to the pending renovation of Whitted School which will include low-income senior housing.
So the penny is working. It is doing what it is supposed to do—leverage the construction of affordable housing in a variety of ways. Penny funds are often the critical local funds to make projects work and to keep them affordable for the poor.
The penny, or the dedicated funding source, as it is conceived now, is capped by the council. I believe our approach should be to figure out what our total annual housing funding needs are from City coffers and then figure out a way to fund to the level of those needs. If affordable housing is truly on the top of our civic agenda—and I believe that it is and should be—then we need to figure out the level of funding needed and then make plans to get there.
The City’s consultant, Enterprise Community Partners, should be giving the City and the community a good sense of what the total local funding need is in addition to the federal housing dollars we receive annually. Once we know that need, we should ask our administration to tell us how to fund it. If we are serious about affordable housing in Durham, we are going to have to spend more tax dollars to leverage it.
Maintain the affordability of existing multi-family housing:
Developers building affordable housing with the aid of the LIHTC must guarantee a 15-year period of affordability for those units. Typically, as these units age out of that period of affordability, landlords renovate these properties and raise the rents, usually to market rates. Another key contribution of the penny for housing during the past three years has been to maintain the affordability of several multi-family rental developments which were about to come out of their mandatory affordability period. During this past year, for example, we used money from the penny to keep two developments—one owned by the Durham Community Land Trustees and the other by a for-profit builder—affordable for another guaranteed 15-year period. Instead of raising rents to cover the cost of needed repairs and renovation, the developers used a City subsidy from the penny to make the repairs. In return, the developers are keeping the apartments affordable to people below 50% of AMI for another 15 years.
This was a huge win for our community. Instead of these apartments renting for market rates, the City funds to renovate them was an inexpensive way for the City to keep many units—about 77 in this case affordable to low-income renters.
And here is the key fact: These units were renovated and kept affordable for another guaranteed 15 years at a cost of just $8,600 per unit. This is an incredibly efficient way to use the taxpayers’ money through the penny for housing.
We need more of this. As tax-credit deals come out of their mandated period of affordability and need renovation, the City should aggressively pursue funding the needed renovations in exchange for a commitment of another 15 years of affordability at the 50% AMI range.
What’s more, the City should pursue the possibility of extending this cost-effective strategy to other multi-family properties that are not tax-credit constrained. As developers need renovation of their properties, the City should consider funding those renovations in return for a guarantee of 15 years of affordability at a deeply affordable level. Right now, the owners of multi-family properties are often fixing up their properties and raising rents because the market will bear these increases. Could the City make these rent increases unnecessary by funding renovations and repairs just as it does with tax-credit properties? I don’t know what the national experience is on this idea, but I think we should begin to pursue it here in Durham.
In sum, renovating a unit in order to keep it affordable is much, much cheaper than what it takes the City to leverage the construction of a new affordable housing unit. Aggressively seeking out the multi-family properties that could be candidates for this type of arrangement is important, and staff should be doing so.
Ask for payments in lieu when developers are building market-rate rental projects:
Among the “important facts” I list at the top of this strategy paper is the fact that the state legislature forbids North Carolina cities from requiring developers to include affordable units in their developments. This is a blow to our ability to provide affordable housing, so we have to employ the many other strategies I am outlining herein. However, we must not give up on our efforts to have developers contribute to affordable housing in Durham.
I have heard often that Durham ought to follow Chapel Hill’s lead on squeezing affordable units out of developers, so recently I spent several days in Chapel Hill interviewing people involved in affordable housing. I wanted to find out how they do it and whether or not we can follow their lead with good results. Unlike Durham, most of the multi-family construction in Chapel Hill over the past few years has been for-sale properties—that is, condos. Chapel Hill got special legislation from the General Assembly a number of years ago to allow the town to require that condo developers provide affordable units in their developments or make a payment in lieu to the town’s affordable housing fund. The Chapel Hill folks I talked to all agreed that Durham cannot require these things of condo developers without special legislation, and the General Assembly these days will never pass such legislation.
On the other hand, Chapel Hill does not have special legislation regarding multi-family rental properties. Its authority in this arena is exactly the same as Durham’s. Chapel Hill has developed a strategy for getting in lieu payments from builders of multi-family rental properties, and this is one we could—and should—adopt. These payments are strictly voluntary since they cannot be legally required. But developers have come to expect that they will be asked to make such voluntary payments by the Chapel Hill town council, and now the developers are cooperating with town officials to come up with a schedule that they can count on for such voluntary payments. The committee doing this work is being headed up by the CEO of the Durham-Orange Homebuilders Association. My recommendation is that once Chapel Hill has completed this schedule, which will be soon, that we review it and adopt it after modifying it as necessary to meet Durham’s needs. Builders in Chapel Hill also often build in Durham, and so such a single schedule will make sense to them.
