Photo Illustration by Maxine Mills and Skillet Gilmore
A mixed-use, mixed-income housing project next to the Durham Station Transportation Center is moving forward—though it’s unclear how exactly the developers will be able to meet all of the city’s goals and still make the development viable. On Thursday, the Durham City Council voted to move ahead with DHIC Inc. and Self-Help Ventures’ proposal, the only one the city received for the project.
In September 2015 the city decided the site should be used for a mix of commercial and housing units, with 80 percent of the apartments set aside for tenants earning less than 60 percent of Durham’s median income, $52,106. It then sought proposals from qualified developers to make that happen.
The next step will be for Self-Help, DHIC, and architect Klein Design Associates to develop some options for how the property will look, from the number of apartments to where parking will be located. There is no concrete timetable at this point, says deputy city manager Keith Chadwell, although the city is aiming to have a design completed in time to apply for low-income housing tax credits, applications for which are due in January 2018. How the project will be financed also depends on the final design, Chadwell says.
“I, for one, think the two things the city can bring to the issue of needing to provide affordable housing are funding and land,” council member Don Moffitt said during Thursday’s meeting. “This is a very valuable piece of land, and I think it should be used to further those goals.”
The proposal from Self-Help and DHIC received just 39.5 out of 100 possible points on a city scoring matrix, but council members did not seem deterred by that. Points were lost mostly because of the developers’ inexperience with commercial spaces and the scope of their previous projects. DHIC operates thirty-nine affordable housing communities, but nothing approaching this size.
City staff sought some expert opinions on why there weren’t more proposals from developers.
“As the [request for qualifications] was forwarded to the top 50 affordable housing developers in the United States … staff anticipated more than one response to the RFQ,” a city memo says. “As a result, [Department of Community Development] staff reached out to members of the affordable development community in an effort to determine why there was only minimal interest.”
Three developers and city staffers, according to the memo, found several obstacles to completing the project, mostly dealing with conflicts between the demands of market-rate housing and the requirements of subsidized housing. For one, the project is “not consistent with typical tax credit applications submitted to the North Carolina Housing Finance Agency.” Retail isn’t normally included in affordable housing projects. Ditto for parking structures. And without amenities, like a pool, market-rate renters may not buy in to the arrangement. Lastly, the wonky shape of the lot and noise and other environmental factors from the adjacent transportation center could make the project costly.
Natalie Britt, vice president of real estate development from DHIC, acknowledged that meeting all of the city’s goals will be a challenge. “We’ve done some pretty complicated projects,” she said. “ … We feel like this is something that’s really important to us because we are locally based and we’d love to do it, but it’s going to be complicated.”
“Members of Durham CAN have been involved with this project since its inception,” the Reverend Herb Davis, cochair of Durham CAN, said in a statement. “We have flexed our people’s muscle multiple times to ensure downtown Durham is diverse and affordable to families. It is only logical we weigh in one more time, and offer our position on the alternatives to be discussed.”
The city already has one example of mixed-income housing as part of the Southside Revitalization Project. That development currently does not have commercial space but is set up to have it in the future, says city manager Thomas Bonfield.
Self-Help Ventures Fund is part of the Self-Help Credit Union, which lends to individuals, businesses and nonprofits and has “developed and invested $144 million in commercial real estate projects to invigorate downtown areas and neighborhoods” and “created affordable housing for 228 families,” according to its website.