“If we were a for-profit entity, we might have just turned and ran in the other direction,” Dowling said.
But while turning the complex around, Dowling said CHT has had to use money out of the complex’s reserves, which are now seriously depleted, hence their request for funds.
CHT is working to estimate the operating costs of the development in the coming years, so it is still unsure of how much money it will require in total from the county and town governments.
Maintenance, both regular and deferred, has been a large cost. Dowling said many former tenants had been violating the complex’s no-smoking policy, which meant costly repairs were necessary before CHT could rent the apartments out again.
According to the agenda for the BOCC meeting, high vacancy rates have also been an issue for the property: six apartments were vacant when they first acquired the property. However, CHT has since hired a property manager, and the financial situation has recently become more positive. One year after the acquisition, the number of vacancies have been halved to three.
CHT's issues with the Landings represent some of the challenges that come with managing affordable properties. Orange County Commissioner Sally Greene said affordable housing aimed at low-income people is almost always unprofitable, and the challenges are only increased when developing affordable rental property instead of permanent homes.
“When you invest in rental property, you or the non-profit developer or somebody, has got to manage the thing in perpetuity because you’re still owning it or you’re still managing it,” she said.
However, she said for-profit development has a role to play in affordable housing for households making above 60 percent or so of the area median income.
“The county would certainly look very favorably on a nonprofit developer who wanted to develop a new housing development and include a percentage of affordable units in it to be sold,” she said.
But overall, she said there is a particular need for rental housing at the low income levels that the Landings serves.
“I would anticipate that the county would, in collaboration I hope with the towns, as well as nonprofit developers, be pursuing more projects that support those income levels," she said.
Carrboro recently agreed to provide CHT with $30,000 out of a total requested $50,000. During a February public forum on Chapel Hill’s annual budget, Dowling requested an additional $5,000 in funding.