Council Slow to Fund Housing Urgency - TribPapers

Council Slow to Fund Housing Urgency

Councilwoman Antanette Mosley speaks plainly about the city risking losing $6 million in bond proceeds without action. Screenshot.

Asheville – With two referenda on Buncombe County ballots and early voting in full swing, here’s some food for thought. Voters are being asked if they support the county going $30 million into debt to buy up and conserve farmland and construct greenways, and going $40 million into debt in order to construct affordable housing.

Back in 2016, voters in Asheville passed a $25 million Affordable Housing Bond. In the ensuing six years, the city has managed to spend $18.5 million of the total. Expenditures included the purchase of 32.5 acres for the construction of affordable housing and subsidies for the construction of 403 affordable housing units and the pending construction of another 197.

Sasha Vrtunski, who has served in many leadership positions in the city over the decades, now serves as the city’s Affordable Housing Officer. She led off by talking about “lessons learned,” which is damage-control jargon not typically applied to wild successes. One lesson was, “Investing in capacity building for new nonprofit organizations (the Asheville-Buncombe Community Land Trust and Haywood Street Community Development) takes time to pay off.” A second was, “Policies need to be in place to guide decision-making prior to program creation or implementation.” The third was an observation that the city’s Housing Trust Fund had “seen the most straightforward success and highest leverage of Affordable Housing Bond funding.”

In that light, Vrtunski said staff was recommending allocating $6 million of the unused bond proceeds to the Housing Trust Fund and earmarking the remainder for “planning and predevelopment activities on city-owned land.” But first, the policies for the city’s Housing Trust Fund had to be reworked. Areas in need of revision included establishing guidelines for land acquisition in general and the acquisition and/or redevelopment of lands from which black families were displaced in the name of Urban Renewal; getting the city and county on the same set schedule for awarding grants; and working with the county, Dogwood Trust, and other organizations to create a down payment assistance program. The Council will discuss this further in December.

To date, housing bond funds have been used for land banking, a land trust, the first phase of reimagining Deaverview, and “city-owned land.” Mayor Esther Manheimer requested help understanding what staff was doing under the last category, as it seemed to involve the city as a purchaser in some transactions and a seller in others. She was told that the $8,035,000 line item included the purchase and site development of the former Matthews Ford site as well as the payment of due diligence for the developer; the acquisition of property on Oak Hill Road; contracting for studies of parcels owned by the city; a study of land in the River Arts District; and even construction.

The main question asked by councilmembers, for the public’s sake, not theirs, was why the city had not used the money. They were told the city had first had plans to build affordable housing where the public works facility (a.k.a. the Taj Magraj) now stands along Charlotte Street. Although it was prime real estate, it was, in the Central Business District, locationally-efficient. It also stood on the grounds that until Urban Renewal, it was inhabited by a vibrant African-American community, and the council had promised to pay reparations.

To most members of the public, the idea seemed a waste, both from the irony of trying to build affordable housing on expensive land and the expense of replacing a relatively new and costly facility. Concerns that were raised were dismissed as the prattling of wannabes who did not understand the complexities and intricacies of government. Then, the city invested in a study, informing them of exactly what the prattling wannabes had warned against, and incurring the “incredible expense” of relocating the public works facility was deemed inadvisable.

The city had to program the bond revenues for affordable housing or risk losing them. Assigning the balance as described above would give the Local Government Commission adequate security that the funds would not be spent outside the scope of the referendum. Vrtunski assured the council that staff had been “working with” the city’s bond attorneys to legitimize what was equivalent to a missed deadline.

Currently, Affordable Housing Trust Fund proceeds may be applied to grading and construction of new housing for sale or rent; the conversion of nonresidential structures to residences; purchasing and rehabilitating “substandard” apartments; purchasing and converting market-rate apartments into affordable housing; constructing manufactured and modular homes; constructing “innovative” tiny homes; and providing down payment assistance. Projects must be within the city limits, cannot be used by individuals wishing to improve their own property, must offer at least 20% of units at affordable rates, and cannot take advantage of other city incentives for creating affordable housing.

Not naming any specific projects, Councilwoman Kim Roney was concerned that assigning the balance to the housing trust fund might render some projects ineligible. Councilwoman Antanette Mosley responded that this was not the case, because council would simply vote to amend its procedures, whatever they may be, as it had done for the previous six projects soliciting housing trust funds.

Councilwoman Sage Turner added that no affordable housing projects were in the pipeline for the next couple of months, so there would be time to “massage the policy” before invoking any changes. She said it was important, in light of rising costs of land and construction, for the city, county, and Dogwood Trust to be strategic partners; it is becoming increasingly difficult to assemble capital stacks. Vrtunski added that the city used to consider applicants competitively just once a year.

Before the council unanimously approved the allocations, Turner asked for a moment to explain to the public what was going on with the down payment assistance program. She said that, originally, the city had planned to set aside $1 million. It launched a request for proposals and received two responses, neither of which qualified. That is why staff had listed it among areas of the housing trust fund program in need of review.