Mayor Rosemary Waldorf and
Chapel Hill Town Council Members
Chapel Hill Town Hall
306 North Columbia Street
Chapel Hill, NC 27516
Re: Erwin Road site for affordable housing
Dear Mayor Waldorf and Council Members:
This letter is meant to provide a preliminary evaluation of the suitability of Town-owned land on Erwin Road for an affordable housing development. In addition, I would like to provide a vision of what development options might be possible on this site.
First, I want to emphasize that this report is entirely preliminary and is not based on engineering predevelopment work or a feasibility analysis. That said, I have walked the site, examined the topography and consulted with OCHC board members and Crosland Properties, the private sector developer who developed Dobbins Hill. Based on this limited analysis, it appears that this site is well suited for a variety of affordable housing uses.
The site offers good potential for several reasons: the topography is favorable, utilities are close by, and the site costs would not be excessive for an affordable housing development. I believe this site would be particularly attractive as a tax credit rental development because there is dire need for rental units that are affordable to working families and/or elderly residents. As you know the high cost of land and the economics of development typically preclude housing options for these populations (though we are fortunate in Chapel Hill to have received HUD funding for Manley Estates).
Depending upon the Council’s wishes, this site could be minimally developed on six or seven acres, or the site could accommodate a larger, more diverse development including both rental and ownership units. One alternative, using six or seven acres, would be a family-oriented property (like the Dobbins Hill Apartments), containing approximately 60 rental units. This is probably the most needed type of housing in Chapel Hill. These would all be affordable to households earning less than 60% of the area median income (which ranges from approximately $30,000 for a two-person household to about $37,000 for a four-person household). This type of development might also include some single room occupancy units. Other characteristics of the family-oriented housing could be:
§ R-4 zoning to accommodate 10 units per acre
§ Buildings would typically be two and three stories tall
§ There would be an on-site property manager
§ There would be recreational facilities for children
§ A family resource center would also be included in the complex
Alternatively, on the same six or seven acres, we could develop a 50-60 unit rental facility for senior citizens with incomes below 60% of median. This type of development would consist of single-story buildings, probably quadplexes. Typical characteristics of a senior facility would be:
§ On site property management
§ Mostly one-bedroom units
§ On site services for elderly residents (typically social services or health-related)
§ Laundry facilities
Lastly, if the Council wished to devote 12-18 acres of this site to affordable housing, it would be possible to include both rental units and homeownership opportunities. This type of development could be phased in over several years, with the rental portion being developed first. Although this latter option may be the most desirable from an affordable housing perspective, I realize that the Council must consider the needs of all citizens when assessing these opportunities.
Regarding financing, I believe this site is well suited for a tax credit development, which is the most viable means of financing affordable rental housing. Tax credits are equity that is invested in the project by corporations. The NC Housing Finance Agency allocates the credits once a year. These funds are awarded by the NC Housing Finance Agency based on a competitive analysis of applications. With Town and County support, and a well-designed plan, I believe our application would be well received. Tax credits would also minimize the need for local monies like CDBG and HOME funds. However, our application would be strengthened if we could use local funds to purchase the land.
I hope this provides you with a better idea of the development opportunities offered by this Town-owned land. If the Mayor and Council would like us to continue to explore these opportunities and apply for tax credits, we would be happy to do so. We will await your instructions.
Sincerely,
Robert Dowling
Executive Director
cc: Cal Horton, Town Manager
OCHC Board of Directors