To kick off the decade, Chapel Hill instilled the Inclusionary Zoning Ordinance on June 21, 2010. The ordinance allows for the Town to set aside a certain percentage of affordable housing units within new residential developments.
“It required that for-sale developments would allocate 15 percent of units for affordable housing. Half for people making less than 80 percent of the AMI (average median income) and half for people making less than 65 percent of the AMI,” said Chapel Hill Town Council member Michael Parker.
Parker said this worked for a while, but after the recession of 2008, the effects on the local housing market influenced policy decisions.
“After the recession, what changed is that for-sale housing in Chapel Hill really slowed to a crawl,” Parker said. “Banks would not and still largely don’t finance condominiums, and we’ve had very few townhouses or single-family home developments approved in the last eight or 10 years.”
Delores Bailey, executive director of affordable housing advocacy group EmPOWERment Inc., said that banks have not funded affordable for-sale housing as much as they have in the past.
“One of the adverse things that did happen was that banks became more skittish about lending to low-income buyers,” Bailey said. “So they were not able to get new homes as it was before the 2008 burst.”
This led to a shift away from for-sale housing, and toward for-rent housing. She said this shift has presented many issues to affordable housing in the Chapel Hill area.
“The interest changed from homeownership to rental,” Bailey said. “Fortunately, apartments had positioned several rental units. In 2008, we probably had about 23 units. We now own 54 affordable rentals throughout Orange County.”
The need for housing
Bailey said the need for affordable housing, however, is one thing that has remained steady throughout the decade.
“EmPOWERment is going to build some affordable rental units,” Bailey said. “So that is going to take everybody working together. That has to be the way it goes.”
She said any help EmPOWERment can get would be helpful for solving the issue, going into the next decade.
“Now the challenge is to find, build and own affordable rentals for people who aren’t making a living wage here in Orange County,” Bailey said. “In 2010, 2012, there was not such a push for rentals, and then that market started to heat up, especially in this area.”
Robert Dowling, executive director of the Community Home Trust, said the effects of the 2008 financial crisis spilled into the next decade.
“The whole housing market has moved toward rental housing, away from homeownership,” Dowling said. “That was because so many people lost their homes with foreclosures that banks stopped financing ownership, particularly multi-family ownership, which are condominiums.”
Dowling went on to say housing prices have come “roaring back,” also contributing to the shift from homeownership to rental.
“It was a terrible start to the decade,” Dowling said. “Today, however, things are very different.”
For Bailey, she said her passion for affordable housing comes from her time living in the Northside neighborhood, one of Chapel Hill’s largest Black communities as well as one of the former largest sources of affordable housing.
“I first-hand had the unfortunate opportunity to watch it gentrify,” Bailey said.
Gentrification is the process of rebuilding homes and businesses in an area to attract middle-class people, displacing earlier residents as a result. UNC professor of city and regional planning, Roberto Quercia, said that gentrification is something affecting the Chapel Hill area, most specifically its low-income individuals and families.
“Housing becomes more expensive, and so low-income families who have been living in certain communities can’t afford to live there,” Quercia said.
Quercia also said gentrification has become more common throughout the decade due to the fact that the land available for development around the Chapel Hill area has decreased and become more expensive.
“The market will go to find an opportunity where it is cheap and those are low-income communities," Quercia said. "So, they will gentrify. It’s likely to continue and accelerate as there is less land available.”
And Bailey said the issue will continue to affect specific populations in Chapel Hill.
“It’s the disadvantaged who lose their homes or their businesses to larger economic powers,” Bailey said.
Parker said the Town is using funding to begin the restoration of some of the affordable housing units Chapel Hill owns.
“We will be looking at projects like 2200 Homestead Road, which is something using Town land to create a mixed-income community that will have substantial numbers of affordable housing,” Parker said.
As for plans going past 2020, the Town currently has a five-year goal in place in regards to affordable housing.
“We set a five-year goal about two years ago, so we’re still working through that,” Parker said. “You can expect a few things from that.”
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