Raleigh City Council reviews $17M gap financing for six affordable housing projects

In the heart of Raleigh's city hall, the atmosphere buzzed with anticipation as council members gathered to discuss a pressing issue: affordable housing. Annie Bauman Mitchell from the Housing and Neighborhoods department took center stage, presenting a comprehensive plan aimed at bridging the gap in rental development financing.

Mitchell outlined the city's strategy to support affordable housing through a series of proposed projects, emphasizing the critical role of gap financing. This funding mechanism is essential for reducing the overall costs of development, which directly impacts rental prices. She explained that the city’s involvement primarily revolves around soft costs, which are more flexible and help lower the financial burden on developers, ultimately leading to more affordable rents for residents.

The discussion highlighted the overwhelming response to the city’s recent Notice of Funding Availability (NOFA), with 17 applications requesting a staggering $55 million, far exceeding the $15 million budgeted for this year. This unprecedented interest signals a growing demand for affordable housing solutions in Raleigh. Mitchell noted that the city is committed to evaluating projects based on financial feasibility, quality, and location, with additional points awarded for projects that prioritize sustainability and serve vulnerable populations.

Among the proposed developments, several stood out. The Biltmore Hills project, a preservation initiative, aims to maintain affordability for existing units, while the Chapinoke development will introduce 200 new units for families earning up to 70% of the median income. Other projects, like Fisher Grove and Garner Station, are designed to serve families at even lower income levels, ensuring a diverse range of housing options.

Mitchell also introduced a new requirement for developers to set aside 5% of their units for referrals from city-sponsored programs, a move aimed at enhancing access for those in need. This initiative reflects the city’s commitment to creating a pipeline of affordable housing that aligns with community needs.

As the meeting progressed, council members raised questions about the implications of state tax credit approvals on the funding commitments. Mitchell reassured them that all financial commitments are contingent upon receiving necessary tax credits, emphasizing the importance of these awards in moving projects forward.

With a request for authorization to allocate $17.28 million for the six recommended projects, the council is poised to take a significant step toward addressing the affordable housing crisis in Raleigh. As the session concluded, the discussions underscored a collective determination to foster a more inclusive community, where affordable housing is not just a goal but a reality for many residents.