Durham is Fighting for Affordable Housing

Posted By: Dustin Engelken Government Affairs, TAA News & Updates,

Over the last few years, a number of towns and cities across the region have increasingly come to realize they are facing a serious housing affordability issue. In Raleigh, for example, the inventory of homes for sale sits at about two months of supply after having averaged thirteen months as recently as 2011, and that has led to dramatically increasing home prices. Meanwhile, the vacancy rate in Raleigh is under five percent which is fueling an increase in average rents across the city. The issue is certainly not unique to Raleigh and elected officials and policymakers around the region have found themselves struggling to find the answer.

Fortunately, Durham may have stepped up with a blueprint for the future.

The challenges facing the housing market in Durham are similar to those in Raleigh and elsewhere. An influx of in-migration and increasing urbanization have led to strong population growth. The Durham planning department estimates that over the next thirty years, 160,000 new people will move to Durham and the city will need more than 62,000 homes to keep up with demand. Population growth is already placing pressure on home prices, which have gone up more than forty percent in the last five years. Rent prices have also shown strong growth and the average monthly apartment rent in Durham is nearly equal to that in Raleigh and higher than nearly every municipality in the Triangle.

Given the increasing pressure on the supply of housing and its impact on affordability, Durham has taken a revolutionary approach to the issue: making moves to increase supply. Yes, that may seem like the obvious answer, but Durham is the first to really take it seriously. In mid-2018, the city launched a study of housing called Expanding Housing Choices (EHC) which led to a number of recommendations for the City Council. These include streamlining the rules to encourage Accessory Dwelling Unit (ADU) construction, allowing duplexes in more locations, legalizing smaller houses and smaller lots, and changing zoning to allow for cottage court home clusters. The proposal has gone through an intense review process and despite some neighborhood opposition, the City Council is poised to move forward with implementing the recommendations next month. In truth, the EHC initiative is relatively modest, but it marks the first attempt by any municipality in the region to seriously rethink their zoning code’s emphasis on single-family zoning and should result in more homes being built and Durham becoming a denser community.

In addition to the regular pressures of a growing population on housing supply, Durham is also facing a serious shortage of affordable housing. According to the US Department of Housing and Urban Development, nearly half of Durham’s households earn eighty percent of Area Median Income (AMI) or less and only one-third of the city’s rentals are considered affordable at their income level. The struggle is even more real for the approximately 18,000 families earning less than thirty percent of AMI. In response, the Mayor and City Council have proposed a nearly $95 million affordable housing bond which will be on the ballot in October. The bond proposal is the most ambitious in state history and would drastically increase the city’s supply of affordable housing with the construction of an estimated 1,800 affordable units and the preservation or replacement of an additional eight hundred others. In total, that would increase the stock of subsidized units by at least a third. The plan also would result in moving 1,700 homeless households into permanent housing and help create two-hundred homeownership opportunities through down payment assistance and would expand the city’s existing eviction prevention program. If the bond is approved, the city estimates that the $95 million will lead to another $445 million in tax credits and private investment.

Nobody should expect that Durham will solve the issue of housing affordability outright, but if things go according to plan, the city will take a concrete step forward by partnering zoning reform efforts with targeted investments to help low-income residents. The reward will be thousands of new units across incomes and housing types that should serve to stabilize prices and create a more stable and equitable city for all its residents. Other municipalities should take note.

This article was written by Dustin Engelken, TAA's Government Affairs Director.