The Durham City Council upped the financial risk it will take to help bring affordable housing downtown after a unanimous vote this week.
Monday’s vote essentially allows City Manager Tom Bonfield to negotiate a purchase option with DHIC Inc. and Self Help Ventures Fund Inc. for two city-owned acres next to the Durham bus hub. The city agreed to pay up to $199,500 for pre-development costs if the council does not move the project forward.
Initially the proposal called for exploring a 80-20 split between affordable and market-rate housing among the roughly 120 planned housing units. The initial proposl also had the city reimbursing the developers $125,500 if the city decided not to move forward. Developers, meanwhile, agreed to also consider retail and office space.
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Mayor Bill Bell, however, successfully suggested Monday night that the city increase the amount to give developers more flexibility.
The property would still include at least 80 affordable-housing units, under the agreement, but now developers can explore including more market-rate homes, retail, commercial and office space, Bonfield said.
Developers say the city might need to provide at least $4 million to $6 million to subsidize the project, on top of donating the two acres valued at $2.3 million in 2015.
The approved deal would let the organizations eventually buy the site for $1 and move forward now with development and financing plans, which include applying for federal Low-Income Housing Tax Credits. DHIC and Self Help would follow up in October with more concrete details on costs, parking options and financing and development plans.
The project would help meet the city’s goal of providing affordable housing in the increasingly expensive downtown market.
The council would need to make a commitment to subsidize the project by the end of the year. Then the organizations would apply for the tax credits and, if successful, start construction in fall of 2019.