Haywood moves to solve affordable housing crisis
During his tenure on the Haywood County Commission, retiring Chairman Mark Swanger has certainly shaped what the future of the county will look like for decades to come.
Whether it’s the transparency and professionalism he’s brought to county government or the more recent bricks-and-mortar works like the new animal shelter, Swanger’s handiwork is far too prolific to list.
But he may have just saved the best for last.
At his final meeting as chairman on Nov. 21, Swanger and the Board of Commissioners unanimously voted to begin addressing what many see as the county’s most pressing issue — affordable housing.
North Carolina General Statutes allow the county to act as a housing authority pursuant to the North Carolina Housing Authorities Law. That law — first passed in 1935 and last amended in 1987 — recognizes that “unsanitary or unsafe dwelling accommodations exist in urban and rural areas throughout the State.”
It goes on to state that “many persons of low income are forced to occupy overcrowded and congested dwelling accommodations” and that those conditions result in “an increase in and spread of disease and crime and constitute a menace to the health, safety, morals and welfare of the citizens of the State and impair economic values.”
Troublingly, the law has asserted since its inception that there is a “serious shortage of decent, safe and sanitary housing in North Carolina that can be afforded by persons and families of moderate income.”
Aside from recognizing problems in the North Carolina housing market, the North Carolina Housing Authorities Law also gives the county the power to “investigate into living, dwelling and housing conditions and into the means and methods of improving such conditions,” which the county’s been actively doing for several months now.
This past spring, the county commissioned a task force to study the problem of affordable housing locally. The Haywood County Affordable Housing Task Force has since met twice, issuing a disturbing baseline study that says, among other things, that salaries aren’t keeping pace with housing prices, half of all renters in Haywood County and a third of homeowners pay too much and minimum wage workers must labor 86 hours a week just to afford average rents.
Other laws give the county the power to induce bond sales.
A conglomerate of companies including North Carolina-based Sari and Associates, Georgia-based Ironwood Capital and N.C.-based Development Resources have requested the county use that power to issue $45 million in multi-family housing revenue bonds to finance the acquisition, renovation and construction of up to 300 affordable housing units.
Included in their plans are the repurposing of the troubled Historic Haywood Hospital — a $70,000 per year millstone around the county’s neck — and new construction on two parcels off Jule Noland Drive near another affordable housing complex for seniors.
The first parcel is a C-shaped 9.08-acre tract that wraps around and in front of Bojangle’s on Dellwood Road as well as behind it, and has frontage on both Russ Avenue and Dellwood Road. It’s currently owned by Harmon Graham Properties of Shelbyville, Tennessee, and was last assessed at $902,000.
The second is a 10.59-acre plot owned by Southland Community Development of Atlanta, which sits further along Jule Noland Drive, just east-southeast of The Great Laurels of Junaluska, an income- and age-restricted affordable housing community; the parcel backs up to single family homes on Rolling Green Drive and was last assessed at $529,500.
The conglomerate’s plan is to create about 50 senior housing units at the former hospital, and also build in some office space on the first floor. The other two parcels will eventually contain a hundred or more units each in a development now known as Brookmont Lofts.
Developer Sari and Associates is helmed by Jim Sari, who headed the Landmark Group, which was unsuccessful in seeking tax credits for the hospital project last year. Only two such adaptive projects were chosen to receive the credits across the state, and only a handful in all of Western North Carolina.
County Tax Administrator David Francis told commissioners at the meeting that Sari and others hoped to try a different approach this time, as the prognosis for acquiring tax credits in 2017 looks less optimistic than it did in 2016.
Such was the genesis of the bond resolution.
“We’ve certainly tried everything else,” Swanger said.
Basically, the way it works is that the county will induce the sale of tax-exempt revenue bonds to investors on the open market; the developers will then use the proceeds from those sales to buy the land and rehabilitate or construct the new housing units.
Once the units are up and operating, the revenues derived from the sale and/or rental of the units would be used to pay back the investors who purchased the bonds in the first place.
It’s not anticipated that the developers will use all $45 million for the project. Francis said that they arrived at the number because if not enough bonds were issued, the county would again have to go through a lengthy process to issue more.
Some initial out-of-pocket costs during the process would be incurred by the county — all of which will be reimbursed by the developers. The relatively small size of the hospital project made the inducement of bonds cost prohibitive until the addition of the two other parcels, totaling about 20 acres.
Francis stressed that the issuance of the bonds is not a tax increase, and not a debt the county will incur; in essence, Francis said, there is “very low risk” to the county.
“These bonds do not constitute a debt or a pledge of money or credit of Haywood County,” he said. “Haywood County is the gatekeeper of the program. By passing this resolution we are saying this project has merit and should be pursued, and we’d like developers to begin the physical and fiscal work that needs to be done to initiate this project.”
Although commissioners did initiate the project with their vote Nov. 21, it’s only the first step. Developers must still qualify for the tax exempt bonds, which isn’t expected until August.
Between now and then, commissioners will still have to hold a public hearing, gain approval from the NC Local Government Commission and then take a final vote on the matter.
However, the commissioners who vote on the issue in 2017 aren’t exactly the ones who approved the preliminary measure Nov. 21. Swanger’s retirement leaves an open seat on the commission, which will be filled by Brandon Rogers. Rogers was the top vote getter during the Nov. 8 election and will be sworn in before the next commission meeting, which takes place Dec. 5.
“I’m in favor of it,” said Rogers. “As I said during the campaign, affordable housing is high on my agenda of things I want to get taken care of, because it’s definitely an issue here in the county.”
Rogers said he felt comfortable with the initiative, as well as with the public’s perception of the deal.
“The risk is, a lot of people think there will be a tax increase, when that’s not the case,” he said. “Matter of fact, it will stay the same. If anything it [taxes] could go down possibly.”