AGENDA ITEM EXECUTIVE SUMMARY
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Authorize the Town Manager to establish a unified local affordable housing program.
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RESPONSIBLE STAFF, TITLE, DEPARTMENT*
Sarah Viñas, Director, Affordable Housing & Community Connections Department
Emily Holt, Affordable Housing Manager, Affordable Housing & Community Connections Department
STAFF RECOMMENDATION*
Staff recommends that Council adopt R-3 to grant the Town Manager the authority to establish and administer a unified local affordable housing funding program, as outlined in the affordable housing funding allocation strategy.
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ACTION/DECISION POINTS*
Council must approve or reject the request to grant the Town Manager the authority to establish and administer a unified local affordable housing program, which staff could update as needed over time.
LEGISLATIVE CONTEXT*
Prior Council actions established eligible uses for three separate affordable housing funding sources.
§ 2002-01-28/R-11 <https://townhall.townofchapelhill.org/archives/agendas/ca020128/10-Revolving%20Acquisition%20Fund.htm>: Established guidelines for the Affordable Housing Fund
§ 2015-03-23/R-5 <https://chapelhill.granicus.com/MetaViewer.php?view_id=21&clip_id=2346&meta_id=121789>: Established guidelines for the Affordable Housing Development Reserve
§ 2018-02-21/R-2 <https://chapelhill.legistar.com/View.ashx?M=F&ID=5823219&GUID=D766B8D4-0561-4242-95ED-2178F6F08F4C>: Established Eligible Activities and priorities for the 2018 Affordable Housing Bonds.
In addition, in September 2023, the Council approved an Affordable Housing Plan and Investment Strategy <https://www.townofchapelhill.org/home/showpublisheddocument/54800>, which recommends realigning the governance and allocation procedures for its local affordable housing funding sources to increase efficiency, transparency, and equity.
BACKGROUND AND CONTEXT*
The Town approved separate allocation strategies for the Affordable Housing Fund in 2002, the Affordable Housing Development Reserve in 2015, and the Affordable Housing Bond in 2018. The Town has been adhering to each separate allocation strategy since each was adopted.
While the Town has had several distinct sources of local affordable housing funding each with their own allocation strategy, the eligible uses for each of these sources is very similar. This has caused confusion among our community partners over the years, as they often are unsure about the distinctions between our local affordable housing funding sources and which source to apply to for their project. In addition to the recommendation in our Affordable Housing Plan to improve our funding processes in order to increase efficiency, transparency, and equity, many of our partners have expressed support for simplification of our local funding sources and process.
TRADEOFFS, ALTERNATIVES, IMPACTS
If Council decides to create a unified local affordable housing funding program, thereby granting the Town Manager the authority to establish and administer the program, staff will establish a streamlined allocation strategy that will adhere to one set of affordable housing priorities and eligibility requirements, and a single allocation process. This action will simplify the Town’s allocation process and reduce administrative burden on our partners, Town staff, and Council.
FINANCIAL IMPACT
This action is not associated with any funding requests or decisions.
The first release of funding from the new unified funding program is anticipated to occur in February 2025. Staff will evaluate funding applications and bring a funding plan to Council for consideration in April 2025. A second release of funding, which will include the initial round of affordable housing bond funding, will follow in May 2025 with Council consideration of a funding plan in September 2025. The proposed Allocation Strategy lays out a standard timeline and process for the release of future rounds of affordable housing funding.
COMPLETE COMMUNITY CONNECTION
N/A
DIVERSITY, EQUITY, INCLUSION
This proposal aligns with the recommendations of our Affordable Housing Plan, which centers racial equity in all the Plan recommendations, including in how it deploys Town affordable housing funding. The Town will continue to consider social and racial equity in its evaluation of funding applications received for the Affordable Housing Fund.
COMMUNITY ENGAGEMENT
The development of the Town’s Affordable Housing Plan & Investment Strategy included the engagement of stakeholders who provided context about affordable housing programming and challenges and feedback on how the Plan could meet the needs of the community. Engagement activities included:
• Thirteen interviews with Town staff, affordable housing developers, local affordable housing providers
• Presentations of initial findings to the Town Council, the Town’s Housing Advisory Board, and the Orange County Affordable Housing Coalition
• Follow-up presentations to the Town’s Housing Advisory Board and Town Council to obtain support for the final Plan.
More recently, Town staff distributed an online survey to past applicants of Town funding to solicit feedback on the Town’s funding process, such as the application itself, the scoring rubric used to evaluate proposals, and the support that Town staff provide to applicants during the application process.
ATTACHMENTS
Resolution
Local Affordable Housing Funding Allocation Strategy
Att A - Affordable Housing Funding Sources Overview FY25
Draft Staff presentation
A RESOLUTION granting THE Town MANAGER the authority to establish and administer a uniFied LOCAL AFFORDABLE HOUSING FUNDING program (2025-01-29/R-3)
WHEREAS, in January 2002 the Town Council established an Affordable Housing Fund to preserve owner-occupied housing in Chapel Hill for affordable housing purposes; and
WHEREAS, in March 2007 the Council first adopted guidelines for the Affordable Housing Fund; and
WHEREAS in April 2013 and in September 2014 the Council modified the guidelines of the Affordable Housing Fund; and
WHEREAS, in March 2015 the Council established guidelines for the use of affordable housing funding in an Affordable Housing Development Reserve; and
WHEREAS, in February 2018 the Council adopted a resolution identifying eligible activities and priorities for the use of affordable housing bond funds; and
WHEREAS, on May 15, 2024 the Council approved a resolution to pursue a bond referendum, which included $15 million for affordable housing on the November 2024 ballot; and
WHEREAS, in November 2024 the bond referendum for a $15 million affordable housing bond passed; and
WHEREAS, in September 2023 the Council adopted an Affordable Housing Plan & Investment Strategy which included a recommendation to consolidate all local affordable housing funding to a single source.
NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council creates a unified local affordable housing program, and thereby grants the Town Manager the authority to establish and administer the program, as outlined in the latest Affordable Housing Funding Allocation Strategy, as first described in the January 29, 2025 meeting materials.
BE IT FURTHER RESOLVED that the Council authorizes the Town Manager or his designee to approve funding allocations of $100,000 or less, and up to $400,000 per year, to allow staff to respond quickly to urgent affordable housing funding needs that align with the Town’s housing needs and Council goals.
This the 29th day of January, 2025.end