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Affordable housing near proposed light rail
 
Published Wednesday, August 20, 2014
by Latisha Catchatoorian

DURHAM – Building affordable housing near the city’s future light rail transit system is easier said than done.

The Durham City/County Planning Department hosted a community meeting to encourage the development of affordable housing near rail lines, however there is much to consider. The city has yet to receive the final seal of approval from the federal government for the transit system.

“The first thing that we need to achieve as a community is to make sure we get our light rail system approved, or all of this conversation is for naught,” said Dan Jewell, owner of architecture firm Coulter Jewell Thames.

Pat Young, the city’s assistant director for development, said the meeting was a kick-off strategy to talk about the economic development of the city, including the construction of affordable housing.

“As with almost every other city in America, the lowest income folks are the most cost-burdened, and they’re competing for a very small pool of affordable units,” he said.

Durham’s Affordable Housing and Transit Goal is “to preserve and increase the stock of affordable housing within a half mile of each of the proposed Durham-Orange rail transit stations. At least 15 percent of housing units within a half mile of each rail transit station and bus hub (must) be affordable to families with income less than 60 percent of area median income.”

“As a professional planner, this is the kind of goal that we love because it’s specific and it’s actionable and gives us, the staff, something very clear to shoot at; but there are a lot of considerations that are going to have to be evaluated and that we are going to have to get some community input on,” Young said.

Sixty percent AMI, according to the U.S. Department of Housing and Area Development, based on a three-person household is $35,475 annually, with maximum rent and utilities at $887 per month (30 percent of their gross income.)

The average median household income levels of proposed station areas: East (Dillard, Alston) - $16,477. Durham station - $37,203. Station areas west (LaSalle, Duke Medical Center, Ninth Street, and Buchanan) - $27,590. Durham County’s average median household income is $50,997.

Current affordable housing incentives such as the Affordable Housing Density Bonus have never been used in the past 12 years.

“Transit areas are areas for economic development,” Young said. “If you look at housing and transportation together, you’ve got up to 45 percent of your income as the accepted standard. If you live near a transit area and you can organize your life to not have a vehicle, you can afford to pay a little more in housing and you’re probably paying much less in transportation.”

Over 32 percent of households near the proposed Alston Avenue rail stop lack a personal vehicle, while roughly 30 percent of households near Dillard Street and roughly 21 percent of households near Durham Station are also without vehicles.

Consequently, land value oftentimes goes up whenever rail systems are nearby, which can drive up the costs of housing.

“Affordable housing retention strategies… we already have quite a bit of affordable housing around some of our (proposed) transit stations,” said Aaron Cain, the city’s assistant director for strategic planning.

Cain said one solution is to try to come up with ways that keep the affordable housing that already exists in these areas from “flipping over into something more expensive and being redeveloped.”

Jewell said there are “real costs” associated with any building project and in order to bring an affordable housing project to market, some of those costs must be offset for developers.

Costs can include the price of the land, time factors, architecture and design fees, building and construction costs, and more.

“We have the relative costs, and we have to offset that with revenue. But if we incorporate an affordable housing component with a market value component, we have to offset the revenue gap,” Jewell said.

In order to fill the equity gap by decreasing costs and increasing revenue, some possible solutions include designing districts, implementing a long-term funding toolbox and regulatory incentives, and using federal and state resources.

“The cost of meeting the stated goal, and, in my opinion, the likely success of outcomes of meeting the goal, are going to be related to how the community values these different considerations,” Young said.

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