A look into how the Town of Chapel Hill allocates funding for affordable and public housing

As the cost of rent and homeownership in Chapel Hill continues to climb, the Town of Chapel Hill has increased its public housing budget for the 2022-2023 fiscal year.

The Town’s public housing budget receives annual revenue from the U.S. Department of Housing and Urban Development. This funding has increased by 11.2 percent from $1,145,793 to $1,274,426 between the 2021-2022 and 2022-2023 fiscal years.

Chapel Hill also collects about $1 million in rent from public housing tenants.

The Town’s public housing funds go toward a number of costs, including the salaries of public housing personnel and maintenance of public housing properties, according to the Town's Public Housing Fund report. Personnel costs have increased by about 19 percent this fiscal year, with a 2 percent increase in health insurance and a 0.75 percent increase in retirement pay — as well as salary boosts.

According to Sarah Viñas, affordable housing and community connections director at Chapel Hill Affordable Housing, the Town of Chapel Hill has over $15 million dedicated to affordable housing. This includes the $10 million Affordable Housing Bond Referendum approved in 2018, which has since been fully allocated, she said. 

“To my knowledge, that is the largest affordable housing bond that has been passed in our county,” Viñas said.

There are a number of ongoing affordable housing projects in the works this year.

“One of the big focus areas of our affordable housing efforts over the last few years has been to use Town-owned land to initiate new affordable housing,” Nate Broman-Fulks, affordable housing and community connections assistant director for Chapel Hill Affordable Housing, said.

He said that a few years ago, a piece of Town property on Homestead Road was dedicated to a mixed-type affordable housing development featuring duplexes, townhomes and apartments for residents with a range of income levels. This year, the Town is set to begin construction on these 90 units, Broman-Fulks said.

“We're hoping to break ground here in the fall on that project,” he added.

However, rising construction and other costs have made the development of affordable housing more difficult. 

The Homestead Road project, for example, was originally planned to contain 120 units of affordable housing. With rising costs of construction coinciding with a hike in interest rates, the development team had to reduce the number of units in order to keep the project going, Broman-Fulks said.

“Unfortunately, the project has been kind of caught up with general real estate market dynamics that have caused some delays and some rethinking,” he said.

Viñas said Chapel Hill Affordable Housing is currently looking into more avenues through which to get funding to meet the Town’s affordable housing goals, including additional annual allocations or another affordable housing bond.

The Town is also exploring private sector investment to pursue its goal of building 500 units of affordable housing over the next five years.

“We do have a lot of projects that are either underway or scheduled to be underway pretty soon, which is really exciting,” Broman-Fulks said.

This past year, the Town made a series of allocations to a variety of affordable housing projects, amounting to $9.1 million. 

“That's the largest single contribution by Chapel Hill to affordable housing in its history,” Town Council member Michael Parker said. “It's part of our ongoing commitment as a Town and as a council to supporting affordable housing in our community.” 

Some of these allocations will go to Habitat for Humanity’s Weavers Grove project, EmPOWERment, Inc.’s PEACH Apartments and the Homestead Road development.

“We’d always like to do more, but I think that the Town, over the past years both before I was on council and while I've been on council, has really made a lot of positive steps toward affordable housing,” Parker said. “And I expect that over the coming years, we will continue in that on that path.”

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