City leaders will have six months to convince Durham property owners to pay higher taxes in order to help lower-income families afford rent.
Mayor Steve Schewel said the Durham City Council plans to vote next week to add a $95 million affordable housing bond referendum to the November ballot. Approval of the bond would increase property tax rates by 1 to 1.5%.
The mayor said the finance department estimates property taxes on a $250,000 house would rise by about $38 a year.
“We’re asking people to share their prosperity,” Schewel said. “I am confident that Durham being the community is, people will want to share their own prosperity with others, and I think we can make it happen.”
Schewel said housing affordability is the most pressing issue in Durham.
The city’s population continues to grow at a faster rate than home construction. Housing rates rise with demand and increased competition from newcomers.
“We’re either going to do this or we’re going to be succumbing to a future that’s driven totally by the market,” he said.
“Downtown itself and all of our near-downtown neighborhoods and are going to be only accessible to people with significant income. We need to make sure that everybody is able to live in those neighborhoods and access the good jobs and the transportation that’s downtown. That’s really important.”
Karen Lado, the Assistant Director for Strategy in the Durham Community Development Department, said more than 14,000 households in Durham spend more than half of their income on rent.
“That’s really problematic because when you pay that much for housing, you do it at the expense of food and medicine and clothing for your kids, and other really important things,” Lado said.
“We really see a combination of folks who simply cannot afford adequate housing of any kind as well as folks who may be able to compete in the rental market but who just can’t get into the home ownership market.”
The Community Development Department will launch this summer an Affordable Housing Loan Fund, which starts with $10 million but aims to eventually grow to $20 million. The city has a partnership with Duke University, the North Carolina Development Initiative, and SunTrust Bank.
The money will go to developers to build units specifically designated as affordable housing, and to purchase properties to keep at affordable rates rather than rise with the market.
“We have a lot of units that are being rented by low-income people that are on the private market and right now they’re affordable, but they might not be affordable in three or four or five years, and we need to figure out how to preserve as many of those we can,” Lado said.
Schewel said the loan fund should eventually create about 1,000 new affordable units housing units. He said $95 million affordable housing referendum will build another 1,800 units, preserve 900, and create 200 first-time home ownership opportunities.
New construction will mandate that the rates of rent on the affordable units be no more than 30% of a household income.
“Most of the units will be affordable to people making $48,000 or less for a family of four or $24,000 or less for a family of two. So very affordable, and some of the units even more affordable than that,” Schewel said.
“We can do this. Do we have the political will and do we have the moral commitment as a community to really make a difference in our housing affordability? I think that we do.”
The 2019 Durham municipal elections will be held on November 5. Voters will elect a mayor and three at-large city council members.