We should establish an expectation, as Chapel Hill does, that developing rental units here should include a payment in lieu to a City affordable housing fund. This fund can then be used to leverage affordable housing as the City sees fit.
Another option, supported by many, is that we try to squeeze a voluntary commitment of a few units of affordable housing at 60-80% of the AMI out of new apartment or condo developers. The payment-in-lieu system is usually better for several reasons. First, it allows the City to subsidize the neediest residents through our housing fund activity rather than subsidizing apartments for middle class people who can already afford market rate in many neighborhoods throughout the city. Second, a system of a few inclusionary units here and there would require a major bureaucratic effort to monitor over time as tenants came and left and as apartment properties changed ownership or management. There would have to be an ongoing bureaucratic system to develop a tenant pipeline and manage tenant certification. This would create hardships for developers as well, so they are likely to heavily resist making these voluntary contributions of units.
I believe we can get developer buy-in to a voluntary schedule of in-lieu payments which provides them with predictability and certainty when they come before the council. There is already precedent for this regarding the way the council handles voluntary contributions to the Durham Public Schools. Developers who are adding students to the schools are not required to make a payment to the schools to offset the cost of those students. However, it has now become routine for me and other council members to ask for a voluntary payment of $500 for every new student be made to Durham Public Schools, and developers routinely comply with this request. They have come to expect it. We should set up the same kind of voluntary contribution schedule for apartment and condo developers who come to us for easements or a rezoning. Imagine if we had $1,000 per unit paid into our housing fund for every unit for which a developer came to us for a rezoning or easement. This would leverage a lot of affordable housing over time.
There is, for me, one fly in the ointment for this strategy. That is, it would only be applied to those developers who come to us for an easement or a re-zoning. Only then does the council see developers and have the chance to ask them for this voluntary contribution. Only then does staff have the chance to explain to them the council’s expectations. For those many developers who are building “by right,” such as the builders of many of the new in-town apartment complexes, they would never be asked for these contributions because they would never appear before council. This is an aspect of the strategy that I am uncomfortable with, and it requires more discussion. But adopting an in lieu voluntary payment schedule for developers is a good idea.
Other critically important strategies
Help low-income homeowners stay in their homes in gentrifying neighborhoods by funding rehabilitation of these homes at scale: Currently the City funds rehabilitation of about three dozen homes per year for low-income homeowners. This allows these homeowners to stay in their homes rather than having to sell them because they can’t pay for the renovation. This is an effective program, but we need to measure the full need for this kind of work and figure out how to fund it at scale.
Make the 4% tax credit act like the 9% credit: In addition to the 9% competitive tax credit, there are also available 4% credits which are awarded by the North Carolina Housing Finance Agency on a non-competitive basis. More than one such credit can be awarded in Durham each year. The 4% credits are always bond deals, so to make the numbers work, they must be large projects of 80 units or more. In addition, to make the subsidies deep enough to serve truly low-income people, there must be another subsidy beside that provided by the 4% credit. This could be City-owned land or a subsidy from the penny for housing, for example. The Durham Housing Authority is showing the way on this strategy by subsidizing one of its community redevelopments with a 4% tax credit added to its own land to make the project deeply affordable. We should be seeking out more opportunities to do this.
Seek out private 4% tax credit developers: Recently the Durham Housing Authority agreed to act as issuer of bonds for a private developer of a multi-family renovation project called Briar Green. Can Durham attract other for-profit developers who want to build or renovate affordable multi-family buildings financed by using the 4% credit? I’m not sure of the answer to this question, but I believe we should pursue it.
Strengthen the development capacity of our local non-profits: Unlike Raleigh, Durham does not have a housing non-profit which has capacity to do much development. Our new housing consultant should be able to recommend to us how to strengthen the capacity of our local non-profits, and we should do so. We need at least one non-profit in Durham which is able to develop significant new affordable housing projects annually and to apply competitively on its own for the 9% tax credit deals.
Engage Duke and the Self-Help Credit Union in affordable rental housing development: Self-Help is the critical local private institution which does have the staff and financial capacity to do large-scale affordable housing development. It has played an essential role in the redevelopment of Southside and Walltown, and we need Self-Help firmly committed to affordable rental development in Durham—ideally on the publicly owned land downtown such as the Fayette Place and Durham Station sites. Duke’s interest-free loans of several million dollars to Self-Help made the work in Southside and Walltown possible. We need more of that same level of commitment from the university.
