City Council, planning commission discuss details of workforce housing incentive

Updated: Feb. 5, 2020 at 6:15 PM EST
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WILMINGTON, N.C. (WECT) - As the Cape Fear region has grown, so has the cost of housing — particularly in the Wilmington city limits.

“Our rental rates are absolutely off the charts right now,” said Wilmington Planning Commission member Deb Hays. “They are very high. They are at one of the highest points they’ve ever been.”

Hays and the other commission members joined with Wilmington City Council for a joint session Wednesday to address housing affordability in the Port City.

Specifically, they gathered to discuss a new zoning classification: Workforce Housing Mixed Use (WHMU).

WHMU would be a zoning overlay that could be applied to three existing zoning districts within the city limits, and would provide developers with an incentive to include affordably-priced units along with those priced at the regular market rate.

Council members discussed the proposed details of that program at length — particularly how they plan to define “affordable.”

“Affordable is different between you and me and everybody else,” Hays said.

Members said the target for workforce housing affordability would be something an entry-level nurse, school teacher, firefighter or other core-workforce employee could afford.

Mayor Bill Saffo said he wanted those working in the tourism industry included as well, and, he said, the average wage for those workers is $11.25.

Affordability for an individual or household is generally defined by housing, including utilities, making up no more than 30 percent of that individual’s take-home wages.

According to city staff, the federal government’s estimate of an affordable one-bedroom apartment in Southeastern North Carolina is $790 a month.

Several council members pointed out finding a housing unit at that price point, let alone with utilities, is incredibly difficult.

The WHMU zoning would require developers to set aside a percentage of their units at the city’s established affordable rate and maintain that rate for up to 20 years.

Alternatively, developers could opt to pay a one-time fee-in-lieu of 10 percent of the final value of the housing portion of the development.

For a $5 million development with 95 percent of the property used for housing, that would work out to $475,000 if the requirement was 10 percent.

In exchange, developers would be able to jump to the front of permit and approval lines, build projects with higher-density and have other benefits.

Council Member Clifford Barnett expressed concern the public — and developers — would see that mechanism as the city allowing developers to buy their way into perks.

It’s also not clear how the funds would be used. Ideas were thrown out, including partnering with Habitat for Humanity, bolstering the city’s home-buyer support system and providing gap financing for developments with majority affordable housing.

Still, Hays and others said they’d prefer if the city could find a way that would push developers to actually build affordable units, rather than paying a fee.

“I felt that it was important to have, to really take a look at this and really dig in," she said. "Instead of making an easy option to make a payment, to really work with them and say, ‘What do you need in order to really build these units, and really affect workforce housing?’”

Council and commission members asked staff to do research on the base wages for several workforce professions.

With that information, they said they plan to determine what a truly affordable housing rate would be.

City Attorney John Joye told council members the item could come before them as soon as April.

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