AshevilleCity - County Gov.HendersonvilleLeslee KulbaNews Stories

Expensive Affordable Housing Not Rented Cheap Enough


The city has at least two other strategies its members believe will mitigate the affordable housing crisis. One is its Housing Trust Fund, a revolving housing construction loan that marginalizes traditional lending companies by assuming a part of market share. Another distorts the housing market by bypassing conventional real estate agents to offer surplus city-owned land directly to developers wanting to build housing in-line with council’s vision.

At Tuesday’s meeting, council considered leasing its Parks Maintenance facility on prime, well-appointed real estate on Hilliard Avenue to Kassinger Group in exchange for 10-percent of the project’s net cash flow, for the next fifty years. From the trust fund, it offered $1,280,000 at 2 percent interest. Then, by way of the LUIG, it was proposed the developer be allowed to pay taxes only on the unimproved value of the parcel for ten years and receive 100-percent rebates on all development fees. If all went according to the developer’s proposal, the property would eventually increase the city’s tax base.

What Kassinger proposed was 64 housing units at an estimated construction cost of $7.9 million. Thirty-three units would be rent-controlled as affordable, per HUD guidelines, for fifty years. Citizens in the audience were not happy to hear the “affordable” rents would run between $500 and $900 per month. Councilor Keith Young said he couldn’t afford those rates with what he earns working for the state. Councilors Cecil Bothwell and Gordon Smith explained HUD defined those terms, not the city; and the city had to use HUD language to be eligible for HUD grants. The fact remained, though, that the city was providing middle-class welfare instead of a safety net for the sick and afflicted – or at least something within reach of a lot of people who work in the city.

Young asked outgoing Assistant Community and Economic Development Director Jeff Staudinger if council could demand more from the developer. Staudinger and Mayor Esther Manheimer explained council was following its policy, and it wouldn’t be appropriate to change the terms after a deal was struck. Council could, however, reject the proposal. Through a series of questions, Young established the city could rewrite the policy for future applications.

Smith reminded Young that a second party, Tribute, had withdrawn its application to develop affordable housing on the site. They couldn’t get the proverbial numbers to work. Smith extolled the advantages the city could gain should the developer succeed. “It takes a ton of work to bring people to the table for this stuff,” he said, adding that it is always good to aspire to do better, but council should not, “make the perfect the enemy of the good.”

Young countered Smith’s platitudes were going nowhere with those strapped for housing. He said members of council shouldn’t fear that developers won’t want to build in Asheville should they demand more. “Whatever we put on the table needs to be to a greater benefit to the communities we’re trying to serve,” he said.

To that, Manheimer and Bothwell repeated there were only two applications, and one was withdrawn. Raising the bar could mean the city wouldn’t incent any developers to build affordable housing. Manheimer said council could discuss at a later date whether they wish to continue the program or sell land outright and donate the proceeds to groups like Mountain Housing Opportunities. Justifying the pricing, she said the housing authority was already taking care of the 5 percent of Asheville’s population in the lowest income bracket. The average household income in the area is $39,000, and there is a shortage of housing for that bracket, too. Manheimer added the subsidies were going not for modest, second-hand starter apartments, but for new developments; and construction costs are at an all-time high.

Councilor Brian Haynes agreed with Young that council shouldn’t “sell itself short.” He wanted to see more deeply-affordable housing, but said he’d support the project because of all the wonderful things his peers were saying about it. Council approved all three awards 6-1, Young voting in opposition.

Share this story
Show More

Related Articles