Look for niche opportunities such as affordable teacher housing: The State Employees Credit Union (SECU) is already doing small-scale single-family affordable units in Durham, and now it is interested in following a model here that it has pioneered in three other North Carolina counties. SECU wants to work with a local non-profit and the school board to build very affordable rental housing for teachers. SECU can build a 24- or 32-unit building for teachers, and a local leadership team is coming together now to work on this with SECU.
Adopt the Planning Department’s toolkit of incentives: Our City-County Planning Department has done excellent work to recommend to the council and county commission incentives for developers to include affordable units. The first two incentives, just adopted, are (1) a density bonus and (2) an incentive which would allow developers who include affordable units to have fewer required parking spaces. This is a well-known strategy, and the council should support the density bonuses and parking incentives. The planners and most housing experts agree, however, that these incentives alone will not induce the construction of many affordable units. They need to be combined with some of these other strategies. Still, it is a useful arrow to have in the quiver.
Establish a local housing trust fund: Such a fund could hold money from voluntary payments in lieu, other private contributions and perhaps government funds in order to pay for affordable projects. These funds operate well in other cities and attract some private support, and we should pursue the best practices elsewhere and adapt them to Durham’s needs.
Complete the second phase of the Lofts at Southside rental development: The first phase of the Southside development includes 80 affordable units and 52 market-rate units. It is almost fully rented up, and it will be a great place to live. The City is committing another $4 million to the second phase of Southside, and the developer has just received approval for the 9% tax credit to build this phase which will also include a majority of affordable units. We need to continue to make a success of this important project and then move on to Phase III to develop the final piece of that land with affordable units.
Make full use of the Pro-active Rental Inspection Program (PRIP): A key aspect of our affordable housing strategy is to keep the city’s private stock of affordable rental housing in decent shape for the people who live there. A relatively new law allows for Durham to target a specific area of the City and to inspect all of the rental units in that area without waiting for a tenant complaint. During a recent one-year period, we inspected 3,500 units in East Durham and found violations in 70% of the units. The vast majority of those were remedied within several months. Because of the objections of some large apartment landlords, the state legislature is, for the second year in a row, considering repealing or drastically weakening the law authorizing the PRIP program. The City of Durham has been active in explaining to legislators the importance, fairness and uses of the PRIP program here, and it is essential that this law be maintained. It gives us a very significant tool in the fight for decent affordable housing.
Make sure that the City’s community development staff and the Durham Housing Authority’s development staff have the personnel and resources they need to aggressively pursue the development of affordable housing in Durham: I look forward to recommendations from the Enterprise Community Partners on this issue.
Explain to the public what the City and the local non-profits are doing to create and maintain affordable housing and win public support for these efforts: Despite the herculean efforts of City staff and the staff of our local housing non-profits, few people know about this work. We need to make the accomplishments of organizations like CASA, Housing for New Hope, Healing with CAARE, Durham Community Land Trustees, Habitat for Humanity and others known to the public and win support for these groups. Together, they have built and manage hundreds of affordable units. Their work deserves continued recognition and financial support if they are to be able to scale up their work and really impact Durham’s affordable housing needs.
Support the expansion of the land trust model through building the capacity of DCLT: DCLT has a unique and powerful model to maintain the affordability of for-sale units, but it needs significant additional development capacity if it is going to have significant impact on Durham’s housing needs.
Three important ideas to figure out
Consider a program of property tax relief for low-income homeowners: As some neighborhoods gentrify, the values of homes in those neighborhoods rise and property taxes rise accordingly. For low-income homeowners, the doubling of property taxes from, say, $1,000 per year to $2,000 per year, can be the proximate cause of them having to sell their homes. Can and should the City and County provide them with some property tax relief? Some difficult issues include the legality of such exceptions, the bureaucratic burden on the homeowners and on the City and County, and how to define the population who would be eligible for the tax relief. Dan Hill, an investor in and advocate for East Durham, has proposed an idea to make this program simple enough to work. He proposes creating geographic zones in East Durham and perhaps elsewhere in the City in which every home-owner would be eligible for property tax relief. This would eliminate most of the bureaucratic burden of identifying eligible homeowners, and it would capture mostly poor homeowners and make sure that tax increases did not drive them from their homes. This important idea is very worthy of study by Enterprise Community Partners.
