Thursday, July 23, 2015

Changes for the Better in Davidson's Affordable Housing Policy

This post originally appeared in the Herald Weekly at

For years, Davidson’s affordable housing program has been the crown jewel of the town’s progressive planning policies.  As one of only three mandatory programs in the state, it is held up as something that makes Davidson special.

The program has staunch defenders, and support for the program is something of a litmus test for elected officials in spite of the program’s limited impact.

Since its implementation in 2001, just 56 units have been built via the ordinance with many of the homes ultimately selling to people making more than the program's income thresholds due to trouble finding buyers with incomes under the required limits.

During that same time period, the town’s population has grown by over 4000 people – a fact that highlights people being able to move to the town and still find housing.

Recently, the town fended off a lawsuit challenging the program's legality – choosing to settle with developers rather than risk the expense of going to court.  The settlement permits the developer to fully buy out of the program requirements at a much lower rate than previously allowed.

So, with all of that as backdrop Commissioners came to last week's Board meeting looking ready to make substantive changes to the program making it more flexible and reasonable.

First, there was a public hearing on changing the ordinance to mimic the recent legal settlement allowing developers to buy out of building any affordable housing, not just the lowest tier in the program for those making less that 50% of the area Average Median Income (AMI).  Developers would be able to do so at a reduced rate of just over $26,000 per unit - a 50% reduction from the current amount.

Before the hearing opened for public comment, Commissioner Rodney Graham, himself a builder who has built affordable housing, offered a preliminary defense of the change, Graham said some developers may still find it “economically viable” to build rather than do the payment in lieu.  This appeared to anticipate the challenges that would come in the hearing itself from Planning Board members Brunson Russum and John Kennedy.

Russum said the  low payment in lieu will incentivize developers to make the payment rather than build housing.  Russum felt that at just over $26,000 per unit the PIL will only “buy you some nice carpet”.  Kennedy said the low cost makes it very easy  not to build the units - leading to clusters of standard housing and clusters of affordable housing.  He colorfully concluded that “separate and unequal was never the intention of the ordinance.”

When asked why the town was considering this change, Town Attorney Rick Kline, responded it was “in combination with the settlement of the lawsuit”.  He went on to say “we thought it would be fair to apply to everybody and not just the parties to the lawsuit.”

Put another way, the town would likely open itself up to further legal challenges if it did not treat all developers equally.

When the Board votes next month on this change, don't be surprised if it unanimously passes.

The second affordable housing related change on the agenda involved approval of a new affordable plan for the Bradford neighborhood.  For years, the neighborhood has fought to change the approved plan to remove a 10 unit rental apartment building and replace it with more dispersed single family homes.

Last week the neighborhood finally got its wish.

The town approved a new plan that requires 8 new affordable single family homes as well as one duplex.  Furthermore, all of these homes will be in the highest tier of the plan – the 80% to 120% AMI.  The plan also includes a major reduction in the deed restriction period from 99 years down to just 10 as well as requiring the units be owner occupied and not rentals during the deed restriction period.

The much shorter deed restriction period should help program sales by removing a component most buyers strongly wish to avoid.  Putting the units into the highest tier of the program’s AMI allows builders to still make a profit on the houses rather than losing money which incentivized them to actually build rather than buy out of the program.

Don't be at all surprised if similar changes to these eventually work their way into the ordinance itself.  Not only is it fair to buyers and builders, they also generate units on the ground.

The irony in all this  is that on the same night Commissioners received concerns from Planning Board members on one proposed change to the program - concerns based on doctrinaire inflexibility – Commissioners approved another change that actually proved those concerns wrong.

All it took was a little flexibility.

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