AGENDA ITEM EXECUTIVE SUMMARY
ITEM TITLE*
title
Local Affordable Housing Funding Program Allocations
presenter
RESPONSIBLE STAFF, TITLE, DEPARTMENT*
Loryn Clark, Deputy Town Manager, Interim Director, Housing and Community Development Department (HCD)
Emily Holt, Assistant Director of Affordable Housing, HCD
STAFF RECOMMENDATION*
Staff recommends that Council adopt the resolution to grant the Town Manager or their designee the authority to approve allocations of up to $250,000 from the local Affordable Housing Funding Program <https://www.chapelhillnc.gov/Town-Services/Housing/Affordable-Housing/Affordable-Housing-Funding> (AHFP), not to exceed $1,150,000, for activities supported by Council-approved plans.
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ACTION/DECISION POINTS*
Council must approve or reject the request to grant the Town Manager the authority for approving allocations of up to $250,000 from the local Affordable Housing Funding Program.
LEGISLATIVE CONTEXT*
On January 29, 2025, Council approved granting the Town Manager the authority to establish and administer a unified local affordable housing funding program. The funding program combines three local funding sources: an annual affordable housing allocation from the Council, Affordable Housing Bond funds, and payments received to support affordable housing.
The January 2025 resolution authorized the Town Manager or his designee to approve funding allocations of $100,000 or less, and up to $400,000 per year. Allocations of more than that must go to Council for approval.
On November 19, 2025, Council approved a modification to the conditional zoning permit for the Hillmont residential development that revised the affordable housing contribution to include 20 affordable units and a $1,150,000 contribution to affordable housing activities.
BACKGROUND AND CONTEXT*
The intent of the $100,000 cap on Manager authorizations of affordable housing funding was to grant limited authority to the Manager to allow staff to respond quickly to smaller, time-sensitive affordable housing funding needs that align with the Town’s housing needs and Council goals. Staff have requested the Manager approve two allocations since AHFP was created in January 2025, which together total to $200,000.
Staff received $1,150,000 from the developer of the Hillmont Residential Project and are exploring how to allocate that funding. Staff are considering several key Town initiatives and are in the process of determining the cost and implementation details of each. The funding needed for some of these potential activities may exceed the existing $100,000 cap. Staff are requesting that Council grant the Town Manager the authority to approve allocations of up to $250,000 from the local Affordable Housing Funding Program, exclusively for the $1,150,000 payment from Hillmont. Outside of this pilot program, all other funding requests in excess of $100,000 from the Affordable Housing Funding Program would continue to require the Manager’s approval.
Eligible uses of this funding would be restricted to activities that fit within the Complete Community framework and/or Council-approved plans, including the Affordable Housing Plan and Investment Strategy <https://www.chapelhillaffordablehousing.org/read-our-plan>, the Manufactured Homes Action Plan <https://www.chapelhillaffordablehousing.org/manufactured-housing-strategy>, the Public Housing Master Plan, and/or other programs and projects supported by the Council. Examples of eligible funded activities include:
§ Support for public housing residents who have been displaced by the impacts of Tropical Storm Chantal.
§ Renovation and rehabilitation of Town-owned affordable housing properties, including public housing communities, Transitional Housing units, or other Town-owned residential units.
§ Implementation of the Manufactured Homes Action Plan, such as the rehabilitation of manufactured homes.
§ Creation of a downpayment assistance program for low and moderate income homebuyers.
§ Rental subsidy programs to support households who need emergency rental assistance to support them as they work through housing instability.
TRADEOFFS, ALTERNATIVES, IMPACTS
If Council decides to increase the threshold for Manager approval of allocations from the AHFP, staff will have the flexibility to design and administer much-needed programs that are already supported by Council. This pilot would also allow us to respond quickly to support time-sensitive community needs. All activities will adhere to the Allocation Strategy that follows the established affordable housing priorities and eligibility requirements of the AHFP.
If Council does not approve the increased threshold, staff will continue to seek Council approval for each proposed allocation over $100,000. This could slow down the creation and administration of new programs and efforts, especially during the Council summer recess.
FINANCIAL IMPACT
This action is not associated with any funding requests or decisions. Staff hope to begin allocating funding to eligible activities once Council has approved the new threshold.
Council will consider a miscellaneous budget amendment for the Hillmont funding on the consent agenda for the April 15, 2026 Council meeting. This item assumes that Council approves that budget amendment.
COMMUNITY ENGAGEMENT
The development of the Council-approved plans, including the Affordable Housing Plan & Investment Strategy, the Manufactured Homes Action Plan, and the Public Housing Master Plan, included the engagement of stakeholders who provided context about affordable housing programming and challenges and feedback on how the plans could meet the needs of the community.
ATTACHMENTS
Resolution
Draft Staff Presentation
LINK: Local Affordable Housing Funding Allocation Strategy <https://www.chapelhillnc.gov/files/assets/town/v/1/housing/documents/affordable-housing-funding-allocation-strategy-jul-2025.pdf>
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