Pursue the possibility of judicious downzoning in the light rail corridor: There has been considerable discussion in recent months among the proponents of transit-oriented affordable housing about the strategy of downzoning selective parcels near the future transit stops. The idea here is that developers would want more density than they would be allowed “by right” in the downzoned areas, and they would then come to the city council for an upzoning. That process could include the payment of affordable housing contributions to the City’s housing fund (see above). There are important issues here that need to be examined carefully. First of all, is such large-scale downzoning legal under North Carolina’s laws? Second, since density is critical for the success of the light rail and for the maximization of its usefulness to our community, we want high density around the future rail stations. Would downzoning land cause developers to build less densely by right rather than go through the rezoning process? Third, would the downzoning effort and potential controversy be worth the funds it might raise for affordable housing? These and other issues need to be solved if this strategy is to be a useful one for Durham.
Study Mayor Bell’s recent proposal for rent subsidies in downtown apartments: As I have been putting the finishing touches on this strategy, Mayor Bell has proposed a rent subsidy for perhaps 100 families in the 60-80% AMI range in newly built downtown apartments. He proposes to fund this annually through the penny for housing and makes a rough first estimate of costs at $250,000-$700,000 per year to support these rents. As I have expressed to the mayor and city council, I have reservations about this idea. Here are some of them: I am concerned that it will be using our scarce City tax dollars to target assistance to the wrong population. If we have a rent subsidy program, shouldn’t we target it to our most vulnerable families rather than people who can afford to rent in many neighborhoods in Durham now? Also, such a program will require a significant bureaucratic monitoring effort over a long period of time as tenants come and go and as apartment properties changed ownership or management. As I note above, there would have to be an ongoing bureaucratic system to develop a tenant pipeline and manage tenant certification. Finally, I believe that we can use our penny for housing money—our local tax dollars—to leverage many more affordable units in the ways that I have described above.
Nevertheless, I’m very appreciative that the mayor has put forward this proposal and is advocating seriously for this new affordable housing idea in Durham. I am glad the council asked our new housing consultant to study it and make recommendations to us, and I look forward to approaching that discussion with an open mind.
What our non-profit housing providers are doing now:
While the affordable housing discussion has taken Durham by storm recently, there are non-profit housing advocates, developers and providers who have been quietly but effectively taking on this problem for many years.
I have already mentioned the system of shelters for homeless individuals and families that exists here in Durham, and I have discussed the work of the Durham Housing Authority. The list below is of non-profit housing developers and providers in Durham who are providing other kinds of housing. It is not an inclusive list. For example, it does not include some smaller non-profit housing providers working in Durham like Rebuild Durham. Also, it does not include TROSA which houses about 500 people in its unique and effective rehabilitation and employment programs. It does not include Healing with CAARE which provides a dozen units or more of transitional housing for homeless veterans. And it does not include the churches who are providing emergency housing to their members or people who come to their doors. But it is a list of the most significant non-profit housing developers and providers:
Habitat for Humanity
Habitat has built 330 homes for low-income homebuyers in Durham over the past 30 years.
In the past year, Habitat built or rehabbed 20 homes, and it expects to build 22 homes during this year.
Housing for New Hope
Permanent Supportive Housing
Owns and operates 44 units (20 at Andover; 24 at Williams Square)
Operates 20 units at Sherwood
Operates 26 units through the Streets II Homes program, these units owned by private landlords
During this past year added 117 units of affordable housing to the stock with negotiated rents 28-54% below the fair market rent—owned by private landlords
Owns 10 units (Cole Mill)
Owns 8 units (Dove House)
Durham Community Land Trustees (DCLT)
Homeowners on the land trust model: 58
Rental housing: 176 total units
Seniors (55+): 36 units (32 at Maplewood Square; 4 at Carroll Ct.)
Special needs: 22 units (4 sickle cell, 4 mental health, 10 very low income, 4 veterans)
30-60% AMI: 118 units (20 at Morehead Glen, 4 at West Park Apts., 37 at Brite Horizon Apts., 38 at Greenwood Apts., 5 at E. Piedmont Ave. now under construction, 8 Builders of Hope after upcoming acquisition)
Currently owns and manages 44 units in Durham. Of these 13 are workforce housing and the remaining 31 are for people with disabilities, most of whom have been homeless. Eleven of these are set aside for veterans. In addition, CASA is building 12 more units for homeless veterans currently so will soon operate a total of 56 units in Durham.
12) As downtown grows, some degree of gentrification seems inevitable. What steps do you believe the city should be taking to revitalize neighborhoods without having them lose their character?
See a complete answer to this in question 11 above.
13) What role should the city play in the development or redevelopment of commercial real estate? Do you believe the city should award incentives to private developers, and under what circumstances?
The City should (and does) offer incentives sparingly—only 11 times in the past five years, I believe. We should only do it for projects that meet the following criteria: (1) It must be cash-positive for the City from day one. That is, the incremental tax revenue for the City must exceed by a significant amount the dollars that are going towards the incentive. (2) It must be for a purpose that has been clearly defined as a critical need or for a project that will be significantly transformative. Specific need can include, for example, historic preservation of a key property. (3) It must include a Durham-based Business Plan and a Durham-Based Workforce Plan. Both are monitored by the City’s Office of Economic and Workforce Development (OEWD). The business plan requires the incentivized business to reach out affirmatively through OEWD’s small-, minority- and disadvantaged-business database for contracting work and to meet the City’s minority participation targets. The workforce plan requires the incentivized business to post jobs at the Durham Career Center and to interview applicants pre-screened by Career Center staff. It is illegal to require the business to hire only from this pool, but we do require incentivized businesses to provide feedback and statistics on the number of candidates hired from this Durham pool. We have had considerable success with this requirement, as all of these businesses have hired a significant number of Durham residents.
It is important to digress here a moment to the recent issue at the Residence Inn on Main St., a new hotel constructed with help from a tax incentive from the City and County to preserve the historic façade of the old McPherson Hospital. Workers there claim that they have not been paid the wages they have earned from a construction contractor. The contractor disputes this, and I expect that the issue will end up being litigated. It is clear, however, that the workers are convinced that they are owed significant unpaid wages, and given what I have learned in the media coverage, I expect they are right. While this is being settled, I have urged the city manager not to pay out any of the City’s incentives to the developer. These incentives are not scheduled to be paid out for some time yet, and I don’t think we ought to be paying incentives to a developer if we have serious doubts about whether construction workers’ wages have been honestly calculated and fully paid. Since I wrote the manager about this, several of my colleagues have joined me in this request to the manager, and he has responded positively. The City isn’t the right institution to get into mediating this dispute. That is best left to a professional mediator or the courts with a possible assist from public pressure. But the City should withhold funds until this is settled satisfactorily. And we should write safeguards against such situations into future incentive deals to protect workers.
14) The Bull City Connector recently underwent route changes. Do you think the results are fair and efficient? If not, how could the Connector’s routes be changed to best serve the needs of residents most likely to use it?
This is a close call. We are making the route faster, cheaper to operate and more efficient, but there are some people who would like it to go to Durham Station. It’s a trade-off, and I endorse the GoTriangle decision to do this while recognizing the difficulty it causes some people. The real danger to the Bull City Connector is that we might lose the $300,000 yearly funding from Duke University that makes is possible. So far, Duke has continued its share of the funding, and we need to work with the university to make sure this continues. Duke has been an excellent partner in this free route. Ideally, the route would be extended further into East Durham, and I hope we can do this in the future.
15) Do you believe the downtown Loop is outdated? If so, what would you like to see done with it?
Yes, it’s outdated, and two-waying the loop is a great idea. However, I do not count it among my highest priorities for the expenditure of tax dollars given our other critical needs for housing, transportation and much more. I believe we need to find less expensive ways of two-waying the loop than have so far been proposed. And I am adamantly opposed to giving up public green space or planned public green space downtown in order to two-way the loop. We need to make sure that we preserve downtown public open space when the loop is reconfigured. So I support this heartily, but we need to find an affordable way to do it that will preserve open space downtown.
16) What are your initial thoughts on a proposed mixed-use development in North Durham, with a shopping center to be anchored by a Publix? Do you see, as some North Durham residents have expressed, opportunities to “fix” problems in the area of Guess and Latta roads with this development? (If so, what features would you like to see in the developer’s plan?) Or are you more inclined to side with residents who believe that such a development would change the character of the neighborhood in undesirable ways?
It is way too early to comment intelligently on this. There is no plan, only some rumblings and rumors, and I don’t think it’s wise to get staked out on something like this until I’ve got some facts to go on.
17) If there are other issues you want to discuss, please do so here.
We must give significant attention to the needs of our Hispanic residents. They now make up 15 percent of our local population. With a spirit of cooperation, we can all prosper together. The City has an important role to play here through effective police protection, excellent police relations with the Hispanic community, continued deprioritization by the police of immigration violations, the appropriate granting of certification for U-Visas, fair housing enforcement, the creation of more affordable housing, and meeting the oft-expressed need of the Hispanic community for more soccer fields.